==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
_______________________
Date of Report: April 27, 2004
CEMEX, S.A. de C.V.
(Exact name of Registrant as specified in its charter)
CEMEX Corp.
(Translation of Registrant's name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
Av. Ricardo Margain Zozaya #325, Colonia
del Valle Campestre
Garza Garcia, Nuevo Leon, Mexico 66265
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes ____ No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
N/A
==============================================================================
CONTENTS
1. Press release announcing CEMEX's results for the first quarter of 2004
(attached hereto as exhibit 1).
2. 2004 first quarter earnings release (attached hereto as exhibit 2).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
CEMEX, S.A. de C.V. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CEMEX, S.A. de C.V.
(Registrant)
Date: April 27, 2004 By: /s/ Rafael Garza
Name: Rafael Garza
Title: Chief Comptroller
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1. Press release announcing CEMEX's results for the
first quarter of 2004.
2. 2004 first quarter earnings release.
Exhibit 1
Media Relations Investor Relations Analyst Relations
Jorge Perez Abraham Rodriguez Ricardo Sales
(52 81) 8888-4334 (52 81) 8888-4262 (212) 317-6008
[GRAPHIC OMITTED]
CEMEX
BUILDING THE FUTURE(TM)
CEMEX'S FIRST QUARTER 2004 OPERATING INCOME GROWS 31%;
FREE CASH FLOW INCREASES 198%
MONTERREY, MEXICO, April 22, 2004 - CEMEX, S.A. de C.V. (NYSE: CX) announced
today that its consolidated net sales for the first quarter of 2004 were
US$1.8 billion, up 13% in dollar terms compared to the same period of 2003.
The expansion of the global economy led to increased cement and ready mix
demand in most of our markets. Public spending on infrastructure and housing
continue to be the main drivers of cement demand in our markets. In real peso
terms, net sales grew 9%, to MXP20.1 billion.
Our consolidated cement sales volume during the quarter was 15.7 million
metric tons, up 6% compared to the first quarter of 2003, while ready-mix
volumes were 11% higher at 5.6 million cubic meters.
Free cash flow for the first quarter increased 198% in dollar terms compared
with the same quarter of 2003, reaching US$289 million. EBITDA (operating
income plus depreciation and amortization) grew 24% to US$557 million. Our
consolidated EBITDA margin grew to 30.8% in the first quarter from 28.2%
during the same period of last year. The three percentage-point increase is
due mainly to higher sales volumes, better pricing in most of our markets, and
lower costs of goods sold and SG&A as percentage of sales. In real peso terms,
EBITDA was MXP6.2 billion, up 19% compared to the same quarter of 2003.
Hector Medina, Executive Vice President of Planning and Finance, said "We are
very pleased with our first quarter performance, which strongly indicates our
emergence from the trough of the business cycle in most of our portfolio. We
continue to believe that debt reduction is the best way to create shareholder
value in the absence of investments that meet our strict capital allocation
criteria; we will continue to favor using our free cash flow to de-leverage in
the near term".
First-quarter operating income increased 31% in dollar terms, to US$393
million. In real peso terms, operating income grew 26% to MXP4.4 billion. Our
selling, general and administrative expenses (SG&A) as a percentage of net
sales decreased 1.3 percentage points versus the same period in 2003. The
improved SG&A margin is due to our ongoing cost-reduction initiatives, which
lowered costs significantly at the corporate and operating levels.
Majority net income for the first quarter was US$311 million (US$0.96 per
ADR), up 282% compared to the same period of 2003. The increase was due mainly
to stronger operating performance, and better results in foreign exchange and
marketable securities. In real peso terms, majority net income grew 269% to
MXP3.5 billion.
At the end of the quarter, our net debt was US$5,352 million, representing a
reduction of 13% compared to that at the end of the first quarter of 2003. Our
net debt to EBITDA ratio reached 2.4 times, versus 2.7 times three months ago,
and 3.2 times twelve months ago. Free cash flow in the amount of US$289
million was used to reduce debt during the quarter.
CEMEX's interest coverage (EBITDA divided by interest expense plus preferred
dividends, all for the last twelve months) was 5.7 times, versus 5.0 times a
year ago.
CEMEX's Mexican operations reported net sales of US$697 million in the first
quarter, a 10% growth versus the same period of 2003. EBITDA increased 13%, to
US$316 million. Domestic cement sales volumes increased 7% for the quarter
versus the same period of last year. The self-construction sector began
showing moderate growth during the quarter, while public spending in
infrastructure, and the housing sector remain strong. The industrial and
commercial sectors of the economy remain a stable source of cement and
ready-mix demand.
In the United States, CEMEX's net sales were US$404 million, an increase of
16% compared to the year-earlier period. Quarterly EBITDA was 10% higher
year-over-year, reaching US$74 million. Cement sales volumes increased 17%
during the first quarter of 2004, compared to the year-earlier period. The
public works and residential sector continue to drive cement and ready-mix
demand. In addition, sales volumes benefited from favorable weather conditions
throughout the quarter, especially in the last three weeks of March, and a
relatively weak first quarter 2003. Ready-mix volumes increased 9% for the
quarter.
In Spain, CEMEX's net sales grew 14% in the first quarter of 2004 to US$292
million while EBITDA increased 18%, reaching US$91 million. Domestic cement
volume decreased 2% and ready-mix volume remained flat for the quarter versus
the year-earlier period. Unfavorable weather conditions in March were
responsible in part for the volume decline versus the same period a year ago.
Spending on infrastructure remains at high levels due Spain's infrastructure
program, and the Spanish housing sector also remains strong.
CEMEX Venezuela reported a 48% growth in sales, reaching US$75 million. EBITDA
increased to US$31 million, 46% higher compared to the same period of 2003.
Domestic cement volumes increased 57%, while ready-mix volumes grew 31%.
Economic activity during the quarter was significantly stronger than that in
the same period of 2003 due to the general strike in Venezuela, which began at
the end of 2002. The self-construction sector remains as a stable source of
cement demand. Cement demand from the public works sector was moderate.
CEMEX Colombia's net sales were US$57 million, up 24% versus the year-ago
period. EBITDA, at US$34 million, increased 27%. Cement volume was up 12%
versus the first quarter of 2003, while ready-mix volume grew 33%. Cement
demand was fueled by strong self-construction and residential sectors, as well
as increased spending from the private sector. Spending on infrastructure was
weaker than in previous periods as many projects were concluded at the end of
2003.
Our operations in Central America and the Caribbean reported quarterly net
sales of US$156 million, up 8% vis-a-vis the first quarter of 2003. EBITDA
grew 38%, reaching US$47 million. Cement volume decreased 1% and ready-mix
volume for the quarter grew 12%.
CEMEX Egypt's sales increased 64%, to US$43 million while domestic cement
volumes decreased 12% versus the first quarter of 2003. EBITDA grew 148%
reaching US$19 million. The decrease in cement volumes is due in part to high
cement volumes, driven by a low price environment, during the first quarter of
2003.. The infrastructure sector remained stable during the quarter, while
cement demand from the private sector decreased slightly.
Our Asian operations, which include the Philippines, Thailand, Taiwan and
Bangladesh, posted net sales of US$50 million, 1% lower than those during the
same quarter of 2003. Domestic cement volumes declined 11%. EBITDA for the
first quarter of 2004 was US$14 million, 184% higher compared to the same
period of 2003 due mainly to better dollar pricing and a reduction in SG&A
expenses.
CEMEX is a leading global producer and marketer of cement and ready-mix
products, with operations concentrated in the world's most dynamic cement
markets across four continents. CEMEX combines a deep knowledge of the local
markets with its global network and information technology systems to provide
world-class products and services to its customers, from individual
homebuilders to large industrial contractors. For more information, visit
www.cemex.com.
----------------------------------------------------
EBITDA is defined as operating income plus depreciation and amortization. Free
Cash Flow is defined as EBITDA minus net interest expense, capital
expenditures, change in working capital, taxes paid, dividends on preferred
equity and other cash items. Net debt is defined as total debt plus equity
obligations minus cash and cash equivalents. All of the above items are
presented under generally accepted accounting principles in Mexico. EBITDA and
Free Cash Flow (as defined above) are presented herein because CEMEX believes
that they are widely accepted as financial indicators of CEMEX's ability to
internally fund capital expenditures and service or incur debt. EBITDA and
Free Cash Flow should not be considered as indicators of CEMEX's financial
performance, as alternatives to cash flow, as measures of liquidity or as
being comparable to other similarly titled measures of other companies.
Exhbit 2
2004
[GRAPHIC OMITTED] CEMEX FIRST QUARTER RESULTS
Stock Listing Information
NYSE (ADR)
Ticker: CX
MEXICAN STOCK EXCHANGE
Ticker: CEMEX.CPO
Ratio of CEMEX.CPO to CX= 5:1
Investor Relations
In the United States
1 877 7CX NYSE
In Mexico
52 (81) 8888 4292
E-Mail
ir@cemex.com
www.cemex.com
First quarter First quarter
------- -------- --------- ----------------------
2004 2003 % Var. 2004 2003
- ---------------------------- ------- -------- --------- --- ------------------ -----------------
Net sales 1,809 1,597 13% % of Net
Sales
- ------------------------------------------------------------------------------------------------
Gross profit 776 660 18% 42.9% 41.3%
- ------------------------------------------------------------------------------------------------
Operating income 393 301 31% 21.7% 18.8%
- ------------------------------------------------------------------------------------------------
Majority net income 311 81 282% 17.2% 5.1%
- ------------------------------------------------------------------------------------------------
EBITDA 557 450 24% 30.8% 28.2%
- ------------------------------------------------------------------------------------------------
Free cash flow 289 97 198% 16.0% 6.1%
- ------------------------------------------------------------------------------------------------
- -------------------------------------------------------
Net debt 5,352 6,179 (13%)
- -------------------------------------------------------
Net debt/EBITDA 2.4 3.2
- -------------------------------------------------------
Interest coverage 5.7 5.0
- -------------------------------------------------------
Quarterly earnings per ADR 0.96 0.27 259%
- -------------------------------------------------------
Average ADRs outstanding 324.2 304.2 7%
- -------------------------------------------------------------------------------
In millions of U.S. dollars, except ratios and per-ADR amounts.
Average ADRs outstanding presented in millions of ADRs.
Consolidated net sales increased 13% over first quarter 2003 to US$1,809
million. The expansion of the global economy led to increased cement and
ready-mix demand in most of our markets. Our consolidated cement and ready-mix
volumes increased 6% and 11%, respectively, versus first quarter of 2003, and
cement prices in dollar terms increased in most of our markets. Public
infrastructure spending and housing continue to be the main drivers of cement
demand in our markets.
Cost of goods sold as a percentage of net sales decreased 1.6 percentage
points versus first quarter 2003, due mainly to lower fuels costs, and higher
average sales prices.
Selling, general and administrative expenses (SG&A) as a percentage of net
sales during the quarter decreased 1.3 percentage points versus the same
period in 2003. The improved SG&A margin is due mainly to our ongoing
cost-reduction initiatives which lowered costs significantly at the corporate
and operating levels.
EBITDA reached US$557 million, representing an increase of 24% over first
quarter 2003. Our consolidated EBITDA margin increased three
percentage-points, to 31% from 28% in the same period of 2003. The increase is
due mainly to higher sales volumes, better pricing in most of our markets, and
a lower cost structure.
Foreign exchange gain (loss) for the quarter was a gain of US$12 million,
versus a loss of US$69 million in first quarter 2003. The gain was due mainly
to the appreciation of the Mexican peso against the U.S. dollar.
Marketable securities gain (loss) for the quarter was a loss of US$11 million,
versus a loss of US$105 million in first quarter 2003. As dollar interest
rates dropped during the quarter, the value of some of our derivative
instruments, which we put in place to lock in a fixed interest rate,
decreased. A portion of the valuation result of these instruments is
recognized in our income statement.
Majority net income for the quarter was US$311 million, versus US$81 million
in the first quarter of 2003. The increase was due mainly to our stronger
operating performance, and better results in foreign exchange and marketable
securities.
Net debt at the end of the first quarter was US$5,352 million, representing a
decrease of 13% compared to that at the end of the first quarter of 2003. The
ratio of net debt to EBITDA reached 2.4 times, versus 2.7 times three months
ago, and 3.2 times twelve months ago. Free cash flow in the amount of US$289
million was used to reduce debt during the quarter.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 1
[GRAPHIC OMITTED] //CEMEX
EBITDA and Free Cash Flow
- --------------------------------------------------------------------------------
First quarter January-March
------------------------- ------------------------
2004 2003 % Var. 2004 2003 % Var.
- ------------------------------------------------------------------------------------------------------------------------
Operating income 393 301 31% 393 301 31%
- ------------------------------------------------------------------------------------------------------------------------
+ Depreciation and operating amortization 164 149 164 149
- ------------------------------------------------------------------------------------------------------------------------
EBITDA 557 450 24% 557 450 24%
- ------------------------------------------------------------------------------------------------------------------------
- - Net financial expense 85 85 85 85
- ------------------------------------------------------------------------------------------------------------------------
- - Capital expenditures 70 84 70 84
- ------------------------------------------------------------------------------------------------------------------------
- - Change in working capital 97 136 97 136
- ------------------------------------------------------------------------------------------------------------------------
- - Taxes paid 12 18 12 18
- ------------------------------------------------------------------------------------------------------------------------
- - Preferred dividend payments * N/A 9 N/A 9
- ------------------------------------------------------------------------------------------------------------------------
- - Other cash expenses 4 21 4 21
- ------------------------------------------------------------------------------------------------------------------------
Free cash flow 289 97 198% 289 97 198%
- ------------------------------------------------------------------------------------------------------------------------
In millions of U.S. dollars.
During the quarter, US$289 million of free cash flow was used to reduce debt.
Additionally, cash in the amount of US$46 million resulting from the
difference between interest accrued and interest paid during the quarter, as
well as from other non-operating sources was used to purchase our warrants
through our recent tender offer.
EBITDA and free cash flow (calculated as set forth above) are presented herein
because CEMEX believes that they are widely accepted as financial indicators
of its ability to internally fund capital expenditures and to service or incur
debt. EBITDA and free cash flow should not be considered as indicators of
CEMEX's financial performance, as alternatives to cash flow, as measures of
liquidity or as being comparable to other similarly titled measures of other
companies. EBITDA is reconciled above to operating income, which CEMEX
considers to be the most comparable measure as determined under generally
accepted accounting principles in Mexico (GAAP). Free cash flow is reconciled
to EBITDA. CEMEX is not required to prepare a statement of cash flows under
Mexican accounting principles and, as such does not have such GAAP cash flow
measures to present as comparable to EBITDA or free cash flow.
Debt-Related Information
First quarter Fourth quarter First quarter
-------------------------------------------- --------------------
2004 2003 % Var. 2003 2004 2003
- ------------------------------------------------------------------------- --------------------------------------------
Total debt * 5,667 5,818 (3%) 5,866 Currency denomination
- -------------------------------------------------------------------------
Short-term 22% 30% 23%
- ------------------------------------------------------------------------- --------------------------------------------
Long-term 78% 70% 77% U.S. dollar 68% 70%
- ------------------------------------------------------------------------- --------------------------------------------
Equity obligations * N/A 716 66 Yen 15% 13%
- ------------------------------------------------------------------------- --------------------------------------------
Cash and cash equivalents 316 355 (11%) 291 Euro 17% 13%
- ------------------------------------------------------------------------- --------------------------------------------
Net debt 5,352 6,179 (13%) 5,641 Other 0% 4%
- ------------------------------------------------------------------------- --------------------------------------------
- -------------------------------------------------------------------------
Interest expense 90 92 94 Interest rate
- -------------------------------------------------------------------------
Preferred dividends * N/A 9 (2)
- ------------------------------------------------------------------------- --------------------------------------------
Interest coverage 5.7 5.0 5.3 Fixed 64% 69%
- ------------------------------------------------------------------------- --------------------------------------------
Net debt/EBITDA 2.4 3.2 2.7 Variable 36% 31%
- ------------------------------------------------------------------------- --------------------------------------------
Capitalization ratio 45.4% 48.7% 46.7%
- ------------------------------------------------------------------------- --------------------------------------------
In millions of U.S. dollars, except ratios.
* Prior to 2004, according to the Mexican accounting rules existing at that
time, the outstanding balance of preferred equity and capital securities was
recognized in the minority interest of the stockholders' equity, and its
corresponding preferred dividend in the minority interest of net income.
Effective January 1, 2004, resulting from a new regulation under Mexican GAAP,
the approximately US$66 million balance of preferred capital securities is now
treated as a liability, and not as a minority interest, and its preferred
dividend as financial expense.
Other developments
On March 30, 2004, CEMEX, through its Spanish subsidiary CEMEX Espana, entered
into a EUR 400 million multicurrency credit facility. The facility is divided
into three tranches: The first tranche is a 364-day revolving credit facility;
the second tranche is a five-year, multi-currency term loan; and the third
tranche is a five-year yen-denominated term loan with a fixed interest rate.
The transaction attracted commitments from 27 financial institutions and had
an over-subscription rate in excess of 60%.
In addition, CEMEX Espana, through a wholly-owned subsidiary, closed on April
15, 2004 a five and seven-year JPY 11,068 million private placement with a
group of U.S.-based insurance companies and pension funds.
The proceeds of these two transactions will be used to refinance short-term
debt and for general corporate purposes.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 2
[GRAPHIC OMITTED] //CEMEX
Equity-Related Information
- ------------------------------------------------------------------------------
One CEMEX ADR represents five CEMEX CPOs. The following amounts are expressed
in CPO terms.
Beginning-of-quarter CPO-equivalent units outstanding 1,620,212,509
- ------------------------------------------------------------------------------
Exercise of stock options not hedged 639,542
Change in the number of CPOs held in subsidiaries 592,655
End-of-quarter CPO-equivalent units outstanding 1,621,444,706
- ------------------------------------------------------------------------------
Outstanding units equal total shares issued by CEMEX less shares held in
subsidiaries.
Employee stock-option plans
As of March 31, 2004, directors, officers and other employees under our
employee stock-option plans had outstanding options to acquire 158,749,714
CEMEX CPOs. Of the total options outstanding, 96.8% are hedged through equity
forward agreements and will not dilute existing shares when exercised. The
total amount of these options programs represents 9.8% of our total CPOs
outstanding.
Derivative Instruments
- --------------------------------------------------------------------------------
CEMEX periodically utilizes derivative financial instruments such as
interest-rate and currency swaps, currency and equity forward contracts, and
options in order to execute its corporate financing strategy and to hedge its
stock-option plans and other equity-related obligations.
The following table shows the notional amount for each type of derivative
instrument and the aggregate fair market value for all of CEMEX's derivative
instruments as of the last day of each quarter presented.
First quarter Fourth quarter
------------------- -------------------
Notional amounts 2004 2003 2003
- ---------------------------------------------------------------------------------------------------------------
Equity * 1,109 1,500 1,085
Foreign-exchange 2,654 2,750 2,893
Interest-rate 2,223 3,576 2,224
- ---------------------------------------------------------------------------------------------------------------
Estimated aggregate fair market value (278) (570) (233)
- ---------------------------------------------------------------------------------------------------------------
In millions of U.S. dollars.
The estimated aggregate fair market value represents the approximate
settlement result as of the valuation date, based upon quoted market prices
and estimated settlement costs, which fluctuate over time. Fair market values
and notional amounts do not represent amounts of cash currently exchanged
between the parties; cash amounts will be determined upon termination of the
contracts considering the notional amounts and quoted market prices, as well
as the other derivative items as of the settlement date. Fair market values
should not be viewed in isolation but rather in relation to the fair values of
the underlying hedge transactions and the overall reduction in CEMEX's
exposure to the risks being hedged.
* The aggregate weighted-average exercise price on March 31, 2004 for CEMEX's
outstanding stock options, warrants and the CEMEX Asia Holdings obligation
described in prior quarterly reports was US$25.18 per ADR. On that same date,
the aggregate weighted-average strike price of CEMEX's equity forward
agreements put in place to hedge its obligations under the abovementioned
stock options was US$27.47 per ADR.
Under Mexican GAAP ("Bulletin C-2"), companies are required to recognize all
derivative financial instruments in the balance sheet as assets or
liabilities, at their estimated fair market value, with changes in such fair
values recorded on the income statement. The exceptions to the rule, as they
pertain to CEMEX, are presented when transactions are entered into for cash
flow hedging purposes. In such cases, changes in the fair value of the related
derivative instruments is recognized temporarily in equity and is reclassified
into earnings as the inverse effects of the underlying hedged items flow
through the income statement. CEMEX has recognized increases in assets and
liabilities, which resulted in a net liability of US$538 million, arising from
the fair value recognition of its derivatives portfolio as of March 31, 2004.
The notional amounts of derivatives substantially match the amounts of
underlying assets, liabilities or equity transactions on which the derivatives
are being entered into.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 3
[GRAPHIC OMITTED] //CEMEX
Other Activities
- --------------------------------------------------------------------------------
CEMEX successfully completes warrant tender offer
On January 26, 2004, CEMEX announced the results of its offer to purchase up
to 90,018,042 of its appreciation warrants, including appreciation warrants
represented by American Depositary Warrants (ADWs), each ADW representing five
appreciation warrants. Holders of appreciation warrants and ADWs tendered
96,641,388 appreciation warrants (including 23,575,907 appreciation warrants
represented by ADWs) at prices at or below MXP 8.10 per appreciation warrant
(MXP 40.50 per ADW) in the offer.
In accordance with the terms of the offer, CEMEX purchased 90,018,042
appreciation warrants (including appreciation warrants represented by ADWs),
representing approximately 86.73% of the 103,790,945 appreciation warrants
(including appreciation warrants represented by ADWs) outstanding immediately
prior to the commencement of the offer, at a final purchase price of MXP 8.10
per appreciation warrant (MXP 40.50 per ADW). The final proration factor for
the offer was 93.146058%. All holders of fewer than 100 appreciation warrants
or 20 ADWs who validly tendered at prices at or below the final purchase price
were not subject to proration.
Following the completion of the offer, approximately 11,668,132 appreciation
warrants (including appreciation warrants represented by ADWs) remained held
by persons other than CEMEX and its subsidiaries.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 4
[GRAPHIC OMITTED] //CEMEX
Operating Results - Mexico
- --------------------------------------------------------------------------------
In Mexico, net sales were US$697 million, representing an increase of 10%
versus first quarter 2003.
Domestic gray cement volume increased 7%, and ready-mix volume also increased
7%, versus first quarter 2003. The self-construction sector began showing
moderate growth during the quarter, while public infrastructure spending and
the housing sector, remain strong. The industrial and commercial sector of the
economy remains a stable source of cement and ready-mix demand.
CEMEX's average realized gray cement price in Mexico decreased 1% in constant
peso terms, and increased 1% in dollar terms, versus first quarter 2003. The
average ready-mix price remained flat in constant peso terms and increased 2%
in dollar terms compared to first quarter 2003.
The EBITDA margin increased to 45.3% from 44.2% in the first quarter of 2003.
The increase of 1.1 percentage points was due mainly to better dollar pricing
and volumes of both cement and ready-mix and lower variable (primarily fuels)
and fixed costs.
United States
- --------------------------------------------------------------------------------
Net sales for CEMEX's U.S. operations were US$404 million, representing an
increase of 16% compared to first quarter 2003.
Domestic cement volume increased 17%, and ready-mix volume increased 9%,
compared to first quarter 2003. The public-works and residential sectors
continue to drive cement and ready-mix demand. In addition, sales volumes
benefited from favorable weather conditions throughout the quarter, especially
in the last three weeks of March, and a relatively weak first quarter 2003.
The average realized cement price decreased 1%, while the average ready-mix
price increased 3%, versus first quarter 2003.
The EBITDA margin decreased to 18.4% from 19.3% in the first quarter of 2003.
The decease of 0.9 percentage points was due mainly to higher fuels and import
costs and a change in the product mix.
Spain
- --------------------------------------------------------------------------------
Net sales for CEMEX Spain were US$292 million, representing an increase of 14%
versus first quarter 2003.
Domestic cement volume decreased 2%, while ready-mix volume remained flat,
compared to first quarter 2003. Infrastructure Spending remains at a high
level due to Spain's infrastructure program, and the Spanish housing sector
also remains strong. Unfavorable weather conditions during the quarter were
partially responsible for the volume decline versus the same period in 2003.
The average domestic cement price increased 3% in euro terms and 18% in dollar
terms compared to first quarter 2003. The average ready-mix price increased 4%
in euro terms and 20% in dollar terms versus first quarter 2003.
The EBITDA margin increased to 31.2% from 30.2% in the first quarter of 2003.
The increase of 1.0 percentage point was due mainly to better cement and
ready-mix prices.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 5
[GRAPHIC OMITTED] //CEMEX
Venezuela
- --------------------------------------------------------------------------------
Net sales for CEMEX Venezuela were US$75 million, representing an increase of
48% versus first quarter 2003.
Domestic cement volume increased 57%, while ready-mix volume increased 31%,
compared to first quarter 2003. Economic activity during the quarter was
significantly stronger than that in the same period of 2003 due to the general
strike in Venezuela, which began at the end of 2002. The self-construction
sector remains a stable source of cement demand. Cement demand from the
public-works sector was moderate during the quarter as several infrastructure
projects are currently underway.
Export volume from CEMEX's Venezuelan operations increased 85% compared to
first quarter 2003. Exports to North America, Central America, and the
Caribbean accounted for 73%, 23% and 4%, respectively, of CEMEX Venezuela's
first quarter exports.
Domestic cement prices decreased 14% in constant bolivar terms and decreased
3% in dollar terms compared to first quarter 2003, while the average ready-mix
price decreased 4% in constant bolivar terms, and increased 7% in dollar terms
compared to first quarter 2003.
The EBITDA margin decreased to 41.9% from 42.6% in the first quarter of 2003.
The decrease of 0.7 percentage points was due mainly to lower cement prices.
Colombia
- --------------------------------------------------------------------------------
Net sales for CEMEX Colombia were US$57 million, representing an increase of
24% versus first quarter 2003.
Domestic cement volume increased 12%, while ready-mix volume increased 33%,
compared to first quarter 2003. Cement demand was fueled by strong
self-construction and residential sectors as well as increased spending from
the private sector. Infrastructure spending was weaker than in previous
periods, as many projects were concluded at the end of 2003.
The average realized cement price decreased 7% in Colombian peso terms and
increased 2% in dollar terms versus first quarter 2003, while the average
ready-mix price increased 10% in Colombian peso terms and 20% in dollar terms
versus first quarter 2003.
The EBITDA margin increased to 59.3% from 57.7% in the first quarter of 2003.
The increase of 1.6 percentage points was due mainly to better cement and
ready-mix volumes and dollar prices, which offset higher variable costs.
Other Operations
- --------------------------------------------------------------------------------
Net sales for our Central American and Caribbean operations increased 8%
versus first quarter 2003. The increase was due to higher sales in the
Caribbean region, Puerto Rico, Panama, Nicaragua and the Dominican Republic.
Domestic cement volume decreased 1%, while ready-mix volume increased 12%,
versus first quarter 2003.
In Egypt, net sales and EBITDA increased 64% and 148%, respectively, while
domestic cement volume fell 12% versus first quarter 2003. Domestic cement
prices increased 63% in Egyptian pound terms and 47% in dollar terms versus
first quarter 2003. The decrease in cement volumes is due in part to high
cement volumes, driven by a low price environment, during the first quarter of
2003. The infrastructure sector remained stable during the quarter, while
cement demand from the private sector decreased slightly. The housing sector
has been affected by scarce financing and higher steel prices.
Our Asian operations, which include the Philippines, Thailand, Taiwan and
Bangladesh, experienced a decrease in net sales of 1% versus first quarter
2003. EBITDA was, however, 184% higher compared to first quarter of 2003 due
mainly to better pricing in dollar terms. Domestic cement volume for the
region decreased 11% compared to first quarter 2003. Our weighted-average
domestic cement prices in the region increased 27% in dollar terms versus the
same period in 2003. The EBITDA margin for the region increased to 28.2% from
9.8% in the first quarter of 2003. The increase of 18.4 percentage points was
due mainly to higher cement prices and a reduction in SG&A expenses.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 1 and other important disclosures.
Page 6
Consolidated Income Statement & Balance Sheet
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - March
First quarter
INCOME STATEMENT 2004 2003 % Var. 2004 2003 % Var.
------------------------------ ------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Net Sales 1,808,960 1,596,648 13% 1,808,960 1,596,648 13%
Cost of Sales (1,032,963) (936,498) 10% (1,032,963) (936,498) 10%
- ---------------------------------------------------------------------------------------------------------------------------
Gross Profit 775,997 660,150 18% 775,997 660,150 18%
Selling, General and Administrative Expenses (383,164) (359,642) 7% (383,164) (359,642) 7%
- ---------------------------------------------------------------------------------------------------------------------------
Operating Income 392,833 300,508 31% 392,833 300,508 31%
Financial Expenses (89,907) (91,902) (2%) (89,907) (91,902) (2%)
Financial 4,863 8,168 (40%) 4,863 8,168 (40%)
Income
Exchange Gain (Loss), Net 12,179 (69,422) N/A 12,179 (69,422) N/A
Monetary Position Gain (Loss) 128,391 112,099 15% 128,391 112,099 15%
Gain (Loss) on Marketable Securities (11,244) (104,632) (89%) (11,244) (104,632) (89%)
Total Comprehensive Financing (Cost) Income 44,281 (145,689) N/A 44,281 (145,689) N/A
Other Expenses, Net (75,556) (67,171) 12% (75,556) (67,171) 12%
- ---------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 361,558 87,648 313% 361,558 87,648 313%
Income Tax (43,129) (9,562) 351% (43,129) (9,562) 351%
Employees' Statutory Profit Sharing (2,292) (2,435) (6%) (2,292) (2,435) (6%)
Total Income Tax & Profit Sharing (45,421) (11,997) 279% (45,421) (11,997) 279%
- ---------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 316,137 75,651 318% 316,137 75,651 318%
Participation in Unconsolidated Subsidiaries 2,028 6,035 (66%) 2,028 6,035 (66%)
Consolidated Net Income 318,165 81,686 289% 318,165 81,686 289%
Net Income Attributable to Min. Interest 6,886 267 2484% 6,886 267 2484%
MAJORITY INTEREST NET INCOME 311,279 81,419 282% 311,279 81,419 282%
- ---------------------------------------------------------------------------------------------------------------------------
EBITDA 556,518 450,326 24% 556,518 450,326 24%
Earnings per ADR 0.96 0.27 259% 0.96 0.27 259%
- ---------------------------------------------------------------------------------------------------------------------------
As of March 31
BALANCE SHEET 2004 2003 % Var.
------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 16,457,796 15,891,582 4%
Cash and Temporary Investments 315,511 355,364 (11%)
Trade Accounts Receivables 466,017 431,491 8%
Other Receivables 555,613 432,295 29%
Inventories 633,027 738,100 (14%)
Other Current Assets 95,079 104,251 (9%)
Current Assets 2,065,247 2,061,501 0%
Fixed Assets 9,149,523 8,814,610 4%
Other Assets 5,243,027 5,015,472 5%
- -----------------------------------------------------------------------------------------
Total 9,655,673 9,185,355 5%
Liabilities
Current 3,053,011 3,068,503 (1%)
Liabilities
Long-Term Liabilities 4,443,278 4,048,675 10%
Other 2,159,384 2,068,176 4%
Liabilities
- -----------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 6,802,123 6,706,228 1%
Stockholders' Equity Attributable to Minority 418,639 1,194,990 (65%)
Interest
Stockholders' Equity Attributable to Majority 6,383,484 5,511,238 16%
Interest
- -----------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 7 and other important disclosures.
Page 7
Consolidated Income Statement & Balance Sheet
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of Mexican Pesos in real terms as of March 31, 2004
except per ADR amounts)
January - March First quarter
INCOME STATEMENT 2004 2003 % Var. 2004 2003 % Var.
- --------------------------------------------------------------------------------------------------------------------------------
Net Sales 20,115,635 18,406,371 9% 20,115,635 18,406,371 9%
Cost of Sales (11,486,553) (10,796,071) 6% (11,486,553) (10,796,071) 6%
- --------------------------------------------------------------------------------------------------------------------------------
Gross Profit 8,629,082 7,610,301 13% 8,629,082 7,610,301 13%
Selling, General and Administrative Expenses (4,260,781) (4,146,004) 3% (4,260,781) (4,146,004) 3%
- --------------------------------------------------------------------------------------------------------------------------------
Operating Income 4,368,301 3,464,297 26% 4,368,301 3,464,297 26%
Financial Expenses (999,766) (1,059,459) (6%) (999,766) (1,059,459) (6%)
Financial Income 54,075 94,161 (43%) 54,075 94,161 (43%)
Exchange Gain (Loss), Net 135,429 (800,304) N/A 135,429 (800,304) N/A
Monetary Position Gain (Loss) 1,427,706 1,292,294 10% 1,427,706 1,292,294 10%
Gain (Loss) on Marketable Securities (125,038) (1,206,214) (90%) (125,038) (1,206,214) (90%)
Total Comprehensive Financing (Cost) Income 492,405 (1,679,523) N/A 492,405 (1,679,523) N/A
Other Expenses, Net (840,183) (774,357) 9% (840,183) (774,357) 9%
- --------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 4,020,522 1,010,417 298% 4,020,522 1,010,417 298%
Income Tax (479,595) (110,235) 335% (479,595) (110,235) 335%
Employees' Statutory Profit Sharing (25,487) (28,069) (9%) (25,487) (28,069) (9%)
Total Income Tax & Profit Sharing (505,082) (138,305) 265% (505,082) (138,305) 265%
- --------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 3,515,440 872,113 303% 3,515,440 872,113 303%
Participation in Unconsolidated Subsidiaries 22,556 69,574 (68%) 22,556 69,574 (68%)
Consolidated Net Income 3,537,996 941,686 276% 3,537,996 941,686 276%
Net Income Attributable to Min. Interest 76,573 3,073 2392% 76,573 3,073 2392%
MAJORITY INTEREST NET INCOME 3,461,422 938,614 269% 3,461,422 938,614 269%
- -------------------------------------------------------------------------------------------------------------------------------
EBITDA 6,188,485 5,191,415 19% 6,188,485 5,191,415 19%
Earnings per ADR 10.68 2.89 270% 10.68 2.89 270%
- -------------------------------------------------------------------------------------------------------------------------------
As of March 31
BALANCE SHEET 2004 2003 % Var.
- -------------------------------------------------------------------------------------------------------------------------------
Total Assets 183,010,696 183,200,258 (0%)
Cash and Temporary Investments 3,508,482 4,096,681 (14%)
Trade Accounts Receivables 5,182,108 4,974,282 4%
Other Receivables 6,178,422 4,983,555 24%
Inventories 7,039,258 8,508,916 (17%)
Other Current Assets 1,057,273 1,201,823 (12%)
Current Assets 22,965,544 23,765,257 (3%)
Fixed Assets 101,742,694 101,615,983 0%
Other Assets 58,302,458 57,819,019 1%
- ------------------------------------------------------------------------------------------
Total 107,371,087 105,889,981 1%
Liabilities
Current 33,949,478 35,374,112 (4%)
Liabilities
Long-Term Liabilities 49,409,254 46,673,658 6%
Other 24,012,356 23,842,210 1%
Liabilities
- ------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 75,639,608 77,310,277 (2%)
Stockholders' Equity Attributable to Minority 4,655,263 13,776,003 (66%)
Interest
Stockholders' Equity Attributable to Majority 70,984,345 63,534,275 12%
Interest
- ------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology and other important disclosures.
Page 8
Operating Summary per Country
In thousands of U.S. dollars
January - March First quarter
--------------------------- --------------------------
NET SALES 2004 2003 % Var. 2004 2003 % Var.
- ----------------------------------------------------------------------------------------------------------------------------------
Mexico 696,946 632,841 10% 696,946 632,841 10%
U.S.A. 403,966 349,624 16% 403,966 349,624 16%
Spain 291,915 255,589 14% 291,915 255,589 14%
Venezuela 75,226 50,658 48% 75,226 50,658 48%
Colombia 56,834 45,835 24% 56,834 45,835 24%
Egypt 42,637 25,966 64% 42,637 25,966 64%
Central America & the Caribbean region 155,712 143,631 8% 155,712 143,631 8%
Asia region 49,554 50,262 (1%) 49,554 50,262 (1%)
- ----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 36,170 42,242 (14%) 36,170 42,242 (14%)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1,808,960 1,596,648 13% 1,808,960 1,596,648 13%
- ----------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT
- ----------------------------------------------------------------------------------------------------------------------------------
Mexico 400,249 359,388 11% 400,249 359,388 11%
U.S.A. 123,783 110,043 12% 123,783 110,043 12%
Spain 105,759 97,154 9% 105,759 97,154 9%
Venezuela 31,162 18,958 64% 31,162 18,958 64%
Colombia 34,313 24,196 42% 34,313 24,196 42%
Egypt 20,434 6,524 213% 20,434 6,524 213%
Central America & the Caribbean region 55,852 46,333 21% 55,852 46,333 21%
Asia region 19,586 13,175 49% 19,586 13,175 49%
- ----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (15,141) (15,620) (3%) (15,141) (15,620) (3%)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 775,997 660,150 18% 775,997 660,150 18%
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Mexico 277,499 244,197 14% 277,499 244,197 14%
U.S.A. 35,413 32,021 11% 35,413 32,021 11%
Spain 71,438 61,587 16% 71,438 61,587 16%
Venezuela 20,793 9,673 115% 20,793 9,673 115%
Colombia 26,187 16,078 63% 26,187 16,078 63%
Egypt 11,725 (94) N/A 11,725 (94) N/A
Central America & the Caribbean region 37,734 24,486 54% 37,734 24,486 54%
Asia region 7,088 (3,210) N/A 7,088 (3,210) N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (95,043) (84,230) 13% (95,043) (84,230) 13%
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 392,833 300,508 31% 392,833 300,508 31%
- ----------------------------------------------------------------------------------------------------------------------------------
EBITDA
- ----------------------------------------------------------------------------------------------------------------------------------
Mexico 315,782 279,430 13% 315,782 279,430 13%
U.S.A. 74,332 67,423 10% 74,332 67,423 10%
Spain 91,214 77,153 18% 91,214 77,153 18%
Venezuela 31,491 21,577 46% 31,491 21,577 46%
Colombia 33,711 26,458 27% 33,711 26,458 27%
Egypt 19,192 7,753 148% 19,192 7,753 148%
Central America & the Caribbean region 47,232 34,134 38% 47,232 34,134 38%
Asia region 13,993 4,927 184% 13,993 4,927 184%
- ----------------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (70,427) (68,530) 3% (70,427) (68,530) 3%
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL 556,518 450,326 24% 556,518 450,326 24%
- ----------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology and other important disclosures.
Page 9
OPERATING SUMMARY PER COUNTRY
As a percentage of net sales
January - March First quarter
------------------------- -------------------------
OPERATING INCOME MARGIN 2004 2003 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
Mexico 39.8% 38.6% 39.8% 38.6%
U.S.A. 8.8% 9.2% 8.8% 9.2%
Spain 24.5% 24.1% 24.5% 24.1%
Venezuela 27.6% 19.1% 27.6% 19.1%
Colombia 46.1% 35.1% 46.1% 35.1%
Egypt 27.5% (0.4%) 27.5% (0.4%)
Central America & the Caribbean region 24.2% 17.0% 24.2% 17.0%
Asia region 14.3% (6.4%) 14.3% (6.4%)
- -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 21.7% 18.8% 21.7% 18.8%
- -----------------------------------------------------------------------------------------------------------------------
EBITDA MARGIN
- -----------------------------------------------------------------------------------------------------------------------
Mexico 45.3% 44.2% 45.3% 44.2%
U.S.A. 18.4% 19.3% 18.4% 19.3%
Spain 31.2% 30.2% 31.2% 30.2%
Venezuela 41.9% 42.6% 41.9% 42.6%
Colombia 59.3% 57.7% 59.3% 57.7%
Egypt 45.0% 29.9% 45.0% 29.9%
Central America & the Caribbean region 30.3% 23.8% 30.3% 23.8%
Asia region 28.2% 9.8% 28.2% 9.8%
- -----------------------------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 30.8% 28.2% 30.8% 28.2%
- -----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology and other important disclosures.
Page 10
VOLUME SUMMARY
Consolidated volume summary
Cement: Thousands of metric tons
Ready-mix: Thousands of cubic meters
January - March First quarter
----------------------------- ------------------------
2004 2003 % Var. 2004 200 3 % Var.
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated cement volume 15,686 14,833 6% 15,686 14,833 6%
Consolidated ready-mix volume 5,615 5,077 11% 5,615 5,077 11%
- -------------------------------------------------------------------------------------------------------------------------------
Per-country volume
summary
January - March First quarter First quarter 2004 Vs.
---------------- ---------------------
DOMESTIC CEMENT VOLUME 2004 Vs. 2003 2004 Vs. 2003 Fourth quarter 2003
- ------------------------------------------------------------------------------------------------------------------------------
Mexico 7% 7% 2%
U.S.A. 17% 17% (11%)
Spain (2%) (2%) 0%
Venezuela 57% 57% 3%
Colombia 12% 12% (3%)
Egypt (12%) (12%) 5%
Central America & the Caribbean region (1%) (1%) 9%
Asia Region (11%) (11%) 6%
- --------------------------------------------------------------------------------------------------------------------------------
READY-MIX VOLUME
- --------------------------------------------------------------------------------------------------------------------------------
Mexico 7% 7% (0%)
U.S.A. 9% 9% 2%
Spain (0%) (0%) 3%
Venezuela 31% 31% 3%
Colombia 33% 33% (8%)
Central America & the Caribbean region 12% 12% 15%
Asia Region N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
EXPORT CEMENT VOLUME
- --------------------------------------------------------------------------------------------------------------------------------
Mexico (9%) (9%) 14%
Spain (19%) (19%) (8%)
Venezuela 85% 85% 10%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology and other important disclosures.
Page 11
PRICE SUMMARY
US Dollars
January - March First quarter First quarter 2004 Vs.
------------------ ---------------------
DOMESTIC CEMENT PRICE 2004 Vs. 2003 2004 Vs. 2003 Fourth quarter 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Mexico 1% 1% 2%
U.S.A. (1%) (1%) 1%
Spain 18% 18% 7%
Venezuela (3%) (3%) (10%)
Colombia 2% 2% 1%
Egypt 47% 47% 3%
Central America & the Caribbean region (2) 7% 7% 3%
Asia Region (2) 27% 27% 8%
- -----------------------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
- -----------------------------------------------------------------------------------------------------------------------------------
Mexico 2% 2% 0%
U.S.A. 3% 3% 3%
Spain 20% 20% 6%
Venezuela 7% 7% (8%)
Colombia 20% 20% 10%
Central America & the Caribbean region (2) 2% 2% 3%
Asia Region (2) (5%) (5%) (7%)
- -----------------------------------------------------------------------------------------------------------------------------------
LOCAL CURRENCY
January - March First quarter First quarter 2004 Vs.
------------------ ---------------------
DOMESTIC CEMENT PRICE 2004 Vs. 2003 2004 Vs. 2003 Fourth quarter 2003
- -----------------------------------------------------------------------------------------------------------------------------------
Mexico (1) (1%) (1%) (1%)
U.S.A. (1%) (1%) 1%
Spain 3% 3% 4%
Venezuela (1) (14%) (14%) (5%)
Colombia (7%) (7%) (4%)
Egypt 63% 63% 4%
Central America & the Caribbean region (2) N/A N/A N/A
Asia Region (2) N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
- -----------------------------------------------------------------------------------------------------------------------------------
Mexico (1) (0%) (0%) (3%)
U.S.A. 3% 3% 3%
Spain 4% 4% 3%
Venezuela (1) (4%) (4%) (1%)
Colombia 10% 10% 4%
Central America & the Caribbean region (2) N/A N/A N/A
Asia Region (2) N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------------------------------
1) Local currency price variation for Mexico and Venezuela is presented in constant currency terms as of March 31, 2004.
2) Volume weighted-average price.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. dollar
translation methodology Page 12 and other important disclosures.
Page 12
[GRAPHIC OMITTED] //CEMEX
Definition of Terms and Disclosures
- --------------------------------------------------------------------------------
Methodology for consolidation and presentation of results
CEMEX consolidates its results in Mexican pesos under Mexican generally
accepted accounting principles (GAAP). For the reader's convenience, U.S.
dollar amounts for the consolidated entity are calculated by converting the
constant Mexican peso amounts at the end of each quarter using the period-end
Mexican peso/U.S. dollar exchange rate for each quarter. The exchange rates
used to convert results for first quarter 2004, fourth quarter 2003, and first
quarter 2003 are 11.12, 11.24, and 10.78 Mexican pesos per 1 U.S. dollar,
respectively. CEMEX's weighted-average inflation factor between March 31,
2003, and March 31, 2004, was 6.94%
Per-country figures are presented in U.S. dollars for the reader's
convenience. In the consolidation process, each country's figures (except
those of CEMEX Mexico) are converted to U.S. dollars and then to Mexican pesos
under Mexican GAAP. Each country's figures presented in U.S. dollars at March
31, 2004, and March 31, 2003, can be converted to its original local currency
amount by multiplying the U.S. dollar figure by the corresponding exchange
rate provided below.
To convert March 31, 2003 U.S. dollar figures for Mexico and Venezuela to
constant Mexican pesos and bolivars, respectively, as of March 31, 2004, it is
necessary to first convert the March 31, 2003 U.S. dollar figure to the
corresponding local currency (using the exchange rates provided below), and
then multiply the resulting amount by the inflation-rate factor provided in
the table below.
March 31
----------------------------
Exchange rate 2004 2003 Inflation rate factor
- -----------------------------------------------------------------------------------------
Mexico 11.12 10.78 1.043
Spain 0.81 0.93
Venezuela 1,920 1,600 1.236
Colombia 2,678 2,958
Egypt 6.20 5.76
- -----------------------------------------------------------------------------------------
Amounts provided in units of local currency per 1 U.S. dollar.
[GRAPHIC OMITTED] //CEMEX
The Central America & Caribbean region includes CEMEX's operations in Costa
Rica, the Dominican Republic, Panama, Nicaragua, and Puerto Rico as well as
our trading operations in the Caribbean region. The Asia region includes
CEMEX's operations in the Philippines, Taiwan, Thailand, and Bangladesh.
Definition of terms
EBITDA equals operating income plus depreciation and operating amortization.
Free cash flow equals EBITDA minus net interest expense, capital expenditures,
change in working capital, taxes paid, dividends on preferred equity, and
other cash expenses.
Capital expenditures consist of maintenance spending on our cement and
ready-mix businesses, and expansion of current cement and ready-mix
facilities.
Working capital equals accounts receivables plus historic inventories minus
trade payables.
Equity obligations for the year 2003 equaled the outstanding US$650 of
preferred equity and US$66 million of capital securities. Effective January 1,
2004, the remaining US$66 million of capital securities will be treated as a
liability. Net debt equals total debt plus equity obligations, minus cash and
cash equivalents. Interest coverage is calculated by dividing EBITDA for the
last twelve months by the sum of interest expense and preferred dividend
payments for the last twelve months (all amounts in constant currency terms).
Net debt/EBITDA is calculated by dividing net debt at the end of the quarter
by EBITDA for the last twelve months (EBITDA in constant currency terms).
Capitalization ratio is calculated by dividing total debt by the sum of total
debt and consolidated stockholders' equity.
Earnings per ADR
The number of average ADRs outstanding used for the calculation of earnings
per ADR was 324.2 million for first quarter 2004 and 304.2 million for first
quarter 2003.
- --------------------------------------------------------------------------------
Page 13