cemex_6k.htm
 
 
 
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: December 4, 2009
 
CEMEX, S.A.B. de C.V.
(Exact name of Registrant as specified in its charter)
 
CEMEX Publicly Traded Stock Corporation
(Translation of Registrant's name into English)
 
United Mexican States
(Jurisdiction of incorporation or organization)
 
Av. Ricardo Margáin Zozaya #325, Colonia Valle del Campestre
          Garza García, Nuevo León, México 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, dated October 27, 2009, announcing third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).
     
 
2.
Third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).


 
 

 

 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, CEMEX, S.A.B. de C.V. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

       
       
    CEMEX, S.A.B. de C.V.  
    (Registrant)  
       
       
       
Date:    December 4, 2009
By: 
/s/   Rafael Garza
 
   
Name:
Rafael Garza
 
   
Title:
Chief Comptroller
 
       
       



 
 

 


 
EXHIBIT INDEX
 
EXHIBIT NO.
DESCRIPTION
   
1.
Press release, dated October 27, 2009, announcing third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).
   
2.
Third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).

ex1.htm
 
EXHIBIT NO. 1: Press release, dated October 27, 2009, announcing third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).

Media Relations
Jorge Pérez
(52-81) 8888-4334
Investor Relations
Eduardo Rendón
(52-81) 8888-4256
Analyst Relations
Luis Garza
(52-81) 8888-4136


 
CEMEX REPORTS THIRD QUARTER 2009 RESULTS
 
MONTERREY, MEXICO, October 27, 2009 - CEMEX, S.A.B. de C.V. (NYSE: CX), announced today that consolidated net sales in the three months that ended on September 30, 2009, decreased to US$4.2 billion versus US$5.8 billion in the comparable period in 2008, representing a decrease of 27%, or a decrease of 19% when adjusting for the exclusion of our Venezuelan operations, the sale of our assets in the Canary Islands, and currency fluctuations. On a sequential basis, consolidated net sales for the third quarter of 2009 increased close to 1% compared with the second quarter of 2009. EBITDA decreased 38% in the third quarter of 2009 to US$806 million from US$1.3 billion in the same period of 2008, or 30% when adjusting for the exclusion of above mentioned assets and currency fluctuations. EBITDA, on a sequential basis, declined 1% in the third quarter of 2009 compared to the second quarter of 2009.
 
 
CEMEX's Consolidated Third Quarter Financial and Operational Highlights
 
Lower sales in the quarter were primarily attributable to lower volumes, mainly from our U.S. and Spanish operations, as well as the exclusion of our Venezuelan operations, and the sale of our assets in the Canary Islands.
 
Third quarter sales on a sequential, quarter-to-quarter basis, increased close to 1%, with a 1% decline in EBITDA, when compared with the second quarter of 2009.
 
The infrastructure sector was the main driver of demand in most of the markets we serve despite the fact that we have not yet seen the positive impact of stimulus packages around the world.
 
Free cash flow after maintenance capital expenditures for the quarter was US$260 million.
 
Hector Medina, Executive Vice President of Finance and Legal, said, "Despite the continuing effects of the global economic slowdown, we are encouraged by the quarter to quarter stability exhibited by our results. Leading indicators in several of our markets are showing signs of improvement, and we have made important steps towards regaining our financial flexibility. With the successful completion of our refinancing this quarter, we now have a solid foundation for continued profitable growth. We will further enhance our position in the coming months by continuing to pay down our debt through capital expenditure reductions and cost-reduction and rightsizing initiatives."
 

 
 

 

 
Consolidated Corporate Results
 
Majority net income was a gain of US$121 million in the third quarter of 2009 versus a gain of US$200 million in the third quarter of 2008 due to lower operating income.
 
Net debt at the end of the third quarter was US$17.1 billion, representing a decrease of US$1.2 billion during the quarter.
 
Geographical Markets Third Quarter Highlights
 
Net sales in our operations in Mexico decreased 27% in the third quarter of 2009 to US$761 million, compared with US$1 billion in the third quarter of 2008. EBITDA decreased 28% to US$294 million versus the same period of last year.
 
CEMEX's operations in the United States reported net sales of US$751 million in the third quarter of 2009, down 38% from the same period in 2008. EBITDA decreased 74% to US$45 million, from US$176 million in the third quarter of 2008.
 
In Spain, net sales for the quarter were US$217 million, down 41% from the third quarter of 2008, while EBITDA decreased 42% to US$70 million.
 
Our operations in the United Kingdom experienced a 26% decline in net sales, to US$330 million, when compared with the same quarter of 2008. EBITDA increased 24% to US$22 million in the third quarter.
 
Net sales in the Rest of Europe region decreased 17% during the third quarter of 2009 to US$986 million, versus the comparable period in the previous year. EBITDA was US$157 million for the region in the third quarter of 2009, down 17% from the same period in the previous year.
 
CEMEX's operations in South/Central America and the Caribbean reported net sales of US$360 million during the third quarter of 2009, representing a decline of 29% over the same period of 2008. EBITDA decreased 19% for the quarter to US$131 million versus the same period in 2008.
 
Third-quarter net sales in Africa and the Middle East were US$256 million, down 13% from the same quarter of 2008. EBITDA was US$87 million for the third quarter, flat with the comparable period in 2008.
 
Operations in Asia and Australia reported a 15% decline in net sales, to US$479 million, versus the third quarter of 2008, and EBITDA was US$89 million, down 7% from the same period in the previous year.
 
CEMEX is a global building materials company that provides high-quality products and reliable service to customers and communities in more than 50 countries throughout the world. CEMEX has a rich history of improving the well-being of those it serves through its efforts to pursue innovative industry solutions and efficiency advancements and to promote a sustainable future. For more information, visit www.cemex.com.
 
###
 
This press release contains forward-looking statements and information that are necessarily subject to risks, uncertainties, and assumptions. Many factors could cause the actual results, performance, or achievements of CEMEX to be materially different from those expressed or implied in this release, including, among others, changes in general economic, political, governmental and business conditions globally and in the countries in which CEMEX does
 

 
 

 

 
business, changes in interest rates, changes in inflation rates, changes in exchange rates, the level of construction generally, changes in cement demand and prices, changes in raw material and energy prices, changes in business strategy, and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. CEMEX assumes no obligation to update or correct the information contained in this press release.
 
EBITDA is defined as operating income plus depreciation and amortization. Free Cash Flow is defined as EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation). Net debt is defined as total debt minus the fair value of cross-currency swaps associated with debt minus cash and cash equivalents. The net debt to EBITDA ratio is calculated by dividing net debt at the end of the quarter by EBITDA for the last twelve months. 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.
 
 
ex2.htm

 
EXHIBIT NO. 2: Third quarter 2009 results for CEMEX, S.A.B de C.V. (NYSE:CX).



 
 

 


 
 
2009
THIRD QUARTER RESULTS
           
  Stock Listing Information
   
               Third quarter
like-to-like
             Third quarter
     
2009
2008
% Var.
% Var.*
2009
2008
  NYSE  (ADS)
 
Net sales
4,217
5,787
(27%)
(19%)
% of Net Sales
  Ticker: CX
 
Gross profit
1,320
1,930
(32%)
(22%)
31.3%
33.3%
   
Operating income
411
818
(50%)
(39%)
9.8%
14.1%
  MEXICAN STOCK EXCHANGE
 
Majority net income
121
200
(40%)
 
2.9%
3.5%
  Ticker: CEMEX.CPO
 
EBITDA
806
1,303
(38%)
(30%)
19.1%
22.5%
  Ratio of CEMEX.CPO to CX= 10:1
 
Free cash flow after
maintenance capital expenditures
260
957
(73%)
 
6.2%
16.5%
                 
   
Net debt
17,091
16,393
4%
     
   
Earnings per ADS
0.14
0.26
(44%)
     
   
Average ADRs outstanding
837.1
777.4
8%
     
   
 
In millions of US dollars, except ratios and per-ADS amounts. Average ADSs outstanding are presented in millions.
* Percentage variations adjusted for investments/divestments and currency fluctuations.
 
  Investor Relations
 
In the United States
1 877 7CX NYSE
 
In Mexico
52 (81) 8888 4292
 
E-Mail
ir@cemex.com
 
 
Consolidated net sales in the third quarter of 2009 decreased to US$4,217 million, representing a decrease of 27% compared with those of the third quarter of 2008, or a decrease of 19% adjusting for the exclusion of our Venezuelan operations, the sale of our assets in the Canary Islands, and currency fluctuations. The decline in sales is the result of lower volumes and prices mainly from our U.S. and Spanish operations. On a sequential basis, consolidated net sales increased close to 1%. The infrastructure sector was the main driver of demand in most of our markets despite the fact that we have not yet seen the impact of stimulus packages around the world.
 
Cost of sales as a percentage of net sales increased 2.0 percentage points to 68.7% from 66.7% during the third quarter of 2008. Adjusting for the sale of emission allowances reported in the third quarter 2008, cost of sales as a percentage of net sales remained flat. Selling, general, and administrative (SG&A) expenses as a percentage of net sales increased 2.4 percentage points during the quarter compared with the same period last year, from 19.2% to 21.6%. The increase in expenses is mainly as a result of lower economies of scale due to lower volumes, especially in the United States and Spain, and higher transportation costs, which were partially offset by savings from our cost-reduction initiatives.
 
EBITDA decreased 38% during the quarter compared with the same period last year, to US$806 million. The decrease was due mainly to lower contributions from our U.S. and Spanish operations; the exclusion of our Venezuelan operations starting August 1, 2008; and the sale of our assets in the Canary Islands during the fourth quarter of 2008. Adjusting for divestments and currency fluctuations, EBITDA declined 30%. EBITDA, on a sequential basis, declined 1%.
 
EBITDA margin decreased 3.4 percentage points, from 22.5% in the third quarter of 2008 to 19.1% this quarter. However, EBITDA margin for the quarter increased throughout our portfolio except for the United States and Spain.
 
Exchange gain (loss) net, for the quarter resulted in a gain of US$16 million, resulting mainly from the appreciation of the euro against the US dollar.
Majority net income was a gain of US$121 million in the third quarter of 2009 versus a gain of US$200 million in the third quarter of 2008 due to lower operating income given the reasons already explained above.
 
Net debt at the end of the third quarter was US$17,091 million, representing a decrease of US$1,181 million during the quarter.
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 1

 
 

 
EBITDA and Free Cash Flow(1)

 
Third quarter
 
January – September
 
2009
2008
% Var.
 
2009
2008
% Var.
Operating income
411
818
(50%)
 
1,143
2,166
(47%)
+ Depreciation and operating amortization
395
485
   
1,181
1,445
 
EBITDA
806
1,303
(38%)
 
2,325
3,611
(36%)
- Net financial expense
252
188
   
654
672
 
- Maintenance capital expenditures
59
170
   
149
400
 
- Change in working capital
240
(5)
   
662
231
 
- Taxes paid
32
40
   
152
263
 
- Other cash items (net)
(38)
(47)
   
(111)
(128)
 
Free cash flow after maintenance capital expenditures
260
957
(73%)
 
819
2,173
(62%)
- Expansion capital expenditures
52
386
   
341
1,312
 
Free cash flow
208
571
(64%)
 
478
861
(45%)
 
In millions of US dollars.

During the quarter, free cash flow of US$208 million plus net proceeds from the equity offering of approximately US$1,782 million were used as follows: US$1,341 million to pay down debt; however, net debt was reduced by US$1,181 million as a result of negative conversion effects of US$160 million. The balance was used to pay perpetual notes coupons, fees and expenses related to our debt refinancing, and other uses.


Debt-Related Information

 
Third quarter
Second quarter
   
Third quarter
               
2009
2008
 
2009
2008
% Var.
 2009
   
Currency denomination
   
Total debt
17,579
17,928
(2%)
 19,250
   
US dollar
60%
79%
     Short-term
4%
21%
 
 30%
   
Euro
26%
21%
     Long-term
96%
79%
 
 70%
   
Mexican peso
13%
0%
Cash and cash equivalents
488
1,390
(65%)
 978
   
Yen
0%
0%
Fair value of cross-currency swaps (2)
0
144
 
 0
   
Other
1%
0%
Net debt (2)
17,091
16,393X
4%
 18,272
         
             
Interest rate
   
Interest expense
275
197
(40%)
 210
   
Fixed
15%
24%
             
Variable
85%
76%
 
In millions of US dollars, except ratios.

During the third quarter of 2009, CEMEX issued various short-term notes under its Short-Term Promissory Notes Program ("Certificados Bursátiles de Corto Plazo"), having an outstanding amount of MXN1,200 million at the end of the quarter.

 
_________________________
(1)
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 Mexican Financial Reporting Standards. Free cash flow is reconciled to EBITDA.
 
(2)
For presentation purposes in the table above, net debt includes the fair value of cross-currency swaps (“CCS”) if any, associated with debt.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 2

 
 

 
                                                                                                                                       0;                        
Equity-Related Information

One CEMEX ADS represents ten CEMEX CPOs. The following amounts are expressed in CPO terms.
 
 
 
 
 
Beginning-of-quarter CPO-equivalent units outstanding
8,085,522,644
 
     
   Exercise of stock options
13,249,067
 
   Issuance of shares related to equity offering
900,000,000
 
   Less increase (decrease) in the number of CPOs held in subsidiaries*
(596,425,822)
 
     
End-of-quarter CPO-equivalent units outstanding
9,595,197,533
 
 
Outstanding units equal total shares issued by CEMEX less shares held in subsidiaries.
* Includes 595,000,000 CPOs related to the sale of shares in subsidiaries from our equity offering.

Employee long-term compensation plans
As of September 30, 2009, executives had outstanding options on a total of 95,661,307 CPOs, with a weighted-average strike price of approximately US$1.82 per CPO (equivalent to US$18.18 per ADS). Starting in 2005, CEMEX began offering executives a restricted stock-ownership program. As of September 30, 2009, our executives held 32,543,287 restricted CPOs, representing 0.3% of our total CPOs outstanding.

Derivative Instruments

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.
 
 
   
           Third quarter
   
Second quarter
Notional amounts
 
2009
2008
     
2009
Equity (2)
 
953
962
     
953
Foreign-exchange (1)
 
0
8,774
     
0
Interest-rate (3)
 
0
14,928
     
0
Estimated aggregate fair market value (1) (3) (4)
 
(37)
(22)
     
(61)
 
In millions of US 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 other derivative items as of the settlement date. Fair market values should not be viewed in isolation but rather in relation to the fair market values of the underlying hedge transactions and the overall reduction in CEMEX's exposure to the risks being hedged.

Note: Under Mexican FRS, 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 market values recorded in the income statement, except when transactions are entered into for cash-flow hedging purposes, in which changes in the fair market value of the related derivative instruments are recognized temporarily in equity and then reclassified into earnings as the inverse effects of the underlying hedged items flow through the income statement. As of September 30, 2009, in connection with the fair market value recognition of its derivatives portfolio, CEMEX had recognized increases in assets and liabilities resulting in a net asset of US$51 million, which according to our financial agreements, is presented net of the liabilities associated with the derivative instruments. The notional amounts of derivatives substantially match the amounts of underlying assets, liabilities, or equity transactions on which the derivatives are being entered into.

 
_________________________
(1)
As of September 30, 2008 and June 30,  2009, excludes derivatives for a notional amount of US$3,024 million entered into by financial institutions with certain Special Purpose Entities ("SPEs") created under various series of our perpetual notes. As of July 1, 2009, all of these derivatives have been closed out as we elected to defer the coupons on the perpetual notes by one day. The SPEs received US$94 million which will be used to pay future coupons on the perpetual notes.
 
(2)
Includes a notional amount of US$360 million in connection with a guarantee given by CEMEX under a financial transaction of its employee's pension fund trust. The fair value of such financial guarantee represents an asset of US$37 million net of collateral deposit of US$176 million.
 
(3)
Excludes, starting in the first quarter of 2009, an interest-rate swap related to our long-term energy contracts. As of September 30, 2009, the amount of this derivative was US$205 million and had a positive fair market value of approximately US$38 million.
 
(4)
Net of cash collateral deposited under open positions. Cash collateral was US$175 million as of September 30, 2009.
 
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 3

 
 
 

 
                                                                                                                                                                
Other Activities


CEMEX announced completion of comprehensive refinancing
On August 14, 2009, CEMEX announced that it completed its previously announced refinancing of the majority of the Company's outstanding debt. The refinancing plan extends the maturities of approximately US$15 billion in syndicated and bilateral obligations with approximately 75 banks and private placement note holders, providing for a semi-annual amortization schedule, with a final maturity of February 14, 2014. Final documentation has been signed and all conditions precedent have been satisfied in full.

CEMEX announced resolutions of Extraordinary General Shareholders Meeting
On September 4, 2009, CEMEX stockholders approved a resolution to increase the variable portion of the capital stock by up to 4.8 billion shares (equivalent to 1.6 billion CPOs or 160 million ADSs). This increase in capital could be accomplished through a public offering of common stock or through the issuance of convertible bonds. This issuance was required to be completed within a period of 24 months.

CEMEX announced completion of global equity offering
On September 28, 2009, CEMEX successfully completed the placement of US$1.9 billion in equity through the public offering of 1,495,000,000 Ordinary Participation Certificates (CPOs), equivalent to 149,500,000 ADSs, directly or in the form of American Depositary Shares (ADSs). The ADSs were offered to the public at a price of US$12.50 per ADS, and the CPOs were offered to the public at a price of MXN16.65 per CPO. The estimated net aggregate proceeds from the global offering, including proceeds from the exercise of the over-allotment option, were approximately US$1.782 billion.

CEMEX completed the sale of Australian operations
On October 1, 2009, CEMEX completed the sale of its Australian operations to Holcim Group. The proceeds from this sale are approximately A$2.02 billion (approximately US$1.7 billion) and will be used to reduce debt and to strengthen CEMEX's liquidity position.

 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 4
 
 
 

Operating Results

 
Mexico
CEMEX's domestic cement volumes in Mexico decreased 8% during the third quarter versus the same period last year, while ready-mix volumes decreased 20% over the same period. For the first nine months of the year, cement volumes decreased 2% while ready-mix volumes decreased 9% versus the comparable periods in 2008.

Construction activity during the quarter was driven by a decline in the formal residential and non-residential sectors as a result of the overall macroeconomic situation. Additionally, many of the infrastructure projects that initiated during the second half of 2008 were completed during this quarter. Performance from the self-construction sector was stable.

United States
Cement, ready-mix, and aggregates volumes for CEMEX's operations in the United States decreased 31%, 34%, and 33%, respectively, during the third quarter versus the same period last year. For the first nine months of the year, cement, ready-mix, and aggregates volumes decreased 34%, 40%, and 38%, respectively, versus the comparable period in 2008.

Demand for building materials in the United States continues to decline in connection with the economic slowdown. Activity in the construction sector during the quarter continues to be depressed by a lack of confidence and credit availability. While the downturn in the residential sector has stabilized, the industrial-and-commercial sector continues its downward trend. Although we expect the announced stimulus program to impact the public construction sector through the initiation of new infrastructure-related projects, we have not yet seen the impact in construction spending.


Spain
Cement volumes for our Spanish operations decreased 30% during the third quarter of 2009 compared with the same period last year. Ready-mix volumes decreased 37% during the quarter versus the comparable period a year ago. For the first nine months of the year, cement volumes decreased 43% while ready-mix volumes declined by 47%. On a like-to-like basis, adjusting for the divestments that took place in 2008, cement and ready-mix volumes decreased 21% and 28%, respectively for the quarter, and decreased 35% and 39%, respectively, for the first nine months of the year versus the comparable periods of last year.

Sales continue to be affected by significantly weaker demand in all of our regions, as decreased confidence and lower activity across all sectors resulted in lower volumes for the quarter. Construction activity weakened further as economic conditions continued to worsen. Activity from the infrastructure sector remains relatively stable despite the government's stimulus plan. The residential sector continues to contract. Finally, lack of confidence and tight credit conditions continue to affect construction spending.


United Kingdom
CEMEX's domestic cement, ready-mix, and aggregates volumes in the United Kingdom operations decreased 15%, 21%, and 14%, respectively, during the quarter versus the comparable period last year. For the first nine months of the year cement, ready-mix, and aggregates volumes decreased 21%, 26%, and 21%, respectively, versus the comparable period in 2008.

During the quarter we continued to face a pronounced decline in demand for our products. Volumes continue to be affected by significantly weaker demand in most of our markets as a result of the challenging macroeconomic environment. Activity from the infrastructure sector, fueled by the government's stimulus program, did not compensate for the continued decline in other demand sectors. In addition, adverse weather conditions during the month of August affected volumes during the quarter.


 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 5

 
 
 

 
                                                                                                                                       0;                        
Operating Results

 
Rest of Europe

In CEMEX's operations in France, ready-mix and aggregates volumes decreased 18% and 15%, respectively, during the quarter versus the comparable period of last year. For the first nine months of the year, ready-mix and aggregates volumes decreased 18% and 17%, respectively, versus the same period in 2008. Volumes for the quarter continue to fall as a result of the challenging macroeconomic environment. Performance from the residential and industrial-and-commercial sectors continues to deteriorate, while projects from the infrastructure sector have not compensated for the fall in demand from other sectors.

In Germany, our domestic cement volumes decreased 15% during the third quarter and 18% during the first nine months of the year versus the comparable periods in 2008. Economic activity remains challenging and continues to negatively impact overall cement demand. Activity from the infrastructure sector, fueled by the government's stimulus package, partially compensated for the decline in the non-residential sector. The downward trend in the residential sector appears to have flattened.

For the Rest of Europe region as a whole, cement volumes decreased 6% for the third quarter and decreased 17% for the first nine months of the year versus the comparable periods last year.


South/Central America and the Caribbean
In CEMEX's operations in Colombia, domestic cement volumes decreased 4% during the quarter and 8% during the first nine months of the year versus the comparable periods in 2008. Volumes for the quarter continue to be affected by a sharp decline in demand for our products across all regions. Some signs of recovery are visible in the low-income-housing and infrastructure sectors but have not offset the decline in the industrial-and-commercial and self-construction sectors.

Domestic cement volumes in the region decreased 23% during the quarter and 36% during the first nine months of the year versus the comparable periods of last year.


Africa and the Middle East
In CEMEX's operations in Egypt, domestic cement volumes increased 8% during the quarter and 16% during the first nine months of the year versus the comparable periods in 2008. Demand for the quarter continues to be driven by the residential sector, mainly from the informal sector, and to a lesser extent from infrastructure sector. Middle and high-income housing continued its stable trend.

The region's domestic cement volumes increased 12% during the quarter and increased 28% for the first nine months of the year versus the same periods of last year.


Asia
In the Philippines, CEMEX's domestic cement volumes increased 2% during the quarter and 5% during the first nine months of the year compared with the same periods in 2008. The main drivers of demand during the quarter were the residential sector, which was supported by strong remittances, and public infrastructure projects fueled by the government's stimulus package.

Our cement volumes in the region as a whole decreased 7% during the quarter and 6% during the first nine months of the year versus the comparable periods of last year.
 
 
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 6
 
 
 
 

 
Consolidated Income Statement & Balance Sheet


CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of U.S. Dollars, except per ADS amounts)

 
January - September
 
like-to-like
Third quarter
 
like-to-like
INCOME STATEMENT
2009
2008
% Var.
% Var. *
2009
2008
% Var.
% Var. *
Net Sales
12,036,047
17,479,594
(31%)
(18%)
4,217,079
5,787,399
(27%)
(19%)
Cost of Sales
(8,403,577)
(11,874,556)
(29%)
 
(2,897,058)
(3,857,369)
(25%)
 
Gross Profit
3,632,471
5,605,038
(35%)
(20%)
1,320,022
1,930,030
(32%)
(22%)
Selling, General and Administrative Expenses
(2,489,604)
(3,438,552)
(28%)
 
(909,016)
(1,111,602)
(18%)
 
Operating Income
1,142,866
2,166,486
(47%)
(30%)
411,006
818,428
(50%)
(39%)
Other Expenses, Net
(197,763)
164,368
N/A
 
(61,850)
15,061
N/A
 
Operating Income After Other Expenses, Net
945,103
2,330,854
(59%)
 
349,156
833,489
(58%)
 
Financial Expenses
(688,536)
(700,029)
(2%)
 
(275,081)
(196,860)
40%
 
Financial Income
23,743
28,359
(16%)
 
10,824
8,913
21%
 
Exchange Gain (Loss), Net
(52,539)
(163,897)
(68%)
 
15,994
(211,631)
N/A
 
Monetary Position Gain (Loss)
22,592
39,098
(42%)
 
9,983
7,055
42%
 
Gain (Loss) on Financial Instruments
(174,180)
(288,606)
(40%)
 
(23,024)
(271,499)
(92%)
 
Total Comprehensive Financing (Cost) Income
(868,920)
(1,085,075)
(20%)
 
(261,304)
(664,021)
(61%)
 
Net Income Before Income Taxes
76,184
1,245,779
(94%)
 
87,853
169,468
(48%)
 
Income Tax
221,597
(191,537)
N/A
 
25,564
(15,666)
N/A
 
Net Income Before Participation of Uncons. Subs. and Ext. Items
297,781
1,054,242
(72%)
 
113,416
153,802
(26%)
 
Participation in Unconsolidated Subsidiaries
24,575
69,710
(65%)
 
20,371
30,838
(34%)
 
Consolidated Net Income
322,356
1,123,952
(71%)
 
133,787
184,639
(28%)
 
Net Income Attributable to Min. Interest
20,906
10,577
98%
 
12,837
(15,476)
N/A
 
MAJORITY INTEREST NET INCOME
301,450
1,113,375
(73%)
 
120,951
200,115
(40%)
 
                 
EBITDA
2,324,229
3,609,837
(36%)
(22%)
805,564
1,302,840
(38%)
(30%)
Earnings per ADS
 0.38
1.47
(74%)
 
 0.14
0.26
(44%)
 
                 
                 
 
As of  September 30
           
BALANCE SHEET
2009
2008
% Var.
         
Total Assets
45,536,511
49,519,611
(8%)
         
Cash and Temporary Investments
487,952
1,390,068
(65%)
         
Trade Accounts Receivables
1,631,399
1,907,715
(14%)
         
Other Receivables
868,082
948,465
(8%)
         
Inventories
1,459,134
1,891,546
(23%)
         
Other Current Assets
208,248
191,247
9%
         
Current Assets
4,654,815
6,329,041
(26%)
         
Fixed Assets
20,805,718
22,518,465
(8%)
         
Other Assets
20,075,978
20,672,104
(3%)
         
Total Liabilities
26,276,491
29,301,436
(10%)
         
Current Liabilities
4,160,623
8,212,941
(49%)
         
Long-Term Liabilities
16,915,023
14,159,970
19%
         
Other Liabilities
5,200,845
6,928,526
(25%)
         
Consolidated Stockholders' Equity
19,260,019
20,218,175
(5%)
         
Minority Interest and Perpetual Instruments
3,369,452
4,461,972
(24%)
         
Stockholders' Equity Attributable to Majority Interest
15,890,567
15,756,200
1%
         
 

 

*
Percentage variations adjusted for investments/divestments and currency fluctuations.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 7

 
 
 

 
Consolidated Income Statement & Balance Sheet

 
CEMEX, S.A.B. de C.V. and Subsidiaries
(Thousands of Mexican Pesos in nominal terms)

 
January - September
   
Third quarter
   
INCOME STATEMENT
2009
2008
% Var.
 
2009
2008
% Var.
 
Net Sales
165,736,372
183,671,692
(10%)
 
56,340,181
60,304,699
(7%)
 
Cost of Sales
(115,717,252)
(124,775,196)
(7%)
 
(38,704,692)
(40,193,781)
(4%)
 
Gross Profit
50,019,120
58,896,496
(15%)
 
17,635,488
20,110,917
(12%)
 
Selling, General and Administrative Expenses
(34,281,854)
(36,131,543)
(5%)
 
(12,144,448)
(11,582,898)
5%
 
Operating Income
15,737,267
22,764,954
(31%)
 
5,491,040
8,528,019
(36%)
 
Other Expenses, Net
(2,723,193)
1,727,147
N/A
 
(826,311)
156,936
N/A
 
Operating Income After Other Expenses, Net
13,014,074
24,492,100
(47%)
 
4,664,729
8,684,956
(46%)
 
Financial Expenses
(9,481,137)
(7,355,748)
29%
 
(3,675,084)
(2,051,281)
79%
 
Financial Income
326,937
297,992
10%
 
144,610
92,876
56%
 
Exchange Gain (Loss), Net
(723,463)
(1,722,196)
(58%)
 
213,676
(2,205,196)
N/A
 
Monetary Position Gain (Loss)
311,095
410,833
(24%)
 
133,375
73,516
81%
 
Gain (Loss) on Financial Instruments
(2,398,455)
(3,032,607)
(21%)
 
(307,594)
(2,829,018)
(89%)
 
Total Comprehensive Financing (Cost) Income
(11,965,023)
(11,401,727)
5%
 
(3,491,017)
(6,919,104)
(50%)
 
Net Income Before Income Taxes
1,049,051
13,090,373
(92%)
 
1,173,712
1,765,852
(34%)
 
Income Tax
3,051,392
(2,012,628)
N/A
 
341,529
(163,238)
N/A
 
Net Income Before Participation of Uncons. Subs. and Ext. Items
4,100,443
11,077,745
(63%)
 
1,515,241
1,602,614
(5%)
 
Participation in Unconsolidated Subsidiaries
338,396
732,493
(54%)
 
272,156
321,329
(15%)
 
Consolidated Net Income
4,438,839
11,810,238
(62%)
 
1,787,397
1,923,942
(7%)
 
Net Income Attributable to Min. Interest
287,871
111,136
159%
 
171,498
(161,260)
N/A
 
MAJORITY INTEREST NET INCOME
4,150,968
11,699,102
(65%)
 
1,615,899
2,085,202
(23%)
 
                 
EBITDA
32,004,636
37,931,364
(16%)
 
10,762,340
13,575,591
(21%)
 
Earnings per ADS
-
16.02
(100%)
 
 -
2.81
(100%)
 
                 
                 
 
As of  September 30
           
BALANCE SHEET
2009
2008
% Var.
         
Total Assets
614,742,894
541,249,346
14%
         
Cash and Temporary Investments
6,587,353
15,193,440
(57%)
         
Trade Accounts Receivables
22,023,889
20,851,329
6%
         
Other Receivables
11,719,111
10,366,721
13%
         
Inventories
19,698,306
20,674,597
(5%)
         
Other Current Assets
2,811,343
2,090,335
34%
         
Current Assets
62,840,002
69,176,422
(9%)
         
Fixed Assets
280,877,194
246,126,823
14%
         
Other Assets
271,025,698
225,946,101
20%
         
Total Liabilities
354,732,632
320,264,699
11%
         
Current Liabilities
56,168,414
89,767,442
(37%)
         
Long-Term Liabilities
228,352,811
154,768,471
48%
         
Other Liabilities
70,211,407
75,728,785
(7%)
         
Consolidated Stockholders' Equity
260,010,262
220,984,648
18%
         
Minority Interest and Perpetual Instruments
45,487,603
48,769,356
(7%)
         
Stockholders' Equity Attributable to Majority Interest
214,522,659
172,215,265
25%
         


 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 8

 
 
 

 
Operating Summary per Country


In thousands of U.S. dollars

 
January - September
 
like-to-like
 
Third quarter
 
like-to-like
NET SALES
2009
2008
% Var.
% Var. *
 
2009
2008
% Var.
% Var. *
Mexico
 2,387,708
 3,037,666
(21%)
3%
 
 761,487
 1,047,725
(27%)
(7%)
U.S.A.
 2,223,579
 3,715,358
(40%)
(40%)
 
 751,459
 1,221,456
(38%)
(38%)
Spain
 635,684
 1,347,055
(53%)
(40%)
 
 216,748
 369,940
(41%)
(31%)
United Kingdom
 898,389
 1,422,827
(37%)
(20%)
 
 330,023
 445,580
(26%)
(15%)
Rest of Europe
 2,502,738
 3,478,854
(28%)
(17%)
 
 985,597
 1,191,856
(17%)
(11%)
South / Central America and Caribbean
 1,046,439
 1,650,531
(37%)
(11%)
 
 359,886
 503,887
(29%)
(17%)
Africa and Middle East
 787,817
 794,246
(1%)
5%
 
 255,908
 295,450
(13%)
(10%)
Asia and Australia
 1,287,116
 1,657,008
(22%)
(9%)
 
 479,457
 564,205
(15%)
(13%)
Others and intercompany eliminations
 266,577
 376,050
(29%)
(22%)
 
 76,514
 147,300
(48%)
(44%)
TOTAL
 12,036,047
 17,479,594
(31%)
(18%)
 
 4,217,079
 5,787,399
(27%)
(19%)
                   
GROSS PROFIT
                 
Mexico
 1,193,588
 1,531,521
(22%)
2%
 
 392,685
 531,882
(26%)
(5%)
U.S.A.
 231,386
 791,381
(71%)
(75%)
 
 86,137
 227,727
(62%)
(69%)
Spain
 218,896
 471,462
(54%)
(43%)
 
 82,697
 134,675
(39%)
(31%)
United Kingdom
 216,048
 316,735
(32%)
(14%)
 
 84,754
 96,712
(12%)
0%
Rest of Europe
 626,740
 929,302
(33%)
(21%)
 
 288,344
 357,781
(19%)
(13%)
South / Central America and Caribbean
 452,444
 663,311
(32%)
(4%)
 
 159,802
 193,088
(17%)
(2%)
Africa and Middle East
 291,038
 248,107
17%
23%
 
 92,507
 95,417
(3%)
0%
Asia and Australia
 412,188
 527,645
(22%)
(8%)
 
 152,674
 180,865
(16%)
(13%)
Others and intercompany eliminations
 (9,857)
 125,575
N/A
(54%)
 
 (19,579)
 111,883
N/A
N/A
TOTAL
 3,632,471
 5,605,038
(35%)
(20%)
 
 1,320,022
 1,930,030
(32%)
(22%)
                   
OPERATING INCOME
                 
Mexico
 803,648
 1,030,091
(22%)
2%
 
 258,355
 363,466
(29%)
(9%)
U.S.A.
 (329,894)
 61,114
N/A
N/A
 
 (111,161)
 8,943
N/A
N/A
Spain
 119,087
 330,694
(64%)
(57%)
 
 55,432
 93,291
(41%)
(35%)
United Kingdom
 (35,367)
 (64,199)
45%
(27%)
 
 (6,097)
 (20,178)
70%
(62%)
Rest of Europe
 141,579
 277,456
(49%)
(39%)
 
 110,735
 127,929
(13%)
(5%)
South / Central America and Caribbean
 313,299
 423,115
(26%)
2%
 
 111,530
 127,283
(12%)
3%
Africa and Middle East
 230,806
 191,964
20%
25%
 
 75,519
 75,783
(0%)
3%
Asia and Australia
 195,412
 223,088
(12%)
2%
 
 70,778
 76,758
(8%)
(6%)
Others and intercompany eliminations
 (295,705)
 (306,837)
4%
16%
 
 (154,085)
 (34,848)
(342%)
371%
TOTAL
 1,142,866
 2,166,486
(47%)
(30%)
 
 411,006
 818,428
(50%)
(39%)


 

*
Percentage variations adjusted for investments/divestments and currency fluctuations.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 9

 
 
 

 
Operating Summary per Country


EBITDA in thousands of US dollars. EBITDA margin as a percentage of net sales

 
January - September
 
like-to-like
 
Third quarter
 
like-to-like
 
EBITDA
2009
2008
% Var.
% Var. *
 
2009
2008
% Var.
% Var. *
 
Mexico
 906,887
1,164,026
(22%)
2%
 
 293,576
 408,359
(28%)
(8%)
 
U.S.A.
 147,326
 572,813
(74%)
(74%)
 
 45,147
 175,923
(74%)
(74%)
 
Spain
 160,003
 412,033
(61%)
(54%)
 
 70,065
 120,833
(42%)
(36%)
 
United Kingdom
 43,538
 49,610
(12%)
7%
 
 21,531
 17,431
24%
37%
 
Rest of Europe
 277,414
 456,427
(39%)
(28%)
 
 157,358
 188,879
(17%)
(9%)
 
South / Central America and Caribbean
 383,049
 538,840
(29%)
(2%)
 
 131,242
 161,274
(19%)
(5%)
 
Africa and Middle East
 264,728
 224,545
18%
23%
 
 86,895
 87,013
(0%)
3%
 
Asia and Australia
 245,265
 280,937
(13%)
1%
 
 88,811
 95,154
(7%)
(5%)
 
Others and intercompany eliminations
 (103,980)
 (89,393)
16%
74%
 
 (89,061)
 47,974
N/A
N/A
 
TOTAL
 2,324,229
3,609,837
(36%)
(22%)
 
 805,564
1,302,840
(38%)
(30%)
 
                     
EBITDA MARGIN
                   
Mexico
38.0%
38.3%
     
38.6%
39.0%
     
U.S.A.
6.6%
15.4%
     
6.0%
14.4%
     
Spain
25.2%
30.6%
     
32.3%
32.7%
     
United Kingdom
4.8%
3.5%
     
6.5%
3.9%
     
Rest of Europe
11.1%
13.1%
     
16.0%
15.8%
     
South / Central America and Caribbean
36.6%
32.6%
     
36.5%
32.0%
     
Africa and Middle East
33.6%
28.3%
     
34.0%
29.5%
     
Asia and Australia
19.1%
17.0%
     
18.5%
16.9%
     
CONSOLIDATED MARGIN
19.3%
20.7%
     
19.1%
22.5%
     

 

 

*
Percentage variations adjusted for investments/divestments and currency fluctuations.
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 10

 
 
 

 
Volume Summary

 
Consolidated volume summary
Cement and aggregates: Thousands of metric tons
Ready-mix: Thousands of cubic meters

 
January - September
 
Third quarter
 
 
2009
2008
% Var.
2009
2008
% Var.
Consolidated cement volume
49,639
61,587
(19%)
16,871
20,052
(16%)
Consolidated ready-mix volume
44,996
59,598
(25%)
15,466
19,938
(22%)
Consolidated aggregates volume
145,807
186,823
(22%)
51,744
63,344
(18%)


Per-country volume summary


 
January - September
 
Third quarter
 
Third quarter 2009 Vs.
 
DOMESTIC CEMENT VOLUME
2009 Vs.  2008
 
2009 Vs.  2008
 
Second quarter 2009
 
Mexico
(2%)
 
(8%)
 
(10%)
 
U.S.A.
(34%)
 
(31%)
 
5%
 
Spain
(43%)
 
(30%)
 
0%
 
United Kingdom
(21%)
 
(15%)
 
(1%)
 
Rest of Europe
(17%)
 
(6%)
 
6%
 
South / Central America and Caribbean
(36%)
 
(23%)
 
3%
 
Africa and Middle East
28%
 
12%
 
(6%)
 
Asia and Australia
(6%)
 
(7%)
 
3%
 
             
             
READY-MIX VOLUME
           
Mexico
(9%)
 
(20%)
 
(6%)
 
U.S.A.
(40%)
 
(34%)
 
7%
 
Spain
(47%)
 
(37%)
 
2%
 
United Kingdom
(26%)
 
(21%)
 
2%
 
Rest of Europe
(18%)
 
(12%)
 
1%
 
South / Central America and Caribbean
(37%)
 
(31%)
 
0%
 
Africa and Middle East
(16%)
 
(22%)
 
(8%)
 
Asia and Australia
(20%)
 
(21%)
 
(2%)
 
             
             
AGGREGATES VOLUME
           
Mexico
8%
 
(5%)
 
(8%)
 
U.S.A.
(38%)
 
(33%)
 
1%
 
Spain
(37%)
 
(27%)
 
7%
 
United Kingdom
(21%)
 
(14%)
 
7%
 
Rest of Europe
(13%)
 
(9%)
 
2%
 
South / Central America and Caribbean
(43%)
 
(49%)
 
(18%)
 
Africa and Middle East
(15%)
 
(40%)
 
(28%)
 
Asia and Australia
(21%)
 
(20%)
 
12%
 

 
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 11

 
 
 

 
Price Summary


Variation in US Dollars

 
January - September
 
Third quarter
 
Third quarter 2009 Vs.
 
DOMESTIC CEMENT PRICE
2009 Vs.  2008
 
2009 Vs.  2008
 
Second quarter 2009
 
Mexico
(21%)
 
(20%)
 
(0%)
 
U.S.A.
(6%)
 
(7%)
 
(2%)
 
Spain
(18%)
 
(16%)
 
0%
 
United Kingdom
(13%)
 
(8%)
 
1%
 
Rest of Europe (*)
(14%)
 
(9%)
 
5%
 
South / Central America and Caribbean (*)
9%
 
6%
 
(0%)
 
Africa and Middle East (*)
10%
 
4%
 
2%
 
Asia and Australia (*)
1%
 
0%
 
(2%)
 
             
             
READY-MIX PRICE
           
Mexico
(23%)
 
(21%)
 
(0%)
 
U.S.A.
(6%)
 
(9%)
 
(4%)
 
Spain
(17%)
 
(15%)
 
(1%)
 
United Kingdom
(18%)
 
(14%)
 
(0%)
 
Rest of Europe (*)
(11%)
 
(7%)
 
1%
 
South / Central America and Caribbean (*)
(9%)
 
(7%)
 
2%
 
Africa and Middle East (*)
(5%)
 
(15%)
 
(3%)
 
Asia and Australia (*)
(9%)
 
1%
 
12%
 
             
             
AGGREGATES PRICE
           
Mexico
(21%)
 
(19%)
 
5%
 
U.S.A.
(6%)
 
(7%)
 
0%
 
Spain
(6%)
 
4%
 
2%
 
United Kingdom
(19%)
 
(14%)
 
1%
 
Rest of Europe (*)
(8%)
 
(1%)
 
4%
 
South / Central America and Caribbean (*)
(10%)
 
(14%)
 
(6%)
 
Africa and Middle East (*)
7%
 
(2%)
 
(3%)
 
Asia and Australia (*)
(4%)
 
8%
 
10%
 

 

 

(*)
Volume weighted-average price.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 12

 
 
 

 
Price Summary


Variation in Local Currency

 
January - September
 
Third quarter
 
Third quarter 2009 Vs.
 
DOMESTIC CEMENT PRICE
2009 Vs.  2008
 
2009 Vs.  2008
 
Second quarter 2009
 
Mexico
4%
 
3%
 
(0%)
 
U.S.A.
(6%)
 
(7%)
 
(2%)
 
Spain
(9%)
 
(13%)
 
(4%)
 
United Kingdom
9%
 
6%
 
(2%)
 
Rest of Europe (*)
4%
 
3%
 
(2%)
 
South / Central America and Caribbean (*)
19%
 
8%
 
(3%)
 
Africa and Middle East (*)
13%
 
7%
 
1%
 
Asia and Australia (*)
10%
 
5%
 
(2%)
 
             
             
READY-MIX PRICE
           
Mexico
2%
 
2%
 
(1%)
 
U.S.A.
(6%)
 
(9%)
 
(4%)
 
Spain
(8%)
 
(11%)
 
(5%)
 
United Kingdom
3%
 
(1%)
 
(3%)
 
Rest of Europe (*)
1%
 
(1%)
 
(4%)
 
South / Central America and Caribbean (*)
(2%)
 
(6%)
 
(1%)
 
Africa and Middle East (*)
3%
 
(11%)
 
(7%)
 
Asia and Australia (*)
6%
 
4%
 
3%
 
             
             
AGGREGATES PRICE
           
Mexico
3%
 
5%
 
5%
 
U.S.A.
(6%)
 
(7%)
 
0%
 
Spain
4%
 
8%
 
(2%)
 
United Kingdom
2%
 
(1%)
 
(2%)
 
Rest of Europe (*)
4%
 
4%
 
(1%)
 
South / Central America and Caribbean (*)
2%
 
(13%)
 
(8%)
 
Africa and Middle East (*)
10%
 
1%
 
(4%)
 
Asia and Australia (*)
15%
 
11%
 
1%
 

 


(*)
Volume weighted-average price.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 13

 
 
 

 
Definition of Terms and Disclosures

 
Methodology for translation, consolidation, and presentation of results

Under Mexican Financial Reporting Standards ("Mexican FRS"), beginning January 1, 2008, CEMEX translates the financial statements of those foreign subsidiaries operating in low-inflation environments using exchange rates at the reporting date for the balance sheet and the exchange rates at the end of each month for the income statement, while for foreign subsidiaries operating in high-inflation environments, CEMEX uses the exchange rates at the reporting date for the balance sheet and income statement. CEMEX reports its consolidated results in Mexican pesos.

For the reader's convenience, beginning June 30, 2008, US dollar amounts for the consolidated entity are calculated by converting the nominal Mexican peso amounts at the end of each quarter using the average MXN/US$ exchange rate for each quarter. The exchange rates used to convert results for third quarter 2009 and third quarter 2008 are 13.36 and 10.42 Mexican pesos per US dollar, respectively.

Per-country/region figures are presented in US dollars for the reader's convenience. Figures presented in US dollars for Mexico, Spain, and the United Kingdom as of September 30, 2009, and September 30, 2008, can be converted into their original local currency amount by multiplying the US-dollar figure by the corresponding average exchange rates for 2009 and end-of-period exchange rates for 2008, provided below.

Exchange rate
January - September
Third quarter
 
 
2009
Average
2008
Average
2009
Average
2008
Average
 
Mexican peso
13.77
10.51
13.36
10.42
 
Euro
0.7319
0.6575
0.6979
0.6776
 
British pound
0.6504
0.5153
0.6156
0.5377
 
 
Amounts provided in units of local currency per US dollar.


Breakdown of regions

The South/Central America and Caribbean region includes CEMEX's operations in Argentina, Colombia, Costa Rica, the Dominican Republic, Jamaica, Nicaragua, Panama, Puerto Rico, and Venezuela (through July 31, 2008), as well as trading operations in the Caribbean region.
Rest of Europe includes operations in Austria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Latvia, Norway, Poland, and Sweden.
Africa and Middle East includes operations in Egypt, Israel, and the United Arab Emirates.
The Asia region includes operations in Bangladesh, Malaysia, the Philippines, Taiwan, and Thailand.


Definition of terms
EBITDA equals operating income plus depreciation and operating amortization.
Free cash flow equals EBITDA minus net interest expense, maintenance and expansion capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation and coupon payments on our perpetual notes).
Maintenance capital expenditures consist of maintenance spending on our cement, ready-mix, and other core businesses in existing markets.
Expansion capital expenditures consist of expansion spending on our cement, ready-mix, and other core businesses in existing markets.
Working capital equals operating accounts receivable (including other current assets received as payment in kind) plus historical inventories minus operating payables.
Net debt equals total debt minus cash and cash equivalents, and does not include our obligations in respect of our perpetual notes and loans, which are treated as equity obligations under Mexican financial reporting standards. For third quarter 2008, net debt also excluded the fair value of cross-currency swaps associated with debt.

Earnings per ADS
The number of average ADSs outstanding used for the calculation of earnings per ADS was 837.1 million for third quarter 2009, 800.7 million for year-to-date 2009, 777.4 million for third quarter 2008, and 762.4 million for year-to-date 2008.
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 14

 
 
 

 
Definition of Terms and Disclosures


Effects of the nationalization of CEMEX Venezuela on our financial statements

Our consolidated balance sheets as of September 30, 2009 and 2008, presented elsewhere in this quarterly report, include within "Other long-term assets" our net investment in our Venezuelan assets as of the same dates. Our income statement for the nine-month period ended September 30, 2008, includes CEMEX Venezuela's results of operations for the seven-month period ended July 31, 2008. Our net investment in our Venezuelan assets as of September 30, 2009 and 2008, as well as selected condensed financial information of income statement for CEMEX Venezuela for the seven-month period ended July 31, 2008, is as follows:

Millions of pesos
July 31, 2008
 
Net sales
MXN 4,358
 
Operating income
MXN 775
 
     
 
September 30, 2009
September 30, 2008
Net total assets
MXN 6,290
MXN 6,354


Agreement to sell our Australian assets

In connection with the aforementioned sale of our Australian assets on October 1, 2009, our balance sheet as of September 30, 2009, and our income statements for the nine-month periods ended September 30, 2009 and 2008, presented elsewhere in this quarterly report, include CEMEX Australia's balance sheet and results of operations, respectively, as of and for the same periods. According to MFRS, only after a significant disposal has occurred, the related results of operations should be treated as "discontinued operations" in the income statement. During the fourth quarter of 2009, for purposes of our income statements of the current and prior periods under MFRS, our Australian results of operations for the nine-month periods ended September 30, 2009 and 2008, will be reclassified line-by-line and presented, net of income tax, in a single line item as "Discontinued operations" before net income. Likewise, during the fourth quarter of 2009, as part of the "Discontinued operations" line item, we will recognize the result on the sale of our Australian assets representing a loss, net of income tax, of approximately US$446 million. This loss represents the difference between the selling price of approximately US$1.7 billion and the carrying amount of the net assets as of October 1, 2009, including foreign currency translation effects accrued in equity.

Selected condensed financial information of balance sheet and income statement for CEMEX Australia as of September 30, 2009 and for the nine-month periods ended September 30, 2009 and 2008, is as follows:

Millions pesos
September 30, 2009
September 30, 2008
Net sales
MXN 13,015
MXN 13,928
Operating income
MXN   1,198
MXN   1,291
     
Total assets
MXN 35,632
 
Total liabilities
MXN   6,732
 
Net total assets
MXN 28,900
 

Impairment testing

Goodwill and other intangible assets of indefinite life are tested for impairment once a year during the last quarter, or whenever a significant adverse event occurs. During the nine-month period ended September 30, 2009, based on our analyses of impairment indicators and our determinations of the value in use of our reporting units when applicable, there were no impairment charges.

The announcement of the agreement for the sale our Australian assets for approximately US$1.7 billion constitutes evidence of fair value and represents, considering the related net assets' carrying amount, an indicator of potential impairment. Under MFRS, for assets still in use, an impairment loss would arise if the carrying amount of the net assets exceeds both the estimated sale price and the value in use. The value in use corresponds to the net present value of the estimated cash flows related to such assets. We calculated the value in use of our Australian assets as of September 30, 2009, including variables that reflect the current economic conditions, and compared the value with the corresponding net assets' carrying amount. As mentioned above, as a result of our test, no impairment charge under MFRS was determined for the nine-month period ended September 30, 2009.
 
 
 
Please refer to the end of this report for definitions of terms, US-dollar translation methodology, and other important disclosures.
Page 15