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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 10, 2002
CEMEX, S.A. de C.V.
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(Exact name of Registrant as specified in its charter)
CEMEX Corp.
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(Translation of Registrant's name into English)
United Mexican States
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(Jurisdiction of incorporation or organization)
Ave. Constitucion 444 Pte. Monterrey, Nuevo Leon, Mexico 64000
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(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
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This report on Form 6-K shall be deemed to be incorporated by
reference into (i) Post-Effective Amendment No. 3 to CEMEX, S.A. de C.V.'s
("CEMEX") Registration Statement on Form F-3 (Registration No. 333-11382)
filed with the Securities and Exchange Commission (the "Commission") on
October 23, 2002, (ii) CEMEX's Registration Statement on Form F-3
(Registration No. 333-86700) filed with the Commission on April 19, 2002,
(iii) CEMEX's Registration Statement on Form S-8 (Registration No. 333-86090)
filed with the Commission on April 11, 2002, (iv) CEMEX's Registration
Statement on Form S-8 (Registration No. 333-83962) filed with the Commission
on March 7, 2002 and (v) CEMEX's Registration Statement on Form S-8
(Registration No. 333-13970) filed with the Commission on September 20, 2001
(collectively, the "Registration Statements"), and to be a part thereof from
the date on which this report is furnished, to the extent not superseded by
documents or reports subsequently filed or furnished.
Contents
1. Report on CEMEX's results of operations for the third quarter
of 2002 (attached hereto as exhibit 1).
Please note that this report on Form 6-K should be read in
conjunction with (i) CEMEX's annual report on Form 20-F for the year ended
December 31, 2001, which was filed with the Commission on April 8, 2002 and
(ii) CEMEX's Report on Form 6-K furnished to the Commission on October 10,
2002, which contains a report on CEMEX's results of operations for the six
months ended June 30, 2002.
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: December 9, 2002 By: /s/ Rafael Garza
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Name: Rafael Garza
Title: Chief Comptroller
EXHIBIT 1
CEMEX, S.A. de C.V.
2002 Third Quarter Results
References herein to "CEMEX," "we," "us" or "our" refer to CEMEX,
S.A. de C.V., a Mexican corporation, and its consolidated subsidiaries.
References herein to "U.S.$" and "Dollars" are to U.S. Dollars, and, unless
otherwise indicated, references to "Ps" and "Pesos" are to constant Mexican
Pesos as of September 30, 2002. The information set forth below contains
convenience translations of Peso amounts into Dollars at an exchange rate of
Ps10.22 to U.S.$1.00, the CEMEX accounting rate as of September 30, 2002. The
noon buying rate for Pesos on September 30, 2002 was Ps10.212 to U.S.$1.00.
On October 28, 2002, CEMEX announced its results for the third
quarter of 2002. The following table contains a summary of CEMEX's preliminary
unaudited consolidated financial results as of and for the three- and
nine-month periods ended September 30, 2001 and 2002. The interim results of
operations for the three- and nine-month periods ended September 30, 2002 are
not necessarily indicative of operating results to be expected for the entire
fiscal year. Following the table is a discussion of CEMEX's results for the
third quarter of 2002.
Unaudited
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As of and for the Nine Months As of and for the Three Months
Ended September 30, Ended September 30,
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2001 2002 2002 2001 2002 2002
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(in millions of constant Pesos as of September 30, 2002 and Dollars,
except share and per share amounts)
Income Statement Information:
Net sales ............................. Ps 51,883 Ps 50,469 U.S.$4,938 Ps 17,609 Ps 17,587 U.S$1,721
Cost of sales(1) ...................... (28,086) (27,788) (2,719) (9,541) (9,805) (959)
Gross profit .......................... 23,797 22,680 2,219 8,068 7,782 761
Operating expenses .................... (11,125) (11,874) (1,162) (3,963) (4,164) (407)
Operating income ...................... 12,672 10,807 1,057 4,104 3,618 354
Comprehensive financing income
(cost), net(2) ..................... 229 (3,565) (349) (1,857) (2,539) (248)
Other income (expense), net ........... (2,390) (2,872) (281) (843) (755) (74)
Income before income tax, business
assets tax, employees' statutory
profit sharing and equity in
income of affiliates ............... 10,510 4,370 428 1,405 324 32
Minority interest ..................... 1,288 351 34 153 176 17
Majority interest net income .......... 7,965 3,636 356 1,070 169 17
Earnings per share(3)(4) .............. 2.48 1.64 0.16 0.24 0.04 0.00
Number of shares outstanding(3) ....... 4,376 4,559 4,559 4,376 4,559 4,559
Balance Sheet Information:
Cash and temporary investments ........ 5,778 3,437 336 5,778 3,437 336
Net working capital investment(5) ..... 9,218 9,788 958 9,218 9,788 958
Property, machinery and equipment, net. 91,444 90,116 8,818 91,444 90,116 8,818
Total assets .......................... 161,743 166,485 16,290 161,743 166,485 16,290
Short-term debt ....................... 21,186 19,412 1,899 21,186 19,412 1,899
Long-term debt ........................ 35,747 41,207 4,032 35,747 41,207 4,032
Minority interest(6) .................. 19,718 12,373 1,211 19,718 12,373 1,211
Stockholders' equity (excluding
minority interest)(7) .............. 57,082 60,599 5,929 57,082 60,599 5,929
Book value per share(3) ............... 13.05 13.29 1.30 13.05 13.29 1.30
Other Financial Information:
Operating margin ...................... 24.4% 21.4% 21.4% 23.3% 20.6% 20.6%
EBITDA(8) ............................. 17,164 15,375 1,504 5,626 5,162 505
Ratio of EBITDA to interest expense,
capital securities dividends and
preferred equity dividends(9) ...... 4.16 5.49 5.49 4.89 5.30 5.30
Investment in property, machinery and
equipment, net ..................... 3,571 2,878 282 1,146 1,322 129
Depreciation and amortization ......... 4,492 4,568 447 720 871 85
Net resources provided by operating
activities(10) ..................... 16,175 12,344 1,208 5,097 5,162 505
(footnotes on next page)
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(1) Cost of sales includes depreciation.
(2) Comprehensive financing income (cost), net, includes financial expenses,
financial income, gain (loss) on marketable securities, foreign exchange
result, net and monetary position result.
(3) Based upon the total number of shares outstanding at the end of each
period, expressed in millions of shares, and includes shares subject to
financial derivative transactions, but does not include shares held by
our subsidiaries.
(4) Earnings per share are calculated based upon the weighted average number
of shares outstanding during the preceding 12-month period. In
accordance with Mexican GAAP, earnings per share as of September 30,
2001 and 2002 (unaudited) was calculated based on net income for the
prior 12-month periods, which amounted to Ps10.5 billion and Ps7.3
billion, respectively.
(5) Net working capital investment equals trade receivables plus inventories
less trade payables.
(6) Minority interest at September 30, 2001 and 2002 includes liquidation
amounts of U.S.$900 million (Ps9.2 billion) and U.S.$650 million (Ps6.6
billion), respectively, of issued preferred equity. In addition,
minority interest net income in the first nine months of 2002 and 2001
includes preferred dividends in the amount of approximately U.S.$6.9
million (Ps69.4 million) and U.S.$85.5 million (Ps865.2 million),
respectively. Of the U.S.$650 million of preferred equity outstanding as
of September 30, 2002, U.S.$195 million is due in February 2004 and
U.S.$455 million is due in August 2004.
(7) In December 1999, we entered into forward contracts with a number of
banks, initially covering 21,000,000 ADSs, which has increased to
24,008,313 as a result of stock dividends received in respect of such
ADSs. These ADSs are considered to have been sold to the banks, and,
therefore, future changes in the fair value of the ADSs will not be
recorded until settlement. Final settlement of the forward contracts is
currently scheduled for December 2002. When we settle the forward
contracts, the purchase price of the forward contracts relating to our
ADSs will be recorded as a decrease in stockholders' equity.
(8) EBITDA equals operating income before amortization expense and
depreciation. Amortization of goodwill is not included in operating
income, but instead is recorded in other income (expense). We present
EBITDA because it is used by some investors to measure a company's
ability to service debt and is included herein as a convenience only and
may not be comparable to similarly titled measures reported by other
companies. EBITDA is not a measure of financial performance under
generally accepted accounting principles and should not be considered an
alternative to net income as a measure of operating performance or to
cash flows from operations as a measure of liquidity.
(9) Capital securities dividends consist of accrued dividends on U.S.$250
million aggregate liquidation amount of 9.66% Putable Capital Securities
issued by one of our subsidiaries in May 1998. In April 2002, we
successfully completed a tender offer for the capital securities, with
approximately U.S.$183.75 million in aggregate liquidation amount having
been tendered and accepted in the offer.
(10) Net resources provided by operating activities equals majority interest
net income plus items not affecting cash flow plus investment in working
capital excluding effects from acquisitions. In accordance with Mexican
GAAP, operating activities include gain and loss from trading in
marketable securities, including realized gain or loss from trading in
our capital stock.
Three Months Ended September 30, 2002 Compared to Three Months Ended
September 30, 2001
Net Sales
Our sales decreased slightly from Ps17,609 million in the third
quarter of 2001 to Ps17,587 million in the third quarter of 2002. The slight
decrease was primarily attributable to a decrease in cement sales prices in
Mexico, lower demand in the United States due to unfavorable weather
conditions, lower demand in Venezuela due to uncertain political conditions
and lower average cement prices in several of our markets as a result of
unfavorable economic conditions, which were partially offset by increased
sales in Spain, the Caribbean, Colombia and Asia. Our worldwide cement sales
volumes also decreased slightly, from 15.99 million tons in the third quarter
of 2001 to 15.97 million tons in the third quarter of 2002. Our worldwide
ready-mix concrete sales volumes increased 10%, from 4.61 million cubic meters
in the third quarter of 2001 to 5.05 million cubic meters in the third quarter
of 2002.
Our Mexican operations' domestic gray cement sales volumes increased
6% in the third quarter of 2002 compared to the third quarter of 2001. Our
Mexican operations' ready-mix concrete sales volumes increased 10% in the
third quarter of 2002 compared to the third quarter of 2001. The increase in
sales volumes resulted primarily from increased demand in the public sector,
which was partially offset by unfavorable weather conditions in the southeast
and central regions during September, leading to a decrease in shipment
volumes and delays in construction activity. Our Mexican operations' cement
export volumes, which represented 7% of our Mexican cement sales volumes in
the third quarter of 2002, decreased 25% in the third quarter of 2002 compared
to the third quarter of 2001, primarily attributable to the weakness in the
U.S. market. Of our Mexican operations' cement export volumes during the third
quarter of 2002, 54% was shipped to North America, 29% to the Caribbean and
17% to Central America and South America. The average cement price in Mexico
decreased 6.5% in constant Peso terms in the third quarter of 2002 compared to
the third quarter of 2001, and the average ready-mix concrete price decreased
8% in constant Peso terms over the same periods, as a result of inflation
increases and the inability to raise prices due to unfavorable economic
conditions in Mexico.
Our United States operations' cement sales volumes, which include
cement purchased from our other operations, decreased 6% in the third quarter
of 2002 compared to the third quarter of 2001. Ready-mix concrete sales
volumes decreased 2% during the same period. Residential construction growth
in the United States remained stable while industrial and commercial
construction declined as a result of continued weakness in the manufacturing
and commercial sectors. The cement-intensive public works sector, in
particular highway construction, is still the strongest source of cement
demand. Cement demand decreased during the third quarter of 2002 primarily as
a result of unfavorable weather conditions during September. Our United States
operations' average sales price of cement decreased 1% in Dollar terms in the
third quarter of 2002 compared to the third quarter of 2001, and the average
price of ready-mix concrete remained flat in Dollar terms over the same
periods.
Our Spanish operations' domestic cement sales volumes increased 4% in
the third quarter of 2002 compared to the third quarter of 2001, and ready-mix
concrete sales volumes increased 8% over the same periods. The increase in
sales volumes resulted primarily from an increase in public works spending and
residential construction. Our Spanish operations' cement export volumes
represented 4% of our Spanish cement sales volumes in the third quarter of
2002. Of our Spanish operations' total cement export volumes during the third
quarter of 2002, 36% was shipped to North America, 36% to Africa, 15% to
Europe and Asia and 13% to the Caribbean. Our Spanish operations' average
domestic sales price of cement increased 1% in Euro terms in the third quarter
of 2002 compared to the third quarter of 2001, and the average sales price of
ready-mix concrete decreased 1% in Euro terms.
Our Venezuelan operations' domestic cement sales volumes decreased
16% in the third quarter of 2002 compared to the third quarter of 2001, and
ready-mix concrete sales volumes decreased 24% in the third quarter of 2002
compared to the third quarter of 2001. The decreases in sales volumes were
primarily attributable to the uncertain political climate in Venezuela, which
led to a decline in public infrastructure spending and weaker demand from the
self-construction sector due to lower real disposable income as a result of
wages lagging behind inflation. Our Venezuelan operations' cement export
volumes, which represented 45% of our Venezuelan cement sales volumes in the
third quarter of 2002, decreased 7% in the third quarter of 2002 compared to
the third quarter of 2001, primarily due to the weakness of the economy in the
United States, which is the principal destination of such exports. Of our
Venezuelan operations' total cement export volumes during the third quarter of
2002, 65% was shipped to North America and 35% to the Caribbean. Our
Venezuelan operations' average domestic sales price of cement increased 23% in
constant Bolivar terms in the third quarter of 2002 compared to the third
quarter of 2001, and the average sales price of ready-mix concrete increased
8% in constant Bolivar terms over the same periods, primarily due to our
raising prices in constant Bolivar terms in an effort to re-align these prices
with their Dollar equivalents as a result of the significant depreciation of
the Bolivar during 2002.
Our Colombian operations' domestic cement sales volumes increased 4%
in the third quarter of 2002 compared to the third quarter of 2001, and
ready-mix concrete sales volumes increased 7% in the third quarter of 2002
compared to the third quarter of 2001. The increase in sales volumes were
primarily attributable to increased demand from the residential and
self-construction sectors, which was partilly offset by a reduction in demand
from the public works sector, as several major projects ended during the first
half of 2002. Our Colombian operations' average sales price of cement
increased 8% in Colombian Peso terms in the third quarter of 2002 compared to
the third quarter of 2001, and the average sales price of ready-mix concrete
increased 2% in Colombian Peso terms over the same periods, primarily due to
inflation adjustments and increased demand from the residential and
self-construction sectors.
Our Central American and Caribbean operations consist of our
operations in the Dominican Republic, Nicaragua, Panama and Costa Rica, Puerto
Rico, as well as our trading operations in the Caribbean region. Most of these
trading operations consist of the resale in the Caribbean region of cement
produced by our operations in Venezuela and Mexico. Our Central American and
Caribbean operations' domestic cement sales volumes increased approximately 9%
in the third quarter of 2002 compared to the third quarter of 2001. Excluding
our trading operations in the Caribbean region, our Central American and
Caribbean operations' domestic cement sales volumes increased approximately
11% in the third quarter of 2002 compared to the third quarter of 2001,
primarily as a result of our acquisition of Puerto Rican Cement Company, Inc.
in August 2000 and our inclusion of its operations, which represented 8% of
our total cement sales volume in the region during the third quarter of 2002.
Our Central American and Caribbean operations' ready-mix concrete sales
volumes increased approximately 162% in the third quarter of 2002 compared to
the third quarter of 2001, primarily attributable to the inclusion of our
Puerto Rican operations and the beginning of ready-mix concrete sales in Costa
Rica during the third quarter of 2002, as well as a 49% volume increase in our
Panamanian operations and a 15% increase in volumes in our Dominican Republic
operations during the same period. In addition, our Caribbean region trading
operations' cement sales volumes decreased approximately 3% in the third
quarter of 2002 compared to the third quarter of 2001. Our Central American
and Caribbean operations' average domestic sales price of cement increased 16%
in Dollar terms in the third quarter of 2002 compared to the third quarter of
2001, primarily due to increases in the average sales prices of cement in the
Dominican Republic and Nicaragua of 34% and 21%, respectively, as a result of
strong domestic demand, while the average sales price of cement decreased
slightly in Panama and remained flat in the other countries.
Our Philippine operations' domestic cement sales volumes increased
36% in the third quarter of 2002 compared to the third quarter of 2001,
primarily as a result of our commercial marketing programs, including
significant price decreases, in an effort to reduce competition from imports
and increase our market share. The construction sector of the economy remained
weak as a result of reduced public spending and cautious investor sentiment.
Our Philippine operations' average domestic sales price of cement decreased
32% in Philippine Peso terms in the third quarter of 2002 compared to the
third quarter of 2001, as a result of our significant price reductions in
connection with our commercial marketing programs described above.
Our Thai operations' domestic cement sales volumes increased 5% in
the third quarter of 2002 compared to the third quarter of 2001, primarily as
a result of our increased capacity utilization, which was partially offset by
unfavorable weather conditions during September. Our Thai operations' average
sales price of cement decreased 11% in Baht terms during the third quarter of
2002 compared to the third quarter of 2001, primarily due to significant
competitive pricing pressure towards the end of 2001 and early 2002, from
which prices have recovered only slightly during 2002. Cement prices in
Thailand are indirectly controlled by the Thai government.
Our Egyptian operations' domestic cement sales volumes remained flat
in the third quarter of 2002 compared to the third quarter of 2001, as a
result of a decrease in national domestic cement demand, which was offset by
an increase in our market share. Public spending in Egypt remained stable
during the third quarter of 2002 while the private sector remained depressed.
Our Egyptian operations' average sales price of cement decreased 4% in
Egyptian Pound terms during the third quarter of 2002 compared to the third
quarter of 2001, primarily as a result of our price reductions in an effort to
increase our market share. Egyptian cement prices are indirectly controlled by
the Egyptian government as a result of the government's control of almost 50%
of the industry's capacity.
Cost of Sales
Our cost of sales, including depreciation, increased 3% from Ps9,541
million in the third quarter of 2001 to Ps9,805 million in the third quarter
of 2002, primarily attributable to our investments in information technology
in an effort to increase the efficiency of our operations. As a percentage of
sales, cost of sales increased from 54.2% in the third quarter of 2001 to
55.8% in the third quarter of 2002.
Gross Profit
For the reasons mentioned above, our gross profit decreased by 4%
from Ps8,068 million in the third quarter of 2001 to Ps7,782 million in the
third quarter of 2002. Our gross margin decreased from 45.8% in the third
quarter of 2001 to 44.2% in the third quarter of 2002, primarily as a result
of lower average price levels in several of our markets.
Operating Expenses
Our operating expenses increased 5% from Ps3,963 million in the third
quarter of 2001 to Ps4,164 million in the third quarter of 2002, primarily as
a result of our investments in information technology in an effort to lower
our costs and make our business process more efficient as well as increased
efforts to strengthen our commercial and distribution network worldwide. As a
percentage of sales, our operating expenses increased from 22.5% in the third
quarter of 2001 to 23.7% in the third quarter of 2002.
Operating Income
For the reasons mentioned above, our operating income decreased 12%
from Ps4,104 million in the first quarter of 2001 to Ps3,618 million in the
first quarter of 2002.
Comprehensive Financing Income (Cost)
Comprehensive financing income (cost) can have a significant effect
on the financial statements of a company in periods of high inflation or
significant currency devaluation. Pursuant to Mexican GAAP, income statements
are required to present all financial effects of operating and financing the
business under inflationary conditions. For presentation purposes, all effects
are listed under comprehensive financing income (cost) and include:
o financial expense on borrowed funds;
o financial income on cash and temporary investments,
appreciation or depreciation of marketable securities and the
realized gain or loss from the sale of investments;
o foreign exchange gains or losses associated with monetary
assets and liabilities denominated in foreign currencies; and
o gains and losses resulting from having monetary liabilities or
assets exposed to inflation.
Three Months Ended
September 30,
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2001 2002
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(in millions of
constant Pesos)
Net comprehensive financing income (cost):
Financial expense....................................................... Ps (975) Ps (905)
Financial income........................................................ 140 96
Foreign exchange gain (loss), net....................................... (1,247) (58)
Gain (loss) on valuation of marketable securities and other
investments......................................................... (447) (2,521)
Monetary position gain.................................................. 672 849
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Net comprehensive financing income(cost)............................ Ps (1,857) Ps (2,539)
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Our net comprehensive financing income (cost) decreased from a loss
of Ps1,857 million in the third quarter of 2001 to a loss of Ps2,539 million
in the third quarter of 2002. The components of the net decrease are set forth
below. Our financial expense was Ps905 million for the third quarter of 2002,
a decrease of 7% from Ps975 million in the third quarter of 2001. The decrease
was primarily attributable to lower average interest rates and debt reduction.
Our financial income decreased 31% from Ps140 million in the third quarter of
2001 to Ps96 million in the third quarter of 2002 as a result of a lower level
of investments in fixed rate instruments and lower average interest rates
compared to the third quarter of 2001. Our net foreign exchange results
improved to a loss of Ps58 million in the third quarter of 2002 from a loss of
Ps1,247 million in the third quarter of 2001. The foreign exchange loss in the
third quarter of 2002 is primarily attributable to a depreciation of the Peso
against the Dollar, which was partially offset by a depreciation of the
Japanese Yen against the Dollar, as compared to the foreign exchange loss in
third quarter of 2001, which was primarily attributable to a depreciation of
the Peso against the Dollar. Our gain (loss) from valuation of marketable
securities decreased from a loss of Ps447 million in the third quarter of 2001
to a loss of Ps2,521 million in the third quarter of 2002, primarily
attributable to changes in the market prices of our investments and derivative
instruments, including a non-cash charge of Ps1,809 million related to changes
in the fair market value of our interest rate derivatives during the third
quarter of 2002 as a result of our swapping a portion of our floating rate
debt for fixed rate debt while interest rates continued to decline below these
fixed rate levels. Our monetary position gain increased from Ps672 million
during the third quarter of 2001 to Ps849 million during the third quarter of
2002, as a result of the increase in the weighted average inflation index in
the third quarter of 2002 compared to the same period in 2001.
Other Expenses, Net
Our other expenses, net for the third quarter of 2002 were Ps755
million, a 10% decrease from Ps843 million in the third quarter of 2001,
during which we incurred additional expenses related to sales of assets.
Income Taxes, Business Assets Tax and Employees' Statutory Profit Sharing
Our tax expense, consisting of income taxes and business assets tax,
decreased from Ps188 million in the third quarter of 2001 to Ps38 million in
the third quarter of 2002. Our average statutory income tax rate in the third
quarter of 2002 was approximately 35%. Our effective tax rate was 11.7% in the
third quarter of 2002 compared to 13.4% in the third quarter of 2001.
Employees' statutory profit sharing decreased from Ps93 million during the
third quarter of 2001 to Ps36 million during the third quarter of 2002. In the
third quarter of 2001, we were able to benefit from the differences between
the book and tax inflation. However, as a result of recent tax law changes, we
were not able to take advantage of this benefit in the third quarter of 2002
and we will not be able to take advantage of such benefit in future periods.
Majority Interest Net Income
Majority interest net income represents the difference between our
consolidated net income and minority interest net income, which is the portion
of our consolidated net income attributable to those of our subsidiaries in
which non-affiliated third parties hold interests. Changes in minority
interest net income in any period reflect changes in the percentage of the
stock of our subsidiaries held by non-affiliated third parties as of the end
of each month during the relevant period and consolidated net income
attributable to those subsidiaries.
For the reasons described above, our consolidated net income (before
deducting the portion allocable to minority interest) for the third quarter of
2002 decreased 72%, from Ps1,223 million in the third quarter of 2001 to Ps345
million in the third quarter of 2002. The portion of our consolidated net
income allocable to minority interest increased from Ps153 million in the
third quarter of 2001 to Ps176 million in the third quarter of 2002, primarily
as a result of significant increases in the consolidated net income from our
operations in Mexico and Venezuela compared to the third quarter of 2001.
Majority interest net income decreased 84%, from Ps1,070 million in the third
quarter of 2001 to Ps169 million in the third quarter of 2002. As a percentage
of net sales, majority interest net income decreased from 6.1% in the third
quarter of 2001 to 1.0% in the third quarter of 2002.
Recent Developments
On August 14, 2002, we established a new Mexican domestic medium term
promissory notes program for Ps5 billion and on October 18, 2002, we issued
the initial tranche under this program. The tranche consists of Ps800 million
in nominal pesos with a maturity of six years and a rate per annum equal to
the 182-day Mexican treasury rate (CETES) plus 145 basis points. This
transaction was swapped into Dollars through derivatives into a Dollar rate of
less than LIBOR +1%. We used the proceeds of the transaction to repay debt.