===============================================================================
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: January 19, 2005
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
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Contents
1. Press release announcing CEMEX's results for the fourth quarter of 2004
(attached hereto as exhibit 1).
2. 2004 fourth 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: January 19, 2005 By: /s/ Rafael Garza
---------------------------- ------------------------------------
Name: Rafael Garza
Title: Chief Comptroller
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1. Press release announcing CEMEX's results for the fourth quarter
of 2004.
2. 2004 third quarter earnings release.
EXHIBIT 1
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
CEMEX
Building the future(TM)
CEMEX'S FOURTH QUARTER 2004 OPERATING INCOME
GROWS 21% AND NET INCOME FOR THE YEAR
MORE THAN DOUBLES FROM 2003
MONTERREY, MEXICO, January 18, 2005 -CEMEX, S.A. de C.V. (NYSE: CX) announced
today that its consolidated net sales for the fourth quarter of 2004 were
US$2.0 billion, 12% higher than in the same period of 2003. This increase is
due to higher cement and ready-mix volumes in most of our markets, continued
price recovery, incremental sales of our multiproduct strategy, and a stronger
Mexican peso and euro during the quarter. The housing sector remained strong
in our major markets, as did infrastructure spending. The United States and
Spain benefited from better-than-expected December weather, which contributed
to higher construction activity. In real peso terms, net sales increased 5% to
22.3 billion.
Consolidated cement sales volumes remained flat during the quarter, reaching
16 million metric tons, while ready-mix volumes increased 10% to 6.0 million
cubic meters.
Free cash flow for the quarter decreased 19% versus the same quarter a year
ago, reaching US$200 million. EBITDA (operating income plus depreciation and
amortization) grew 14% to US$582 million. The consolidated EBITDA margin for
the quarter increased to 29.1% from 28.5% in the fourth quarter of 2003. These
increases are due to the continued recovery in cement prices, higher cement
and ready-mix volumes, lower costs of goods sold as a percentage of sales
despite higher energy costs per metric ton, and the stronger Mexican peso and
euro. In real peso terms, EBITDA increased 7% to MXP 6.5 billion.
Operating income for the quarter was US$414 million, up 21% over the same
period of 2003. In real peso terms, operating income increased 13% to MXP 4.6
billion.
Hector Medina, Executive Vice President of Planning and Finance, said: "I'm
pleased to report that reality exceeded our expectations for the year. The
average realized price for the CEMEX portfolio increased 4 percent in cement
and 7 percent in ready-mix in US dollar terms. We are therefore entering 2005
with higher average dollar prices than the average for 2004, partly as a
result of a stronger exchange rate, and thus maintaining the positive momentum
for prices on average. Domestic volume growth for the aggregate CEMEX
portfolio was 4 percent, with cement demand growing in 9 of our 14 largest
markets"
Selling, general, and administrative expenses (SG&A) as percentage of net
sales decreased 0.85 percentage points versus fourth quarter of 2003, and 1.04
percentage points in 2004 versus 2003. Transportation costs increased
throughout our markets during the year as a result of higher worldwide energy
costs. However, our ongoing cost-reduction initiatives put in place in the
past years have produced significant savings at the corporate and operating
levels, which have offset these higher costs.
For the last quarter of 2004, majority net income was 266% higher, reaching
US$334 million versus US$91 million a year ago, and increased 108% for the
full year 2004, reaching US$1.3 billion. The increase in 2004 is due to strong
operating performance, a significantly lower foreign-exchange loss, and gains
resulting from our derivative positions. For the fourth quarter, CEMEX
reported a foreign-exchange gain of US$38 million versus a loss of US$29
million in the same quarter of 2003 due mainly to the appreciation of the
Mexican peso against the US dollar during the quarter.
Net debt at the end of the year was at US$5.6 billion, 1% lower than that at
the end of 2003. During the quarter we drew approximately US$800 million from
the acquisition facilities for RMC to purchase 50 million shares of RMC.
Despite the stable level of indebtness, the net debt to EBITDA ratio decreased
to 2.2 times, from 2.7 times at the end of 2003, and interest coverage (EBITDA
divided by interest expense plus preferred dividends, all for the last twelve
months) reached 6.8 times, versus 5.3 times twelve months ago.
Our Mexican operations reported net sales of US$721 million, 9% higher than in
the fourth quarter 2003, and EBITDA of US$282 million, an increase of 3%.
Domestic cement sales volumes for the quarter remained flat, while ready-mix
volumes increased 22%. Cement demand during the year was driven mainly by
government infrastructure spending and by low- and middle - income housing.
Total mortgages awarded for the year represented an increase of about 2%
versus 2003 levels. The self construction sector remained flat for the year,
as the moderate increase in the aggregate disposable income did not keep up
with significant price increases of other building material such as steel.
In The United States, net sales for the quarter were US$503 million, 13%
higher, while EBITDA reached US$130 million, an increase of 31%. Domestic
cement and ready-mix sales volumes for the quarter grew 5% and 2%,
respectively, versus fourth quarter 2003. The combination of a strong
construction market throughout the year and better-than-expected December
weather led to the strong volume growth. The main drivers of demand during the
year were the residential sector--driven mainly by a favorable interest-rate
environment, as well as positive demographics and household formation--and the
public sector. The industrial and commercial sector, which declined in 2003,
made a strong recovery and grew in 2004.
Our operations in Spain reported net sales of US$336 million in the fourth
quarter of 2004, up 22% from the year-earlier period. EBITDA reached US$100
million, representing an increase of 28%. Domestic cement sales volumes grew
5% while ready-mix volumes increased 6%, compared to the same quarter of 2003.
The strength of the economy combined with a robust construction sector during
the year and better than expected weather in November and December led to the
increase in cement and ready-mix volumes. The residential sector was one of
the main drivers of demand, with housing starts increasing about 10% versus
2003 levels. Public works spending remained an important component of cement
consumption; the sector's primary catalyst continues to be the Spanish
infrastructure plan, which partially mitigated the slowdown in post-electoral
spending during the year.
In Venezuela, fourth-quarter net sales grew 6% to US$89 million, while EBITDA
remained flat at US$38 million. Domestic cement sales volumes increased 9%,
while ready-mix volumes decreased 1% compared to fourth quarter 2003. The main
drivers of demand were the self construction and commercial sectors.
Government spending remained stable, but at a higher level than in the
previous year. Construction from the private sector is increasing as
confidence in the economy recovers.
Our Colombian operation's net sales were US$63 million, up 9% versus fourth
quarter 2003, while EBITDA decreased 5% to US$33 million. Domestic cement
volume increased 9% and ready-mix volume decreased 5% in the fourth quarter,
versus the same period a year ago. The main drivers of demand during the year
were the commercial sector, and to a lesser extent, the residential sector.
Public spending did not increase during the year, but it is now showing signs
of recovery with new projects underway in several regions of the country.
In Egypt, net sales for the quarter grew 18% to US$47 million, and EBITDA
increased 16%, reaching US$19 million. Domestic cement sales volumes declined
8% versus fourth quarter 2003. The decrease in cement volumes resulted from a
slowdown in government infrastructure spending and a reduction in worker
remittances due to the political tension in the region, which was partially
offset by a more than 170 percent increase in exports versus 2003.
Our operations in Central America and the Caribbean reported net sales of
US$144 million, up 7% versus fourth quarter 2003, while EBITDA decreased 4% to
US$32 million. Cement sales and ready-mix volumes were up 3% and 5%,
respectively, versus the same quarter a year ago because all of our markets in
the region, with the exception of the Dominican Republic, increased their
cement and ready-mix volumes.
Our Asian operations, which include the Philippines, Thailand, Taiwan, and
Bangladesh, reported net sales of US$50 million, 10% higher than in fourth
quarter 2003, while EBITDA increased 180% to US$12 million. Domestic cement
sales volumes were down 5% compared to the same quarter of 2003, due mainly to
lower volumes in the Philippines.
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.
----------------------------------------------------
[LOGO OMITTED]
2004
FOURTH QUARTER RESULTS
- --------------------------------------------------------------------------------
Fourth quarter Fourth quarter
------------------------ --------------
2004 2003 % Var. 2004 2003
- -----------------------------------------------------------------------------
Net sales 2,002 1,787 12% % of Net Sales
- -----------------------------------------------------------------------------
Gross profit 863 757 14% 43.1% 42.4%
- -----------------------------------------------------------------------------
Operating income 414 342 21% 20.7% 19.1%
- -----------------------------------------------------------------------------
Majority net income 334 91 266% 16.7% 5.1%
- -----------------------------------------------------------------------------
EBITDA 582 509 14% 29.1% 28.5%
- -----------------------------------------------------------------------------
Free cash flow 200 247 (19%) 10.0% 13.8%
- -----------------------------------------------------------------------------
- ------------------------------------------------
Net debt 5,588 5,641 (1%)
- ------------------------------------------------
Net debt/EBITDA 2.2 2.7
- ------------------------------------------------
Interest coverage 6.8 5.3
- ------------------------------------------------
Quarterly earnings
per ADR 0.99 0.28 250%
- ------------------------------------------------
Average ADRs
outstanding 339.2 323.9 5%
- ------------------------------------------------
================================================================================
In millions of US dollars, except ratios and per-ADR amounts.
Average ADRs outstanding are presented in millions of ADRs.
Consolidated net sales grew to US$2,002 million, representing an increase of
12% over those of fourth quarter 2003, due to higher cement and ready-mix
volumes in most of our markets, continued price recovery, incremental sales of
our multiproduct strategy, and a stronger Mexican peso and euro during the
quarter. The housing sector remained strong in our major markets, as did
infrastructure spending. The United States and Spain benefited from
better-than-expected December weather, which contributed to higher
construction activity.
Cost of goods sold as a percentage of net sales decreased 0.7 percentage
points versus fourth quarter 2003 and for the full year decreased 1.37
percentage points versus 2003. Higher energy costs were more than offset by
higher volumes and average prices in most of our markets.
Selling, general, and administrative expenses (SG&A) as a percentage of net
sales during the quarter decreased 0.85 percentage points versus fourth
quarter 2003 and in 2004 decreased 1.04 percentage points versus 2003.
Transportation costs increased throughout our markets during the year as a
result of higher worldwide energy costs. However, our ongoing cost-reduction
initiatives put in place in the past years have produced significant savings
at the corporate and operating levels, which have offset these higher costs.
EBITDA reached US$582 million, representing an increase of 14% over that of
fourth quarter 2003. Our consolidated EBITDA margin in the fourth quarter
increased 0.6 percentage points to 29.1% from 28.5% in the same period of
2003. These increases are due to the continued recovery in cement prices,
higher cement and ready-mix volumes, lower costs of goods sold as a percentage
of sales despite higher energy costs per metric ton, and the stronger Mexican
peso and euro.
Foreign-exchange gain (loss) for the quarter was a gain of US$38 million
versus a loss of US$29 million in fourth quarter 2003. The gain was due mainly
to the appreciation of the Mexican peso against the US dollar during the
quarter.
Majority net income for the quarter rose 266%, to US$334 million from US$91
million in fourth quarter 2003. Majority net income for the year increased
108%, to US$1,307 million from US$629 million in 2003. The increase in 2004 is
due to strong operating performance, a significantly lower foreign-exchange
loss, and gains resulting from our derivative positions.
Net debt at the end of the year was US$5,588 million, 1% lower than at the end
of 2003. During the quarter we drew approximately US$800 million from the
acquisition facilities for RMC to purchase 50 million shares of RMC. Despite
the stable level of indebtedness, the net-debt-to-EBITDA ratio decreased to
2.2 times from 2.7 times at the end of 2003, and interest coverage reached 6.8
times, compared with 5.3 times twelve months ago.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 1
US dollar translation methodology, and other important disclosures.
EBITDA and Free Cash Flow(1) [LOGO OMITTED]
- --------------------------------------------------------------------------------
Fourth quarter January - December
--------------------- --------------------------
2004 2003 % Var. 2004 2003 % Var.
- -------------------------------------------------------------------------------------------------------
Operating income 414 342 22% 1,852 1,455 27%
- -------------------------------------------------------------------------------------------------------
+ Depreciation and operating amortization 168 167 686 653
- -------------------------------------------------------------------------------------------------------
EBITDA 582 509 14% 2,538 2,108 20%
- -------------------------------------------------------------------------------------------------------
- - Net financial expense 92 91 349 364
- -------------------------------------------------------------------------------------------------------
- - Capital expenditures 192 132 434 393
- -------------------------------------------------------------------------------------------------------
- - Change in working capital 18 8 86 61
- -------------------------------------------------------------------------------------------------------
- - Taxes paid 71 16 139 73
- -------------------------------------------------------------------------------------------------------
- - Preferred dividend payments(2) 0 (2) 0 19
- -------------------------------------------------------------------------------------------------------
- - Other cash items (net) 9 17 52 55
- -------------------------------------------------------------------------------------------------------
Free cash flow 200 247 (19%) 1,478 1,143 29%
- -------------------------------------------------------------------------------------------------------
In millions of US dollars.
During the quarter, US$200 million of free cash flow plus approximately US$800
million drawn from our acquisition facilities for RMC were used as follows:
US$786 million to acquire 50 million shares of RMC; US$51 million to acquire
minorities in CEMEX Asia Holdings; US$38 million for the premium paid to early
repurchase our 2006 and 2009 notes in October; US$19 million for the
settlement of the appreciation warrants, which expired in December; US$33
million in fees and expenses related to the acquisition of RMC; US$15 million
in interest payments in excess of accrued interest; and for other investments.
Debt-Related Information
==============================================================================================================================
Fourth quarter Third quarter Fourth quarter
---------------------- ------------- --------------
2004 2003 % Var. 2004 2004 2003
- --------------------------------------------------------------------- ----------------------------------------------
Total debt(2) 5,931 5,866 1% 5,730
- -------------------------------------------------------------------- Currency denomination
Short-term 18% 23% 23%
- -------------------------------------------------------------------- ----------------------------------------------
Long-term 82% 77% 77% US dollar 56% 68%
- -------------------------------------------------------------------- ----------------------------------------------
Equity obligations(2) 0 66 0 Yen 15% 13%
- -------------------------------------------------------------------- ----------------------------------------------
Cash and cash equivalents 342 291 18% 1,051 Euro 14% 18%
- -------------------------------------------------------------------- ----------------------------------------------
Net debt 5,588 5,641 (1%) 4,679 British pound 14% 0%
- -------------------------------------------------------------------- ----------------------------------------------
Other 1% 1%
- -------------------------------------------------------------------- ----------------------------------------------
Interest expense 98 94 4% 84
- -------------------------------------------------------------------- ----------------------------------------------
Preferred dividends(2) 0 (2) 0
- -------------------------------------------------------------------- Interest rate
Interest coverage 6.8 5.3 6.7
- -------------------------------------------------------------------- ----------------------------------------------
Net debt/EBITDA 2.2 2.7 1.9 Fixed 62% 61%
- -------------------------------------------------------------------- ----------------------------------------------
Variable 38% 39%
- -------------------------------------------------------------------- ----------------------------------------------
In millions of US dollars, except ratios, which are calculated for the
last-twelve-month period.
Other developments
During the quarter we successfully completed the syndication of the
underwriting phase for the funds required for the acquisition of RMC; 29 banks
participated, and the oversubscription rate was two times. The average
borrowing rate of this facility is LIBOR plus 1%.
- ---------
(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 generally accepted accounting principles in Mexico
(Mexican 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 Mexican-GAAP cash-flow
measures to present as comparable to EBITDA or free cash flow.
(2) Prior to 2004, according to Mexican accounting rules existing at that
time, the outstanding balance of preferred equity and capital securities
was recognized in the minority interest of 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 was treated as a liability during 2004, and not as a minority
interest, and its preferred dividend is treated as financial expense.
During November 2004 we exercised an option to liquidate the remaining
balance of capital securities.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 2
US dollar translation methodology, and other important disclosures.
Equity-Related Information [LOGO OMITTED]
================================================================================
One CEMEX ADR represents five CEMEX CPOs. The following amounts are expressed
in CPO terms.
Beginning-of-quarter CPO-equivalent units outstanding 1,695,108,713
- --------------------------------------------------------------------------------
Exercise of stock options not hedged 1,574,660
Less increase (decrease) in the number of CPOs held in
subsidiaries (809,592)
End-of-quarter CPO-equivalent units outstanding 1,697,492,965
- --------------------------------------------------------------------------------
Outstanding units equal total shares issued by CEMEX less shares held in
subsidiaries.
Employee stock-option plans
As of December 31, 2004, directors, officers, and other employees under our
employee stock-option plans had outstanding options to acquire 165,192,657
CEMEX CPOs. The total amount of CPOs underlying options in these programs is
equivalent to 9.7% of our total CPOs outstanding. However, as 97.9% of the
total options outstanding are hedged through equity forward agreements, only
the remaining 2.1% will dilute existing shares when exercised.
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.
Fourth quarter Third quarter
-------------- -------------
Notional amounts 2004 2003 2004
- ---------------------------------------------------------------------------
Equity(1) 1,157 1,085 1,179
Foreign-exchange(2) 6,016 2,893 5,953
Interest-rate 2,118 2,224 2,120
- ---------------------------------------------------------------------------
Estimated aggregate fair market value 97 (233) (197)
- ---------------------------------------------------------------------------
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 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
market 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 market value of
the related derivative instruments are recognized temporarily in equity and
are 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$192 million,
arising from the fair market value recognition of its derivatives portfolio as
of December 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.
- ---------
(1) The aggregate weighted-average exercise price on December 31, 2004, for
CEMEX's outstanding stock options was US$35.22 per ADR. On that same
date, the aggregate weighted-average strike price of CEMEX's equity
forward agreements put in place to hedge these stock options was US$35.03
per ADR.
(2) CEMEX has hedged the purchase price of the remaining 81.2% of RMC shares
mainly through foreign-exchange derivative contracts in the amount of
(pound)1,869 million. The purchase price under these contracts put in
place in September and October of 2004 was not to exceed 1.795
US$/(pound). As of December 31, 2004 these contracts had a positive fair
market value of US$126 million.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 3
US dollar translation methodology, and other important disclosures.
Other Activities [LOGO OMITTED]
================================================================================
Announcements related to the acquisition of RMC
January 6, 2005--CEMEX announced that whilst the European Commission had
cleared the acquisition under the EC Merger regulation, clearance had not yet
been received from the US antitrust authorities. Accordingly, the Court
Hearing in the UK will be postponed from January 11, 2005. CEMEX remains
confident that the necessary clearance will be obtained and expects that the
Scheme will become effective during February 2005.
December 9, 2004--CEMEX announced that the European Commission cleared the
acquisition under the EC merger regulation.
November 17, 2004--CEMEX announced that at a Court Meeting and an
Extraordinary Meeting of RMC Shareholders in connection with he recommended
acquisition by CEMEX of RMC, all the resolutions proposed received the
overwhelming support of Shareholders. At a Court Meeting a majority in number
of RMC Shareholders who voted (either in person or by proxy), representing
99.98% by value, voted in favor of the resolution to approve the Scheme. The
resolution was accordingly passed. At the Extraordinary General Meeting the
proposed resolution to approve the Scheme and provide for its implementation
was also passed by the requisite majority.
Terms used in the above-mentioned announcements shall have the same meanings
as set out in the Scheme document dated 25 October 2004.
CEMEX announces expiration of its appreciation warrants and ADWs
On December 21, 2004, CEMEX announced that its appreciation warrants and
American Depositary Warrants (ADWs), each representing five appreciation
warrants, expired in accordance with their terms. Holders of appreciation
warrants and ADWs received an appreciation value equal to US$2.041231 (or
about MXN 22.84) per appreciation warrant (US$10.206154, or MXN114.21, per
ADW) less any applicable Mexican withholding tax. Appreciation warrant holders
received their appreciation value in the form of CPOs. ADW holders received
their appreciation value in the form of CEMEX American Depositary Shares
(ADSs).
Of the 103,790,945 appreciation warrants (including appreciation warrants
represented by ADWs) originally issued, 9,240,194 appreciation warrants
(including appreciation warrants represented by ADWs) were outstanding as of
their expiration, due primarily to CEMEX's purchase of close to 90% of the
outstanding appreciation warrants under a cash tender offer, which was
consummated in January 2004 (the purchase price paid by CEMEX for the
appreciation warrants and ADWs tendered in the offer was MXN8.10 per
appreciation warrant and MXN40.50 per ADW), and several transactions between
CEMEX and its subsidiaries and pension funds holding appreciation warrants.
Accordingly, the total amount of appreciation value CEMEX paid in respect of
the outstanding appreciation warrants and ADWs was approximately
US$18,861,368.
CEMEX announces plans to divest US assets
On November 15, 2004, CEMEX announced that it had signed a letter of intent
with Votorantim Cimentos LTDA for the sale of certain CEMEX assets in the
Great Lakes region of the United States, subject to definitive documentation
and the satisfaction of customary conditions precedent. Votorantim presented a
nonbinding offer for the Charlevoix and Dixon-Marquette cement plants and
other associated operating assets in the region.
CEMEX began evaluating alternatives to divest these assets at the beginning of
2004, after reviewing its strategic position in the United States. The
potential transaction would be structured as a sale of assets valued at US$400
million. The transaction is expected to close in the first quarter of 2005.
The proceeds will be used to either pay down debt or reduce the level of
indebtedness required for the RMC acquisition.
Total production capacity of both cement plants is close to 2 million metric
tons per year and represents about ten percent of the operating cash flow
generation of our US business.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 4
US dollar translation methodology, and other important disclosures.
Operating Results--Mexico [LOGO OMITTED]
================================================================================
Net sales were US$721 million, representing an increase of 9% versus fourth
quarter 2003.
Domestic gray cement volume remained flat versus fourth quarter 2003, and
increased 2% for the full year. Ready-mix volume increased 22% versus fourth
quarter 2003 and rose 16% for the year. Cement and ready-mix demand during the
year was driven mainly by government infrastructure spending and by low- and
middle-income housing. Total mortgages awarded for the year represented an
increase of about 2% versus 2003 levels. The self-construction sector remained
flat for the year, as the moderate increase in the aggregate disposable income
did not keep up with significant price increases of other building materials
such as steel.
Average realized gray cement price decreased 5% in constant pesos, and
decreased 1% in dollar terms, versus fourth quarter 2003. For the full year
2004, gray cement prices decreased 3% in both constant pesos and dollar terms
versus 2003. In nominal terms, cement prices were up 2% during the year but
were down in real terms as inflation reached 5% in 2004. The average ready-mix
price decreased 1% in constant pesos and increased 3% in dollar terms compared
with fourth quarter 2003. For the full year 2004, ready-mix prices decreased
1% in both constant pesos and dollar terms versus 2003.
The EBITDA margin decreased to 39.1% from 41.4% in fourth quarter 2003. The
decrease of 2.1 percentage points was due mainly to a change in the product
mix resulting from a higher proportion of ready-mix and multiproduct sales,
and lower average prices.
United States
================================================================================
Net sales were US$503 million, representing an increase of 13% compared with
fourth quarter 2003.
Domestic cement volume increased 5% versus fourth quarter 2003 and increased
9% for the full year versus 2003. Ready-mix volume increased 2% compared with
fourth quarter 2003 and increased 8% in 2004 versus 2003. The combination of a
strong construction market throughout the year and better-than-expected
December weather led to the strong volume growth. The main drivers of demand
during the year were the residential sector--driven mainly by a favorable
interest-rate environment, as well as positive demographics and household
formation--and the public sector. The industrial and commercial sector, which
declined in 2003, made a strong recovery and grew in 2004.
The average realized cement price increased 11% versus fourth quarter 2003 and
grew 5% for the full year, while the average ready-mix price increased 22%
over the fourth quarter 2003 and also increased 11% for the full year.
The EBITDA margin increased to 25.8% from 22.3% in fourth quarter 2003. The
increase of 3.5 percentage points was due mainly to higher cement and
ready-mix volumes and higher cement prices, which were partially offset by
higher fuel, import, and transportation costs.
Spain
================================================================================
Net sales were US$336 million, representing an increase of 22% versus fourth
quarter 2003.
Domestic cement volume increased 5% over that of fourth quarter 2003 and grew
3% for the year. Ready-mix volume increased 6% in fourth quarter 2004 and rose
2% for the full year. The strength of the economy, combined with a robust
construction sector during the year and better-than-expected weather in
November and December, led to the increase in cement volumes. The residential
sector was one of the main drivers of demand, with housing starts increasing
at about 10% versus 2003 levels. Public-works spending remained an important
component of cement consumption; the sector's primary catalyst continues to be
Spain's infrastructure plan, which partially mitigated the slowdown in
post-electoral spending during the year.
The average domestic cement price increased 4% in euros and 14% in dollar
terms compared with fourth quarter 2003. For the full year, cement prices were
3% higher in euros and 13% higher in dollar terms versus 2003. The average
ready-mix price increased 5% in euros and 15% in dollar terms versus fourth
quarter 2003 and, for the full year, increased 5% in euros and 14% in dollar
terms.
The EBITDA margin increased to 29.9% from 28.6% in third quarter 2003. The
increase of 1.3 percentage points was due mainly to better cement and
ready-mix volumes and prices.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 5
US dollar translation methodology, and other important disclosures.
Venezuela
================================================================================
Net sales were US$89 million, representing an increase of 6% versus fourth
quarter 2003.
Domestic cement volume increased 9% in the fourth quarter and 20% for the year
versus the same periods in 2003. Ready-mix volume decreased 1% compared with
fourth quarter 2003 and increased 13% for the year. The main drivers of demand
were the self-construction and commercial sectors, while government spending
remained stable. Construction from the private sector is increasing as
confidence in the economy recovers.
Export volume increased 27% compared with fourth quarter 2003 and increased
26% for the full year. Exports to North America and the Caribbean accounted
for 77% and 23%, respectively, of CEMEX Venezuela's fourth-quarter exports.
Domestic cement prices decreased 10% in both constant bolivar and dollar terms
compared with fourth quarter 2003. For the full year, cement prices were 12%
lower in constant bolivars and 9% lower in dollar terms. The average ready-mix
price increased 6% in both constant bolivar and dollar terms compared with
fourth quarter 2003. For the full year, ready-mix prices were 2% lower in
constant bolivars and 1% higher in dollar terms.
The EBITDA margin decreased to 43.0% from 45.5% in fourth quarter 2003. The
decrease of 2.5 percentage points was due mainly to lower cement prices,
higher transportation costs, and the extraordinary maintenance of one of our
kilns.
Colombia
================================================================================
Net sales were US$63 million, representing an increase of 9% over fourth
quarter 2003.
Domestic cement volume increased 9% in the fourth quarter versus the same
quarter last year and in 2004 increased 8% versus 2003. Ready-mix volume
decreased 5% in the quarter but increased 13% for the year. The main drivers
of demand during the year were the commercial sector and, to a lesser extent,
the residential sector. Public spending, which did not increase during the
year, is now showing signs of recovery, with new projects underway in several
regions of the country.
Average realized cement price decreased 18% in Colombian pesos and 6% in
dollar terms versus fourth quarter 2003. For the full-year 2004, cement prices
were 8% lower in Colombian pesos and 1% higher in dollar terms versus 2003.
The average ready-mix price increased 6% in Colombian pesos and rose 21% in
dollar terms versus fourth quarter 2003. For the full year, ready-mix prices
were 8% higher in Colombian pesos and 19% higher in dollar terms versus 2003.
The EBITDA margin decreased to 52.0% from 59.7% in fourth quarter 2003. The
decrease of 7.7 percentage points was due mainly to higher fuel costs and
lower cement prices, which were partially offset by higher cement and
ready-mix volumes and higher ready-mix prices.
Other Operations
================================================================================
Net sales for our Central American and Caribbean operations increased 7%
versus fourth quarter 2003, reaching US$144 million. Domestic cement volume
increased 3%, and ready-mix volume increased 5%, because all of our markets in
the region, with the exception of the Dominican Republic, increased their
cement and ready-mix volumes. For the full year, domestic cement volumes
remained flat and ready-mix volume decreased 1% versus 2003.
In Egypt, net sales and EBITDA increased 18% and 16%, respectively, while
domestic cement volume decreased 8%, versus fourth quarter 2003. Domestic
cement prices increased 23% in Egyptian pound terms and 22% in dollar terms
versus fourth quarter 2003. For the full year, cement volumes decreased 6%
versus 2003. The decrease in cement volumes resulted from a slowdown in
government infrastructure spending and a reduction in worker remittances due
to political tension in the region. This decrease was partially offset by a
more than 170 percent increase in exports versus 2003.
Our Asian operations increased their net sales by 10% compared with fourth
quarter 2003. EBITDA was 180% higher during the quarter, due mainly to better
prices in dollar terms. Domestic cement volume for the region decreased 5% for
the quarter and 4% for the year, due mainly to lower volumes in the
Philippines. Our weighted-average domestic cement prices in the region
increased 16% during the quarter and 21% for the year in dollar terms versus
the comparable periods in 2003. The EBITDA margin for the region increased 15
percentage points, to 24.7% from 9.7%, in fourth quarter 2003, due mainly to
the strong recovery of cement prices and a reduction in SG&A expenses.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 6
US dollar translation methodology, and other important disclosures.
Consolidated Income Statement & Balance Sheet [LOGO OMITTED]
================================================================================
CEMEX S.A. de C.V. AND SUBSIDIARIES
(Thousands of U.S. Dollars, except per ADR amounts)
January - December Fourth quarter
--------------------------- ---------------------------
INCOME STATEMENT 2004 2003 % Var. 2004 2003 % Var.
- ------------------------------------------------------------------------------------------------------------------------------
Net Sales 8,149,360 7,164,384 14% 2,002,081 1,786,908 12%
Cost of Sales (4,586,349) (4,130,046) 11% (1,138,727) (1,029,487) 11%
- -------------------------------------------------------------------------------------------------------------------------------
Gross Profit 3,563,011 3,034,338 17% 863,353 757,421 14%
Selling, General and
Administrative Expenses (1,711,334) (1,579,134) 8% (449,020) (415,859) 8%
- -------------------------------------------------------------------------------------------------------------------------------
Operating Income 1,851,677 1,455,204 27% 414,334 341,562 21%
Financial Expenses (372,230) (380,648) (2%) (98,027) (93,723) 5%
Financial Income 23,421 16,691 40% 6,500 2,502 160%
Exchange Gain (Loss), Net (23,565) (171,589) (86%) 37,836 (29,080) N/A
Monetary Position Gain (Loss) 385,868 327,667 18% 101,957 90,424 13%
Gain (Loss) on Marketable Securities 119,844 (59,570) N/A 121,470 (24,649) N/A
Total Comprehensive Financing (Cost) Income 133,339 (267,449) N/A 169,738 (54,525) N/A
Other Expenses, Net (483,861) (456,737) 6% (192,032) (187,672) 2%
- -------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 1,501,155 731,017 105% 392,039 99,365 295%
Income Tax (183,451) (89,612) 105% (51,949) (13,301) 291%
Employees' Statutory Profit Sharing (29,637) (16,989) 74% (21,846) (9,148) 139%
Total Income Tax & Profit Sharing (213,088) (106,601) 100% (73,795) (22,448) 229%
- -------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 1,288,067 624,416 106% 318,244 76,917 314%
Participation in Unconsolidated Subsidiaries 40,061 34,768 15% 13,793 17,346 (20%)
Consolidated Net Income 1,328,128 659,184 101% 332,037 94,262 252%
Net Income Attributable to Min. Interest 20,932 30,412 (31%) (2,347) 2,929 N/A
MAJORITY INTEREST NET INCOME 1,307,196 628,772 108% 334,384 91,333 266%
- -------------------------------------------------------------------------------------------------------------------------------
EBITDA 2,538,260 2,108,028 20% 581,752 508,524 14%
Earnings per ADR 3.93 1.99 97% 0.99 0.28 250%
- -------------------------------------------------------------------------------------------------------------------------------
As of December 31
--------------------------
BALANCE SHEET 2004 2003 % Var.
- -------------------------------------------------------------------------------------------------------------------------------
Total Assets 17,380,871 16,015,780 9%
Cash and Temporary Investments 342,327 291,382 17%
Trade Accounts Receivables 427,986 469,534 (9%)
Other Receivables 454,613 404,217 12%
Inventories 632,569 594,580 6%
Other Current Assets 94,145 66,684 41%
Current Assets 1,951,640 1,826,396 7%
Fixed Assets 9,613,453 9,265,408 4%
Other Assets 5,815,778 4,923,975 18%
- ------------------------------------------------------------------------------------------
Total 9,161,228 9,249,638 (1%)
Liabilities
Current 2,412,362 2,829,344 (15%)
Liabilities
Long-Term Liabilities 4,886,847 4,536,828 8%
Other 1,862,019 1,883,465 (1%)
Liabilities
- -------------------------------------------------------------------------------------------
Consolidated Stockholders' Equity 8,219,644 6,766,142 21%
Stockholders' Equity Attributable
to Minority Interest 388,930 531,965 (27%)
Stockholders' Equity Attributable
to Majority Interest 7,830,714 6,234,177 26%
- -------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 7
US dollar translation methodology, and other important disclosures.
CONSOLIDATED INCOME STATEMENT & BALANCE SHEET [LOGO OMITTED]
================================================================================
CEMEX S.A. DE C.V. AND SUBSIDIARIES
(Thousands of Mexican Pesos in real terms as of december 31, 2004
except per ADR amounts)
January - December Fourth quarter
----------------------------- ----------------------------
INCOME STATEMENT 2004 2003 % VAR. 2004 2003 % VAR.
- ---------------------------------------------------------------------------------------------------------------------------------
Net Sales 90,783,871 85,552,604 6% 22,303,180 21,338,139 5%
Cost of Sales (51,091,932) (49,318,437) 4% (12,685,422) (12,293,488) 3%
- ---------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT 39,691,939 36,234,167 10% 9,617,758 9,044,652 6%
Selling, General and Administrative Expenses (19,064,262) (18,857,031) 1% (5,002,077) (4,965,933) 1%
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Income 20,627,677 17,377,136 19% 4,615,681 4,078,718 13%
Financial Expenses (4,146,639) (4,545,457) (9%) (1,092,019) (1,119,177) (2%)
Financial 260,910 199,312 31% 72,416 29,883 142%
Income
Exchange Gain (Loss), Net (262,511) (2,049,013) (87%) 421,496 (347,259) N/A
Monetary Position Gain (Loss) 4,298,565 3,912,795 10% 1,135,803 1,079,791 5%
Gain (Loss) on Marketable Securities 1,335,066 (711,350) N/A 1,353,181 (294,344) N/A
Total Comprehensive Financing (Cost) Income 1,485,392 (3,193,713) N/A 1,890,877 (651,105) N/A
Other Expenses, Net (5,390,207) (5,454,070) (1%) (2,139,241) (2,241,059) (5%)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income Before Income Taxes 16,722,862 8,729,353 92% 4,367,316 1,186,555 268%
Income Tax (2,043,642) (1,070,096) 91% (578,716) (158,830) 264%
Employees' Statutory Profit Sharing (330,158) (202,872) 63% (243,361) (109,234) 123%
Total Income Tax & Profit Sharing (2,373,799) (1,272,968) 86% (822,077) (268,064) 207%
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income Before Participation
of Uncons. Subs. and Ext. Items 14,349,062 7,456,385 92% 3,545,239 918,491 286%
Participation in Unconsolidated Subsidiaries 446,281 415,179 7% 153,650 207,131 (26%)
Consolidated Net Income 14,795,344 7,871,565 88% 3,698,890 1,125,622 229%
Net Income Attributable to Min. Interest 233,184 363,164 (36%) (26,145) 34,975 N/A
Majority Interest Net Income 14,562,160 7,508,401 94% 3,725,035 1,090,648 242%
- ---------------------------------------------------------------------------------------------------------------------------------
EBITDA 28,276,216 25,172,758 12% 6,480,712 6,072,479 7%
Earnings Per ADR 43.74 22.42 95% 10.98 3.17 246%
- ---------------------------------------------------------------------------------------------------------------------------------
As of December 31
---------------------------
BALANCE SHEET 2004 2003 % VAR.
- -------------------------------------------------------------------------------------
Total Assets 193,622,905 191,250,451 1%
Cash and Temporary Investments 3,813,520 3,479,499 10%
Trade Accounts Receivables 4,767,767 5,606,880 (15%)
Other Receivables 5,064,388 4,826,903 5%
Inventories 7,046,813 7,100,107 (1%)
Other Current Assets 1,048,779 796,295 32%
Current Assets 21,741,268 21,809,685 (0%)
Fixed Assets 107,093,867 110,641,723 (3%)
Other Assets 64,787,770 58,799,043 10%
- -------------------------------------------------------------------------------------
Total Liabilities 102,056,075 110,453,401 (8%)
Current Liabilities 26,873,711 33,786,264 (20%)
Long-Term Liabilities 54,439,471 54,175,974 0%
Other Liabilities 20,742,892 22,491,163 (8%)
- -------------------------------------------------------------------------------------
CONSOLIDATED STOCKHOLDERS' EQUITY 91,566,830 80,797,050 13%
Stockholders' Equity Attributable to Minority
Interest 4,332,680 6,352,400 (32%)
Stockholders' Equity Attributable to Majority
Interest 87,234,150 74,444,650 17%
- -------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definition of terms, U.S. Page 8
Dollar translation methodology and other important disclosures.
Operating Summary per Country [LOGO OMITTED]
================================================================================
In thousands of U.S. dollars
January - December Fourth quarter
--------------------- -----------------------
NET SALES 2004 2003 % Var. 2004 2003 % Var.
- --------------------------------------------------------------------------------------------------------------------------
Mexico 2,920,055 2,628,544 11% 720,645 663,625 9%
U.S.A. 1,959,174 1,718,265 14% 503,260 445,625 13%
Spain 1,358,543 1,195,432 14% 336,071 275,068 22%
Venezuela 350,301 318,894 10% 88,946 83,840 6%
Colombia 263,199 217,234 21% 62,655 57,323 9%
Egypt 190,734 132,288 44% 46,503 39,300 18%
Central America & the Caribbean region 661,724 562,301 18% 144,310 134,731 7%
Asia region 201,228 187,204 7% 49,633 45,273 10%
- --------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 244,401 204,222 20% 50,058 42,123 19%
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 8,149,360 7,164,384 14% 2,002,081 1,786,908 12%
- --------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT
- --------------------------------------------------------------------------------------------------------------------------
Mexico 1,657,077 1,516,616 9% 399,685 381,105 5%
U.S.A. 658,869 549,817 20% 180,107 152,212 18%
Spain 503,246 425,234 18% 127,821 98,792 29%
Venezuela 160,004 148,358 8% 38,546 39,446 (2%)
Colombia 160,547 121,124 33% 35,519 34,454 3%
Egypt 99,651 60,491 65% 23,931 20,350 18%
Central America & the Caribbean region 231,944 179,995 29% 44,261 45,324 (2%)
Asia region 83,253 53,657 55% 20,466 14,453 42%
- --------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations 8,420 (20,955) N/A (6,982) (28,714) (76%)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 3,563,011 3,034,338 17% 863,353 757,421 14%
- --------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME
- --------------------------------------------------------------------------------------------------------------------------
Mexico 1,105,934 1,023,738 8% 242,583 237,487 2%
U.S.A. 302,707 219,998 38% 87,350 59,331 47%
Spain 331,522 255,770 30% 78,953 53,904 46%
Venezuela 109,517 103,465 6% 25,346 26,361 (4%)
Colombia 120,087 87,750 37% 24,943 25,011 (0%)
Egypt 57,613 28,611 101% 12,123 8,708 39%
Central America & the Caribbean region 148,842 97,073 53% 22,446 23,800 (6%)
Asia region 29,479 (11,815) N/A 6,950 (3,106) N/A
- --------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (354,025) (349,386) 1% (86,359) (89,934) (4%)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 1,851,677 1,455,204 27% 414,334 341,562 21%
- --------------------------------------------------------------------------------------------------------------------------
EBITDA
- --------------------------------------------------------------------------------------------------------------------------
Mexico 1,263,745 1,166,338 8% 281,814 274,875 3%
U.S.A. 462,189 369,937 25% 129,653 99,286 31%
Spain 417,973 339,055 23% 100,396 78,635 28%
Venezuela 158,127 152,680 4% 38,254 38,110 0%
Colombia 152,101 129,597 17% 32,593 34,197 (5%)
Egypt 87,147 57,844 51% 18,886 16,284 16%
Central America & the Caribbean region 186,623 133,699 40% 31,969 33,426 (4%)
Asia region 54,937 19,265 185% 12,241 4,377 180%
- --------------------------------------------------------------------------------------------------------------------------
Others and intercompany eliminations (244,582) (260,386) (6%) (64,056) (70,666) (9%)
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 2,538,260 2,108,028 20% 581,752 508,524 14%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 9
US dollar translation methodology, and other important disclosures.
Operating Summary per Country [LOGO OMITTED]
================================================================================
As a percentage of net sales
January - December Fourth quarter
------------------------- ----------------------
OPERATING INCOME MARGIN 2004 2003 2004 2003
- -----------------------------------------------------------------------------------------------------
Mexico 37.9% 38.9% 33.7% 35.8%
U.S.A. 15.5% 12.8% 17.4% 13.3%
Spain 24.4% 21.4% 23.5% 19.6%
Venezuela 31.3% 32.4% 28.5% 31.4%
Colombia 45.6% 40.4% 39.8% 43.6%
Egypt 30.2% 21.6% 26.1% 22.2%
Central America & the Caribbean region 22.5% 17.3% 15.6% 17.7%
Asia region 14.6% (6.3%) 14.0% (6.9%)
- -----------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 22.7% 20.3% 20.7% 19.1%
- -----------------------------------------------------------------------------------------------------
EBITDA MARGIN
- -----------------------------------------------------------------------------------------------------
Mexico 43.3% 44.4% 39.1% 41.4%
U.S.A. 23.6% 21.5% 25.8% 22.3%
Spain 30.8% 28.4% 29.9% 28.6%
Venezuela 45.1% 47.9% 43.0% 45.5%
Colombia 57.8% 59.7% 52.0% 59.7%
Egypt 45.7% 43.7% 40.6% 41.4%
Central America & the Caribbean region 28.2% 23.8% 22.2% 24.8%
Asia region 27.3% 10.3% 24.7% 9.7%
- -----------------------------------------------------------------------------------------------------
CONSOLIDATED MARGIN 31.1% 29.4% 29.1% 28.5%
- -----------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 10
US dollar translation methodology, and other important disclosures.
Volume Summary [LOGO OMITTED]
================================================================================
Consolidated volume summary
Cement: Thousands of metric tons
Ready-mix: Thousands of cubic meters
January - December Fourth quarter
------------------ -------------------
2004 2003 % Var. 2004 2003 % Var.
- --------------------------------------------------------------------------------------------------------------------
Consolidated cement volume 65,758 64,650 2% 16,266 16,273 0%
Consolidated ready-mix volume 23,893 21,669 10% 5,993 5,460 10%
- --------------------------------------------------------------------------------------------------------------------
Per-country volume summary
January - December Fourth quarter
------------------ -------------- Fourth quarter 2004 Vs.
DOMESTIC CEMENT VOLUME 2004 Vs. 2003 2004 Vs. 2003 Third quarter 2004
- --------------------------------------------------------------------------------------------------------------------
Mexico 2% 0% 0%
U.S.A. 9% 5% (14%)
Spain 3% 5% (4%)
Venezuela 20% 9% 6%
Colombia 8% 9% 4%
Egypt (6%) (8%) (13%)
Central America & the Caribbean region 0% 3% (6%)
Asia Region (4%) (5%) (6%)
- --------------------------------------------------------------------------------------------------------------------
READY-MIX VOLUME
- --------------------------------------------------------------------------------------------------------------------
Mexico 16% 22% 3%
U.S.A. 8% 2% (9%)
Spain 2% 6% (4%)
Venezuela 13% (1%) (11%)
Colombia 13% (5%) (12%)
Central America & the Caribbean region (1%) 5% (8%)
Asia Region N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------
EXPORT CEMENT VOLUME
- --------------------------------------------------------------------------------------------------------------------
Mexico 37% 82% 4%
Spain (23%) (20%) (2%)
Venezuela 26% 27% 3%
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 11
US dollar translation methodology, and other important disclosures.
Price Summary [LOGO OMITTED]
================================================================================
US Dollars
January - December Fourth quarter
------------------ -------------- Fourth quarter 2004 Vs.
DOMESTIC CEMENT VOLUME 2004 Vs. 2003 2004 Vs. 2003 Third quarter 2004
- --------------------------------------------------------------------------------------------------------------------
Mexico (3%) (1%) (1%)
U.S.A. 5% 11% 3%
Spain 13% 14% 8%
Venezuela (9%) (10%) 0%
Colombia 1% (6%) (13%)
Egypt 28% 22% 3%
Central America & the Caribbean region (2) 7% 3% (3%)
Asia Region (2) 21% 16% 3%
- --------------------------------------------------------------------------------------------------------------------
READY-MIX PRICE
- --------------------------------------------------------------------------------------------------------------------
Mexico (1%) 3% 2%
U.S.A. 11% 22% 7%
Spain 14% 15% 11%
Venezuela 1% 6% 7%
Colombia 19% 21% 4%
Central America & the Caribbean region (2) 5% 5% 1%
- --------------------------------------------------------------------------------------------------------------------
Local Currency
January - December Fourth quarter
------------------ -------------- Fourth quarter 2004 Vs.
DOMESTIC CEMENT VOLUME 2004 Vs. 2003 2004 Vs. 2003 Third quarter 2004
- --------------------------------------------------------------------------------------------------------------------
Mexico (1) (3%) (5%) (4%)
U.S.A. 5% 11% 3%
Spain 3% 4% (0%)
Venezuela (1) (12%) (10%) (3%)
Colombia (8%) (18%) (16%)
Egypt 32% 23% 3%
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) (1%) (1%) (1%)
U.S.A. 11% 22% 7%
Spain 5% 5% 3%
Venezuela (1) (2%) 6% 4%
Colombia 8% 6% (1%)
Central America & the Caribbean 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 December 31, 2004.
2) Volume weighted-average price.
- --------------------------------------------------------------------------------
Please refer to the end of this report for definitions of terms, Page 12
US dollar translation methodology, and other important disclosures.
Definition of Terms and Disclosures [LOGO OMITTED]
================================================================================
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, US 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 MXN/US$
exchange rate for each quarter. The exchange rates used to convert results for
fourth quarter 2004, third quarter 2004, and fourth quarter 2003 are 11.14,
11.38, and 11.24 Mexican pesos per US dollar, respectively. CEMEX's
weighted-average inflation factor between December 31, 2003, and December 31,
2004, was 6.24%.
Per-country figures are presented in US dollars for the reader's convenience.
In the consolidation process, each country's figures (except those of CEMEX
Mexico) are converted to US dollars and then to Mexican pesos under Mexican
GAAP. Each country's figures presented in US dollars as of December 31, 2004,
and December 31, 2003, can be converted into its original local currency
amount by multiplying the US-dollar figure by the corresponding exchange rate
provided below.
To convert December 31, 2003, US-dollar figures for Mexico and Venezuela to
constant Mexican pesos and bolivars, respectively, as of December 31, 2004, it
is necessary to first convert the December 31, 2003, US-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.
December 31
-----------------
Exchange rate 2004 2003 Inflation-rate factor
- -------------------------------------------------------------------------
Mexico 11.14 11.24 3.054
Spain 0.74 0.79
Venezuela 1,920 1,600 1,192
Colombia 2,390 2,778
Egypt 6.10 6.18
- -------------------------------------------------------------------------
Amounts provided in units of local currency per US dollar.
The Central America and 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 items (net other expenses less non-operating asset disposals).
Capital expenditures consist of maintenance and 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.
Equity obligations for the year 2003 equaled the outstanding US$650 million 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 during 2004.
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 339.2 million for fourth quarter 2004, 332.9 for full year 2004, 323.9
million for fourth quarter 2003, and 315.2 million for full year 2003.
- --------------------------------------------------------------------------------
Page 13
