Cemex 2007 Annual Report Download

Download and view the complete annual report

Please find the complete 2007 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

Table of contents

  • Page 1

  • Page 2
    ...and continuous improvement ï¬,exibility, efficiency, and discipline innovation and customer service Rinker acquisition selected consolidated financial information management discussion and analysis financial statements board of directors management team terms we use investor and media information

  • Page 3
    ... change, our commitment to teamwork and knowledge-sharing, our unceasing customer innovation, and our relentless drive for efficiency and continuous improvement. Through our shared efforts and beliefs, we look to create sustainable value and strengthen the CEMEX brand for all of today's stakeholders...

  • Page 4
    ... E performance results R E L i A B L E FINANCIAL HIGHLIGHTS In millions of US dollars1, except per-ADR data 2007 Net sales Operating income EBITDA Consolidated net income Earnings per ADR2 Free cash ï¬,ow after maintenance capital expenditures Total assets Net debt Stockholders' equity, majority...

  • Page 5
    ... the company's stock dividend program. JULY CEMEX acquires Rinker Group Limited, creating one of the largest and most profitable building materials companies in the world. This acquisition reinforces its strategy of investing across the industry's value chain. Beyond the company's significantly...

  • Page 6
    ...-ever in our history. The acquisition was a continuation of our strategy to evolve from a cement company to an integrated building materials producer. It considerably strengthened our presence across our industry's value chain, brought an important infusion of management talent, and produced signi...

  • Page 7
    ... year's post-merger integration process, we identified synergies of about US$400 million which we will capitalize from 2008 through 2009. In the United States, the acquisition allowed us to combine two highly complementary businesses, positioning us for future organic growth in the world's biggest...

  • Page 8
    ... of our business model. Over the past three years, with the integration of RMC and Rinker, we have significantly changed our global footprint, diversified geographically, and dramatically enhanced our vertical integration. As the largest ready-mix concrete company in the world, we can...

  • Page 9
    ... of profitable growth. As we extend our network, we integrate new talent across all levels of our organization. We invest in our employees' careers through continuing education initiatives and other training programs. Equally 7 Lorenzo H. Zambrano Chairman of the Board and Chief Executive Officer

  • Page 10
    CONCRETE is such an effective adhesive that it's virtually impossible to break its bond. CEMEX is similarly collaborative; its teams work closely together, developing ties that are difficult to sever. 8

  • Page 11
    ... our operations. For example, our special projects team shares expertise about new specialty products such as self-compacting concrete. This product is easier to work with than other types of concrete because it requires no labor to compress the concrete, increases efficiency, and cuts the cost of...

  • Page 12
    ... CEMEX Mexico's annual electricity needs. This is the second largest wind power project registered as a CDM (Clean Development Mechanism) under the Kyoto Protocol. We are also partnering with Vattenfall, a Swedish utility company, to develop a waste-to-energy plant in Germany. The facility will use...

  • Page 13
    ... developing waste-to-energy plant in Germany will fulfill 100 percent of our Rüdersdorf cement plant's electricity needs. 11 CONCRETE provides the needed support to make any structure resistant and long lasting. CEMEX has the same strength as its concrete; through strict discipline, the company...

  • Page 14
    ...bulk cement customers with a new inventory management system, which enables them to remotely monitor and automatically replenish their cement inventories within set levels. 12 Specialty products in UK percentage of total ready-mix concrete volumes 11.4 Our laboratories work to develop innovative...

  • Page 15
    CONCRETE, in addition to its strength, is versatile; it can take almost any shape. CEMEX is equally adaptable; our company is continually developing new and better products and services customers' demand. 13 80,000 In Colombia, our CEMEX Hogar program is designed to benefit 80,000 lower income ...

  • Page 16
    ... value creation L o n G - s T A n D i n G OUR ACQUISITION OF RINKER Our acquisition of Rinker Group Limited reinforces our strategy of investing across our industry's value chain. Beyond our significantly enhanced positions in the aggregates, ready-mix concrete, and concrete products businesses...

  • Page 17
    ... management expertise, integration skills, and global network. Rinker's significant presence in the aggregates and ready-mix concrete businesses will strengthen and further diversify our positions along the industry value chain. The transaction will not only significantly increase our aggregates...

  • Page 18
    ...05 0.60 Dividends per ADR BALANCE-SHEET INFORMATION Cash and temporary investments Net working capital Total assets Short...plant, and equipment, net Total liabilities Minority interest(5)(6)(7)(8) Majority interest Total stockholders' equity Book value per ADR(9)(10) OTHER FINANCIAL DATA Operating...

  • Page 19
    ...make the effect of the stock splits retroactive for the correspondent years. In order to comply with Mexico's accounting principles, in the Financial Statements these figures are presented on a per-share basis (see note 19 to the 2007 annual report's Financial Statements). 11. For the periods ended...

  • Page 20
    ... close to 67,000 employees worldwide. Today we are strategically positioned in the Americas, Europe, Africa, the Middle East, Asia, and Australia. Our operations network produces, distributes, and markets cement, ready-mix concrete, aggregates, and related building materials to customers in over 50...

  • Page 21
    ... disciplined investments in our existing businesses, which improve our margins and/or increase our production capacity; and 3) the longterm acquisition of new operations in our existing or new markets. Our potential for growth increases substantially when we look down the cement value chain. Today

  • Page 22
    ... Third, the acquisition leverages our management expertise, integration skills, and global operations network. The transaction considerably strengthens and further diversifies our positions in the aggregates and ready-mix concrete segments of the industry value chain. The company's strong presence...

  • Page 23
    ... and managerial processes required to integrate new operations into our corporate structure. Consequently, we were able to complete the core post-merger integration process of Rinker in less than six months. Alignment with investor interests Employee stock-ownership plan To better align our...

  • Page 24
    ... 31, 2007 CEMENT PRODUCTION CEMENT CAPACITY MILLION PLANTS METRIC TONS/YEAR CONTROLLED CEMENT PLANTS MINORITY PART. READY-MIX PLANTS AGGREGATES QUARRIES LAND DISTRIBUTION CENTERS MARINE TERMINALS Mexico United States1 Spain United Kingdom Rest of Europe2 South / Central America and Caribbean3...

  • Page 25
    ... of Rinker, higher cement, ready-mix, and aggregates volumes and better supply-demand dynamics in most of our markets. Cost of sales as a percentage of sales increased 2.8 percentage points, from 63.8% to 66.6%. The increase was driven mainly by higher energy, electricity, and transportation costs...

  • Page 26
    ... our productivity and operating efficiency. Mexico In 2007 our Mexican operations' net sales reached US$3.83 billion, a 5% increase compared with those in 2006, and EBITDA rose 1% to US$1.41 billion. Cement and ready-mix concrete volumes grew 4% and 8%, respectively, for the year. The main drivers...

  • Page 27
    ...substantial synergies during the post-merger integration of Rinker, which will further reduce our costs going forward. Spain Our net sales in Spain increased 15% to US$2.12 billion in 2007. EBITDA reached US$635 million, up 14% from that in 2006. Cement and ready-mix concrete volumes declined 5% and...

  • Page 28
    ... region. 4. Includes operations in Egypt, Israel, and the United Arab Emirates. 5. Includes operations in Bangladesh, China, Malaysia, the Philippines, Taiwan, and Thailand. 6. Includes assets in associated participation. 26 In France, our ready-mix concrete and aggregates volumes increased 5% and...

  • Page 29
    ... year. In Australia, our ready-mix concrete and aggregates volumes increased 5% and 7%, respectively, for the year. Construction growth in the commercial and public sectors drove demand. Our Philippine operations domestic cement volumes increased 12% for 2007. The main drivers of cement demand were...

  • Page 30
    ...Limited acquisition, to CRH plc, the Irelandbased international building materials group. CEMEX acquired Rinker in July 2007. As a condition of US regulatory approval, the US Department of Justice required CEMEX to sell 39 ready-mix concrete and aggregate facilities in Arizona and Florida. The value...

  • Page 31
    ...; 3 granite quarries and 1 aggregate distribution facility in Georgia; and 1 limestone quarry and 1 concrete plant in Virginia. CEMEX acquired all of these assets through its acquisition of Rinker Group Limited earlier this year. The historical shortage of building materials in Arizona and the...

  • Page 32
    ...the risk profile associated with changes in interest rates and foreign-exchange rates of debt agreements; reduce financing costs; and hedge highly probable forecasted transactions, net assets in foreign subsidiaries, and CEMEX's stock-option plans. Under Mexican FRS (Financial Reporting Standards...

  • Page 33
    31 Our portfolio of assets is concentrated in markets that provide sustainable growth throughout the economic cycle.

  • Page 34
    ...D A T E D financial statements 33 34 35 36 37 38 39 40 42 32 auditors report consolidated balance sheets consolidated income statements consolidated statements of changes in financial position balance sheets income statements statements of changes in financial position statements of changes in...

  • Page 35
    ...' report The Board of Directors and Stockholders CEMEX, S.A.B. de C. V.: We have audited the consolidated and the parent company-only balance sheets of CEMEX, S.A.B. de C.V. and CEMEX, S.A.B. de C.V. and subsidiaries as of December 31, 2007 and 2006 and the related consolidated and parent company...

  • Page 36
    ...balance sheets CEMEX, s.A.B. DE C.V. AnD sUBsiDiARiEs (MIllIoNS of CoNSTANT MEXICAN PESoS AS of DECEMBER 31, 2007) DECEMBER 31, 2007 Convenience translation (note 3A) Note 2007 2006 ASSETS CURRENT ASSETS Cash and investments Trade receivables less allowance for doubtful accounts Other accounts...

  • Page 37
    ... E D statements of income CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES (MIllIoNS of CoNSTANT MEXICAN PESoS AS of DECEMBER 31, 2007, EXCEPT foR EARNINgS PER ShARE) YEARS ENDED DECEMBER 31, 2007 Convenience translation (note 3A) Note 2007 2006 2005 Net sales Cost of sales Gross profit Administrative...

  • Page 38
    ...Pensions and other postretirement benefits Deferred income taxes Deferred employees' statutory profit sharing Equity in income of associates Minority interest Resources provided by operating activities Changes in working capital, excluding acquisition effects: Trade receivables, net Other accounts...

  • Page 39
    ...sheets CEMEX, S.A.B. DE C.V. (MIllIoNS of CoNSTANT MEXICAN PESoS AS of DECEMBER 31, 2007) DECEMBER 31, 2007 Convenience translation (note 25B) Note 25 2007 2006 ASSETS CURRENT ASSETS Other accounts receivable Related parties accounts receivable Total current assets NON-CURRENT ASSETS Investment...

  • Page 40
    ... MEXICAN PESoS AS of DECEMBER 31, 2007, EXCEPT foR EARNINgS PER ShARE) YEARS ENDED DECEMBER 31, 2007 Convenience translation (note 25B) Note 25 2007 2006 2005 Equity in income of subsidiaries and associates Rental income License fees Total revenues Administrative expenses Operating income...

  • Page 41
    ..., net Other accounts payable and accrued expenses Net change in working capital Net resources provided by (used in) operating activities FINANCING ACTIVITIES Proceeds from debt (repayments), net Dividends paid Issuance of common stock under stock dividend elections and stock option programs Other...

  • Page 42
    ... stock Additional paid-in capital Balance at December 31, 2004 Results from holding non-monetary assets Currency translation of foreign subsidiaries Hedge derivative financial instruments Deferred income tax in equity Net income Comprehensive income for the period Dividends ($0.25 pesos per share...

  • Page 43
    Other equity reserves Retained earnings Total majority interest Minority interest Total stockholders' equity (89,652) 2,611 (4,446) (1,607) 2,063 - (1,379) - - 149 - (90,882) (4,031) 3,331 148 (641) - (1,193) - - 983 (152) - (91,244) (13,910) 2,927 (117) (427) - (11,527) - - 44 (1,847) - (104,...

  • Page 44
    ... through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United Mexican States, or Mexico. CEMEX, S.A.B. de C.V. was...

  • Page 45
    ... through subsidiaries, more than 50% of their common stock and/or has control. Control exists when CEMEX has the power, directly or indirectly, to govern the administrative, financial and operating policies of an entity in order to obtain benefits from its activities. The financial statements of...

  • Page 46
    ... are valued using the lower between replacement cost and market value. Replacement cost is based upon the latest purchase price, the average price of the last purchases or the last production cost. The Company analyzes its inventory balances to determine if, as a result of internal events, such...

  • Page 47
    ... the net book value of the reporting unit. CEMEX determines the discounted amount of estimated future cash ï¬,ows over a period of 5 years. As of December 31, 2007, 2006 and 2005, the geographic segments reported by CEMEX (note 18), each integrated by multiple cash generating units, also represent...

  • Page 48
    ... (i) highly probable forecasted transactions, (ii) the Company's net assets in foreign subsidiaries, and (iii) executive stock option programs. CEMEX recognizes derivative financial instruments as assets or liabilities in the balance sheet at their estimated fair value, and the changes in such fair...

  • Page 49
    ... Obligations", CEMEX recognizes the costs associated with employees' benefits for: a) defined benefit pension plans; b) other postretirement benefits, basically comprised of health care benefits, life insurance and seniority premiums, granted pursuant to applicable law or by Company grant; and...

  • Page 50
    ..., and in which CEMEX has the unilateral option to defer interest payments or preferred dividends for indeterminate periods. 48 Q) REVENUE RECOGNITION CEMEX's consolidated net sales represent the value, before tax on sales, of products and services sold by consolidated subsidiaries as a result of...

  • Page 51
    ..., in which services received from employees are settled through the delivery of shares; or as liability instruments, in which the Company incurs a liability by committing to pay, in cash or other instruments, the intrinsic value of the option as of the exercise date. The cost of equity instruments...

  • Page 52
    ...CEMEX operates. For 2007, 2006 and 2005, no single customer individually accounted for a significant amount of the reported amounts of sales or in the balances of trade receivables. In addition, there is no significant concentration of a specific supplier relating to the purchase of raw materials...

  • Page 53
    ...2006, trade receivables exclude accounts for $12,325 (U.S.$1,129) and $12,731 (U.S.$1,166), respectively, that were sold to financial institutions under securitization programs for the sale of trade receivables, established in Mexico, the United States, Spain and France. Under these programs, CEMEX...

  • Page 54
    ...Book value at acquisition date Revaluation by equity method $ 4,624 5,975 $ 10,599 3,785 4,927 8,712 As of December 31, 2007 and 2006, CEMEX's main investments in associates are as follows: Activity Country % 2007 2006 52 Control Administrativo Mexicano, S.A. de C.V. Cement Australia Holdings...

  • Page 55
    ... 2007 Cost Accumulated amortization Carrying amount Cost 2006 Accumulated amortization Carrying amount Intangible assets of indefinite useful life: Goodwill $ 151,409 Extraction rights 10,156 Intangible assets of definite useful life: Extraction rights 14,378 Cost of internally developed software...

  • Page 56
    ... 1 2007 North America United States $ Mexico Europe Spain France United Kingdom Other Europe 2 Central and South America and the Caribbean Colombia Venezuela Dominican Republic Costa Rica Other Central and South America and the Caribbean 3 Africa and Middle East Egypt United Arab Emirates Asia...

  • Page 57
    ...in the development phase of the software and relate mainly to professional fees, direct labor and related travel expenses. In connection with Rinker acquisition in 2007, extraction permits in the aggregates and ready-mix concrete sectors in the United States and Australia were identified and valued...

  • Page 58
    ...debt. RMC, headquartered in the United Kingdom, was one of Europe's largest cement producers and one of the world's largest suppliers of ready-mix concrete and aggregates, with operations in 22 countries, primarily in Europe and the United States, and employed over 26,000 people. The assets acquired...

  • Page 59
    ... of CEMEX's future results. Pro forma adjustments consider the fair values of the net assets acquired, under assumptions that CEMEX considered reasonable. Year ended December 31, 2007 CEMEX 1 Rinker 2 Adjustments 3 CEMEX pro forma Sales Operating costs and expenses Operating income Other...

  • Page 60
    ...rates used in the impairment testing of those reporting units that represent a significant portion of the consolidated goodwill in 2007 and 2006: Discount rates Reporting units 2007 2006 Perpetual growth rates 2007 2006 United States Spain Mexico Colombia France United Arab Emirates United Kingdom...

  • Page 61
    ... fair values as of the acquisition date of July 1, 2007 and there were no significant changes in such values as of December 31, 2007. The main assumptions used in the impairment testing of CEMEX's other cash generating units, which account for the remaining portion of goodwill in 2007 and 2006, are...

  • Page 62
    ... are as follows: 10.92 111.53 0.6854 0.5034 10.80 119.05 0.7573 0.5105 2007 2006 Debt at beginning of year Proceeds from new credits Debt repayments Increase from business combinations Foreign currency translation and inï¬,ation effects Debt at end of year The maturities of consolidated long...

  • Page 63
    ...bps" means basis points. One basis point is .01 per cent. The rate that CEMEX pays in this instrument is limited to 4.9%. During 2007 and 2006, in order to modify the interest rate mix of CEMEX's debt portfolio, interest rate swaps were negotiated and settled for a net notional amount of U.S.$1,289...

  • Page 64
    ... the purchase of RMC, generating a gain of approximately U.S.$21 ($264), which was recognized in the Comprehensive Financing Result. Foreign exchange forward contracts related to debt During 2007 and 2006, in order to change the mix of currencies in its debt portfolio, CEMEX negotiated foreign...

  • Page 65
    ... pounds sterling. CEMEX negotiated foreign exchange forwards, collars and options, for a combined notional amount of U.S.$3,453. These contracts were designated as hedges of the foreign exchange risk associated with the firm commitment to purchase the RMC shares. Changes in the fair value of these...

  • Page 66
    ... effect of future interest rates, exchange rates, prices of natural gas and share prices according to the yield curves shown in the market as of the balance sheet date. These values should be viewed in relation to the fair values of the underlying transactions and as part of CEMEX's overall exposure...

  • Page 67
    ...of production sites at the end of their operation, which are initially recognized against the related assets and are depreciated over their estimated useful life. Other remediation and environmental liabilities include future estimated costs arising from legal or constructive obligations, related to...

  • Page 68
    ...restructuring event, are recognized in the income statement as employees' services are rendered, based on actuarial calculations of the benefits' present value. The net periodic costs of pension plans and other benefits in 2007, 2006 and 2005 are summarized as follows: Pensions 2007 2006 2005 2007...

  • Page 69
    ... used in the determination of the net periodic cost, agreed with external actuaries, are as follows: United States 2007 United Kingdom Other countries 1 United States 2006 United Kingdom Other countries 1 Mexico Mexico Discount rates Rate of return on plan assets Rate of salary increases...

  • Page 70
    ...in Mexico subject to pension benefits a new defined contribution pension plan, which, from the communication date, replaced the former defined benefit pension plan. CEMEX contributed to the employees' retirement individual accounts, with a private retirement funds manager, the actuarial value of...

  • Page 71
    ... income tax liability related to its investments in subsidiaries and associates, and interests in joint ventures, considering that CEMEX controls the reversal of the temporary differences arising from these investments. C) EFFECTIVE TAX RATE Differences between the financial reporting and the...

  • Page 72
    ...of shares, CPOs and other prices per share related to the annual ordinary stockholders' meeting held on April 27, 2006 were not adjusted to retroactively reï¬,ect the stock split of July 17, 2006. During 2007 and 2006, the CPOs issued pursuant the exercise of options under the "fixed program" (note...

  • Page 73
    ... exchange ï¬,uctuations from financing related to the acquisition of foreign subsidiaries generated by CEMEX's subsidiary in Spain, representing a loss of $12 in 2005. There were no exchange ï¬,uctuations capitalized by this subsidiary during 2006. In 2007, Rinker's acquisition generated a gain of...

  • Page 74
    ..., CEMEX granted to a group of executives several types of stock options. Starting in 2005, stock option programs were replaced by a long-term compensation scheme through which such executives receive cash bonuses, recognized in the operating results, which are used by the executives to acquire CPOs...

  • Page 75
    ... which increases stockholders' equity and the number of shares outstanding. The amounts of these ADS programs are presented in terms of equivalent CPOs (ten CPOs represent one ADS). Other programs As of December 31, 2007 and 2006, CEMEX's subsidiary in Ireland has an outstanding stock option program...

  • Page 76
    ... ready-mix concrete operations in Jamaica and Argentina and, in 2006, the segment also includes a cement-grinding mill in Guatemala. Likewise, the segment "Rest of Africa and Middle East" includes the operations in the United Arab Emirates and Israel. In 2007, the segment "Australia" includes Rinker...

  • Page 77
    ... Operating cash ï¬,ow 2006 North America Mexico $ United States Europe Spain United Kingdom Rest of Europe Central and South America and the Caribbean Venezuela Colombia Rest of Central and South America and the Caribbean Africa and Middle East Egypt Rest of Africa and Middle East Asia Philippines...

  • Page 78
    ... 31, 2006 Total assets 76 North America Mexico $ United States Europe Spain United Kingdom Rest of Europe Central and South America and the Caribbean Venezuela Colombia Rest of Central and South America and the Caribbean Africa and Middle East Egypt Rest of Africa and Middle East Asia Philippines...

  • Page 79
    ...follows: 2007 Cement Concrete Aggregates Others Eliminations Net sales North America Mexico $ United States Europe Spain United Kingdom Rest of Europe Central and South America and the Caribbean Venezuela Colombia Rest of Central and South America and the Caribbean Africa and Middle East Egypt Rest...

  • Page 80
    ..., Ready Mix USA will have the right, but not the obligation, to sell to CEMEX its interest in both entities at a predetermined price based on the greater of: a) eight times the operating cashï¬,ow of the trailing twelve months, b) the average of the 36 previous months, or c) the net book value. As...

  • Page 81
    ... between the rate CEMEX pays and the rate received under such contracts. In the determination of the future estimated cash ï¬,ows, CEMEX used the interest rates applicable under such contracts as of December 31, 2007 and 2006. Amounts relating to planned funding of pensions and other postretirement...

  • Page 82
    ... ton starting in December 2004 and to U.S.$26.3 per ton in 2005. Through these years, CEMEX has used all available legal resources to revoke the order from the United States International Trade Commission. In January 2006, officials from the Mexican and the United States governments announced that...

  • Page 83
    ... before resolution. Rinker Materials, one of CEMEX's subsidiaries in the United States, is the beneficiary of two of ten federal quarrying permits granted for the Lake Belt area in South Florida, which cover one of CEMEX's largest aggregate quarries in that region. On March 22, 2006, a judge of...

  • Page 84
    ... statements. These balances with related parties result primarily from: (i) the sale and purchase of cement, clinker and other raw materials to and from group entities; (ii) the sale and/or acquisition of subsidiaries' shares within the CEMEX group; (iii) the invoicing of administrative services...

  • Page 85
    ... Mexico Spain Venezuela United States of America Costa Rica Egypt Colombia Panama Dominican Republic Puerto Rico France Australia Singapore Philippines Philippines Thailand United Kingdom United Kingdom Germany Austria Croatia Czech Republic Poland Hungary Ireland Israel Latvia United Arab Emirates...

  • Page 86
    ... number of the European Union countries. Except for per share data and as otherwise noted, all amounts in such currencies are stated in millions. The same accounting policies listed in note 3 to CEMEX's consolidated financial statements were applied, as applicable, in the preparation of the Parent...

  • Page 87
    ...545 4,514 $ $ G. OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES Other accounts payable and accrued expenses of the Parent Company as of December 31, 2007 and 2006 consist of: 2007 2006 Other accounts payable, accrued expenses and interest payable Tax payable Dividends payable Valuation of derivative...

  • Page 88
    ...147) (906) 1,717 - Balances and transactions of the Parent Company with related parties result primarily from: (i) the sale and/or acquisition of subsidiaries' shares within the CEMEX group; (ii) the invoicing of administrative services, rentals, trademarks and commercial name rights, royalties and...

  • Page 89
    ... permitted, which in some cases may be compensated by the lower IETU rate than IT rate. CEMEX considers that at least for the first two years, in most of its Mexican operations, the Company will continue to incurre IT. The income tax law in Mexico provides that companies must pay the greater of IT...

  • Page 90
    .... In the event that present conditions change, and it is determined that future operations would not generate enough taxable income, or that tax strategies are no longer viable, the valuation allowance would be increased and reï¬,ected in the income statement. The Parent Company does not recognize...

  • Page 91
    ... Parent Company pays and the rate received under such contracts. In the determination of future estimated cash ï¬,ows, the Parent Company used the interest rates applicable under such contracts as of December 31, 2007 and 2006. O. TAX ASSESSMENTS AND LEGAL PROCEEDINGS On April 3, 2007, the Mexican...

  • Page 92
    ... the Board ALTERNATE DIRECTORS Jorge García Segovia Eduardo Brittingham Sumner Luis Santos de la Garza Fernando Ruiz Arredondo Independent member Independent member Independent member SECRETARY 90 Ramiro Villarreal Morales (not a member of the board) AUDIT COMMITTEE Roberto Zambrano Villarreal...

  • Page 93
    ...is currently responsible for CEMEX Europe, Middle East, Africa, Asia, and Australia. 91 JUAN ROMERO (50) President of the South America & Caribbean Region Mr. Romero graduated from Universidad de Comillas, Spain, where he studied Law and Economic and Enterprise Sciences. He joined CEMEX in 1989 and...

  • Page 94
    ... listed on the Mexican Stock Exchange. Return on capital employed (ROCE) equals operating income minus taxes and profit sharing, divided by the sum of average net debt and consolidated stockholders' equity. Aggregates are sand and gravel, which are mined from quarries. They give ready-mix concrete...

  • Page 95
    ...) Mexico New York Stock Exchange (NYSE) United States BMV TICKER SYMBOL CEMEX CPO MEDIA RELATIONS CONTACT [email protected] Phone: (52-81) 8888-4334 Fax: (52-81) 8888-4417 SHARE SERIES CPO (representing two A shares and one B share) ADR (representing ten CPOs) NYSE TICKER SYMBOL CX INVESTOR RELATIONS...

  • Page 96
    www.cemex.com Building the futureTM