Cemex 1997 Annual Report Download - page 37

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31
Operating cash flow before lease payments and
cost of sales restatement (a non-monetary item),
grew 6% during the year and reached the amount
of $9.927 billion pesos. In dollar terms, operating
cash flow increased by 10% and reached US$1.230
billion.
Cash Earnings
Cash Earnings (Operating Cash Flow minus Net
Financial Expense) were $5.815 billion pesos; an
increase of 47% as compared to 1996. In dollar
terms, cash earnings were US$721 million, which
represents a 52% increase for the year.
Financial Expenses
Financial Expenses for 1997 were $4.116 billion
pesos (US$510 million). They showed a decrease of
27% as compared to the previous year. This decrease
was largely due to the more favorable interest rates
on the company’s loans, given the change to dollar-
denominated debt from other currencies.
Gains in Marketable Securities
Gains in Marketable Securities were $534 million
pesos in 1997, as a result of having recorded extraor-
dinary gains and the mark-to-market value of the
company’s shares portfolio.
Foreign Exchange Loss
Net Foreign Exchange Loss was $95 million pesos in
1997 versus $846 million pesos during the previous
year, given the bolivar’s 64% depreciation during
1996. During 1997, the Mexican peso depreciated by
2% vis-à-vis the US dollar.
Net Monetary Position Gain
Net Monetary Position Gain during the year was
$4.657 billion pesos, 54% less than was recorded for
1996 due to a lower inflation rate in Mexico, and the
utilization of the weighted average inflation method
by subsidiary in accordance with Mexican GAAP,
which was implemented at the beginning of 1997.
Other Expenses, Net
Other Expenses, Net were $1.110 billion pesos, 22%
lower than those incurred in 1996, because of the
cancellation of the tax provision recorded in 1996.
The cash amount of other expenses, net for 1997 was
$563 million pesos (US$70 million). The amortiza-
tion of goodwill and anti-dumping duties are repre-
sentative of the majority of these expenses.
CEMEX 2000
CEMEX has invested more than US$200
million over the last decade to imple-
ment and modernize its information tech-
nology infrastructure. In 1997, it
launched CEMEX 2000, a company-wide
initiative to obtain certification of year
2000 compliance not only for information
systems and applications, but also for the
entire business network.
Cash earnings
millions of dollars
(Operating cash flow minus net
financial expenses). Trailing 12
months for each period.
Consistent growth in cash earn-
ings is evidence that 1997 was a
year of consolidation for CEMEX.