Cemex 1997 Annual Report Download - page 47

41
Footnotes to Selected Consolidated Financial Information
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(1) Cost of sales includes depreciation.
(2) Comprehensive financing income (cost) includes
financial expense, financial income, gains (loss-
es) on marketable securities, net foreign
exchange variation and net monetary position
result.
(3) In July 1995, a CEMEX subsidiary entered into a
transaction pursuant to which it transferred a
portion of the common stock of Valenciana in
exchange for Ptas. 40 billion, which as of
December 31, 1997 represented 24.8% of such
stock. This original amount was refinanced in
August 1997 at US$320 million, and, since
that date, the minority interest in the income
statement has not been recognized, since
CEMEX, through its subsidiary, has retained div-
idend and voting rights over such shares and
has the option to acquire them in 3 tranches,
the last of which matures in August 2000. The
company includes the cost of retaining its option
in the financial expense account. Such shares
are being treated as owned by a third party,
thereby creating a minority interest over the
consolidated stockholders’ equity in Valenciana.
As of December 31, 1997, such shares account
for 43% and 39% of total minority net income
and CEMEX’ minority stockholders’ equity,
respectively.
(4) On April 28, 1994, CEMEX declared a stock
split of 3 shares per each share held by a share-
holder. Additionally, as part of the transforma-
tion of CEMEX from a fixed to a variable capital
company, and an increase in the variable por-
tion of its capital stock, CEMEX issued a new
share of variable capital of like series for every
eight shares (after making the stock split effec-
tive). All share and per share amounts for 1987
through 1993 have been adjusted to make the
effect of the stock split retroactive.
(5) The number of shares outstanding represents
the total shares outstanding at the close of each
year, stated in millions of shares, and includes
the total number of shares issued by CEMEX
utilized in derivative transactions.
(6) For the periods ended on December 31, 1987 to
1995, the “Earnings Per Share” amount was
determined by considering the total outstanding
shares at the year’s end. For the periods ended
on December 31, 1996 and 1997, the
“Earnings Per Share” amount was determined
by considering the average number of shares
outstanding each year; i.e., 1.298 and 1.284
billion, respectively, so as to comply with the
provisions of Bulletin B-14 “Earnings Per
Share”, which have been in force since 1997.
(See Footnote No. 18 to the Financial
Statements.)
(7) Dividends declared at each year’s annual share-
holders’ meeting for each period are reflected as
dividends from the preceding year.
(8) As a result of CEMEX’ Share Repurchase
Program, as of December 31, 1997, 24 million
shares were acquired for an amount of approxi-
mately US$119 million. The shares acquired
through this program account for approximate-
ly 2% of the shares outstanding.
(9) Net working capital equals trade receivables
plus inventories minus trade payables.
(10) EBITD equals earnings before interest and taxes
plus depreciation.
(11) Net resources provided by operating activities
equals majority interest net income, plus line
items not affecting cash flow, plus variations in
working capital, excluding the effects of acqui-
sitions.