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Building
a better
future
2015 ANNUAL REPORT

Table of contents

  • Page 1
    Building a better future 2015 ANNUAL REPORT

  • Page 2
    ... in which we live and work. That's why we work hard to develop and deliver the best construction products and solutions to satisfy our customers' and society's growing needs. By transforming ideas into reality, we build the homes people live in, the roads that connect them, and the infrastructure...

  • Page 3
    ... letter to you a year ago, we told you that our strategy is focused on leveraging our global portfolio of integrated cement, aggregates, and ready-mix concrete assets, developing the inherent power of our CEMEX delivered strong underlying operational and financial results, despite a challenging...

  • Page 4
    ... needs of our customers; Grow the Pie to increase the market penetration of our products; Cement Operations and Supply Chain to improve productivity and to realize the operating leverage inherent in our business portfolio; Ready-Mix and Aggregates to guarantee that the operating knowledge and skills...

  • Page 5
    ... defined as delivering increasing value to our shareholders well into the future. Rogelio Zambrano Chairman of the Board Fernando A. González Chief Executive Officer Our long-term strategy rests on two main value creation drivers: maximizing EBITDA growth and improving our capital structure. 4

  • Page 6
    ... at the end of each year using the end-of-year exchange rate of 17.23 MXN/US$ and 14.74 MXN/US$, respectively. 2 Based on an average of 1,353 and 1,256 million American Depositary Shares (ADSs) for 2015 and 2014, respectively. 3 2015, 2014, 2013, 2012, 2011, and 2010 figures are under IFRS, refer...

  • Page 7
    Differentiated, leading-edge innovation Offer our customers superior performing building products Integral solutions Address our clients' complex, evolving construction needs

  • Page 8
    Industry forefront Integrate digital technologies into our service and business offerings Speed, continuous improvement Benefit our customers' business

  • Page 9
    ... of the art. Led by CEMEX Research Group in Switzerland, our team of experts works in close collaboration In Germany, we are participating in the construction of the new Uferkrone seven-building residential complex. With My CEMEX, a new mobile application, our customers will enjoy the ability to...

  • Page 10
    ... extreme conditions (e.g., wind, heat, direct sunlight) through sealing, water-retention, and low-shrinkage mechanisms During 2015, our value-added products accounted for approximately 40% of our total consolidated ready-mix concrete sales. A 100% concrete solution for thermal insulation, acoustic...

  • Page 11
    Superior products Perform at the highest standards across all applications Talented, energetic teams Passionate about our construction materials, their applications, and our customers' success

  • Page 12
    Wide, solid, growing market reach Serve our customers accurately, consistently, and rapidly Transparent, responsive actions Ensure our customers' satisfaction

  • Page 13
    ... HOW TO WIN The products, services, and solutions to provide for each customer and channel set Our Smart Delivery Truck (SDT) solution increases the efficiency, health and safety, and management of our transportation ï¬,eet across the countries where we operate. Our logistical skills enabled us...

  • Page 14
    ...building, 7,070 cubic meters of ready-mix concrete were poured continuously at a rate of 270 cubic meters per hour. Taking advantage of our expertise and operational capacity, we undertook an exceptional logistical effort, involving 340 employees, seven ready-mix concrete plants, 98 revolving trucks...

  • Page 15
    Global muscle, local touch Identify and replicate the world's best practices to deliver greater value Transparent, open relationships Generate trust across every business in which we engage

  • Page 16
    Tomorrow's leaders today Recruit, develop, and propel the best talent globally Proactive, collaborative partners Build strategic relationships around the world to deliver the best solutions

  • Page 17
    ... improvement of our supply chain, identifies better Close to 29,000 employees responded to our "Voices Into Action" 2015 Engagement Survey-a 75% response rate. The survey collects input on a number of topics including development, compensation, leadership communication, and work-life balance. 16

  • Page 18
    ... best practices to deliver greater value. After first being put into practice in Mexico and Egypt, we installed CEMEX LINK, our ready-mix web-based management tool, in the Dominican Republic during 2015. Thanks to this shared knowledge transfer, our Dominican ready-mix team is reaping the benefits...

  • Page 19
    Industry leading Use of alternative energy and management of natural resources Sustainable solutions Address the world's sustainability challenges

  • Page 20
    Community development Build key infrastructure and develop shared value initiatives Health and safety Possess our industry's highest standards

  • Page 21
    ...-mix revenues. To preserve precious reserves, reduce construction waste, and lower transport costs, we are increasing our use of recycled concrete aggregates, especially in urban areas where the supply of natural aggregates is limited. For example, the new research and laboratory building for life...

  • Page 22
    ... up to 200,000 metric tons of alternative fuel annually for our Rugby cement plant. Overall, in 2015, alternative fuels represented 26.6% of our total fuel mix, yielding annual savings of more than US$100 million. At year-end, 92% of our cement plants burned alternative fuels, avoiding the use of...

  • Page 23
    ...-private partnerships involving local governments, non-profit organizations, and universities, these programs are designed to improve access to safe and affordable housing for low-income families by offering savings and credit support, training, and technical assistance to construct their own homes...

  • Page 24
    ...-term debt & other financial obligations (12) Total liabilities Non-controlling interest and perpetual debentures Total controlling interest Total stockholders' equity Book value per ADS (6,7) (5) 1,252 6,290 15,193 1,920 12,859 14,779 17.55 Other financial data Operating margin Operating EBITDA...

  • Page 25
    ... International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. Accordingly, CEMEX's consolidated financial statements as of December 31, 2015, 2014, 2013, 2012, 2011 and 2010 and for the years ended December 31, 2015, 2014, 2013, 2012, 2011 and 2010...

  • Page 26
    ..., and markets cement, ready-mix concrete, aggregates, and related building materials to customers in over 50 countries, and we maintain trade relationships in over 100 nations. Business Strategy To achieve our mission, our strategy is to create value by building and managing a global portfolio of...

  • Page 27
    ... do best: our core cement, aggregates, ready-mix concrete, and related businesses. By managing our core operations as one vertically integrated business, we not only capture a greater portion of the cement value chain, but also get closer to our customers by offering comprehensive building solutions...

  • Page 28
    ...May 2015, we entered into a series of private agreements with certain institutional investors to exchange approximately US$626 We increase our use of alternative fuels and raw materials, improve our energy efficiency, and contract renewable power where feasible. Financial Position One of our main...

  • Page 29
    ... began offering executives a new stock-ownership program in 2005. The plan moves our company's long-term incentives from stock option grants to restricted stock awards. As of December 31, 2015, our executives held 30,056,793 restricted CPOs, representing 0.2% of our total CPOs outstanding. Corporate...

  • Page 30
    ...ongoing operations and for foreign exchange fluctuations compared with 2014, consolidated net sales increased 5% for the year. The increase on a like-to-like basis was the result of higher prices of our products, in local currency terms, in most of our operations, as well as higher volumes in Mexico...

  • Page 31
    ... 31, 2015 Capacity per region 7 Cement production capacity (million metric tons/year) Cement plants (controlled) Cement plants (minority part.) Ready-mix plants Aggregates quarries Land distribution centers Marine terminals as of December 31, 2015 l Cement 46% l Ready-mix 39% l Aggregates 15...

  • Page 32
    ...the year. Our slower-than-industry growth in cement and ready-mix concrete volumes reflects the implementation of our pricing strategy. Our cement and ready-mix prices in local-currency terms increased by 10% and 7%, respectively, during 2015. The industrial-and-commercial sector was the main driver...

  • Page 33
    ... regional operations' ready-mix concrete volumes increased 5%, while our domestic gray cement and aggregates volumes decreased 2% and 4%, respectively, for the year. On a like-to- Health Sciences Building, Granada University, Spain South/Central America and Caribbean In 2015, our net sales in the...

  • Page 34
    ... operations' domestic gray cement, ready-mix concrete, and aggregates volumes declined 9%, 3%, and 6%, respectively, in 2015. While national cement volumes increased during the year, the decline in our cement volumes mainly reflected a high comparable base in 2014, as well as our pricing strategy...

  • Page 35
    ...Lozano Chairman of the Board Fernando A. González Olivieri Tomás Milmo Santos Ian Christian Armstrong Zambrano Independent Directors Armando J. García ... Sostmann Francisco Javier Fernández Carbajal Corporate Practices and Finance Committee Dionisio Garza Medina President Francisco Javier Fern...

  • Page 36
    ... several senior management positions, including President of major operations in South America, Europe, Middle East, Africa and Asia. He also led several corporate areas including Finance, Planning, Administration and Human Resources. He was appointed Chief Executive Officer in 2014. Fernando holds...

  • Page 37
    ... and after holding management positions in the Strategic Planning area, he headed CEMEX operations in Egypt, Spain, Western Europe, and more recently, Northern Europe. He is currently President of CEMEX USA, and is also responsible for the company's global Health & Safety, Energy, and Sustainability...

  • Page 38
    ... of Legal and Secretary of the Board of Directors Jaime Muguiro joined CEMEX in 1996, and held several executive positions in the areas of Strategic Planning, Business Development, Ready-Mix Concrete, Aggregates, and Human Resources. He headed CEMEX operations in Egypt, and more recently our...

  • Page 39
    ... financial statements CEMEX, S.A.B. de C.V and subsidiaries 39 Independent auditor's report 40 Consolidated statements of operations 41 Consolidated statements of comprehensive income (loss) 42 Consolidated balance sheets 43 Consolidated statements of cash ï¬,ows 44 Statements of changes in...

  • Page 40
    ... financial statements of CEMEX, S.A.B. de C.V. and its subsidiaries ("the Company"), which comprise the consolidated balance sheets as at December 31, 2015 and 2014, the consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the years...

  • Page 41
    ...546) (6,162) (9,708) 97 (9,611) 1,223 (10,834) (0.28) (0.29) (0.28) (0.29) Consolidated statements of operations CEMEX, S.A.B. de C.V. and subsidiaries (Millions of Mexican pesos, except for earnings (loss) per share) The accompanying notes are part of these consolidated financial statements. 40

  • Page 42
    ...133 YEARS ENDED DECEMBER 31, 2014 2013 (5,680) (9,611) Consolidated statements of comprehensive income (loss) CEMEX, S.A.B. de C.V. and subsidiaries (Millions of Mexican pesos) Items that will not be reclassified subsequently to profit or loss Actuarial losses Income tax recognized directly in...

  • Page 43
    ... of long-term debt Other financial obligations Trade payables Income tax payable Other accounts payable and accrued expenses Liabilities from operations held for sale Total current liabilities NON-CURRENT LIABILITIES Long-term debt Other financial obligations Employee benefits Deferred income...

  • Page 44
    ... income taxes: Trade receivables, net Other accounts receivable and other assets Inventories Trade payables Other accounts payable and accrued expenses Changes in working capital, excluding income taxes The accompanying notes are part of these consolidated financial statements. 2015 $ $ 2,133...

  • Page 45
    ... controlling interest Non-controlling interest Total stockholders' equity Statements of changes in stockholders' equity CEMEX, S.A.B. de C.V. and subsidiaries (Millions of Mexican pesos) Balance as of December 31, 2012 Net loss Total other items of comprehensive loss Change in the Parent Company...

  • Page 46
    ... to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. In addition, in order to facilitate the acquisition of financing and to run its operations in Mexico more efficiently considering...

  • Page 47
    ... for $712, related to CEMEX´s joint arrangement in Concrete Supply Co., LLC (note 13A); and • In 2013, the decrease in other non-current liabilities and the increase in other equity reserves as a result of the change in the functional currency of the Parent Company's financial division as of...

  • Page 48
    .... The financial statements of foreign subsidiaries, as determined using their respective functional currency, are translated to pesos at the closing exchange rate for balance sheet accounts and at the closing exchange rates of each month within the period for statements of operations accounts. The...

  • Page 49
    ... average exchange rates for balance sheet accounts and statement of operations accounts as of December 31, 2015, 2014 and 2013, were as follows: 2015 Currency Closing Average Closing 2014 Average Closing 2013 Average Dollar Euro British Pound Sterling Colombian Peso Egyptian Pound Philippine Peso...

  • Page 50
    ... net. " Investments in financial instruments held for trading, as well as those investments available for sale, are recognized at their estimated fair value, in the first case through the statements of operations as part of "Other financial (expense) income, net" , and in the second case, changes in...

  • Page 51
    ... option is accounted for as a derivative financial instrument at fair value in the statement of operations. Derivative financial instruments (note 16D) CEMEX recognizes all derivative instruments as assets or liabilities in the balance sheet at their estimated fair values, and the changes in such...

  • Page 52
    ... inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. CEMEX analyzes its inventory balances to determine if, as a result of internal events, such as physical damage, or external events, such as technological changes or market...

  • Page 53
    ... statements Administrative buildings Industrial buildings Machinery and equipment in plant Ready-mix trucks and motor vehicles Office equipment and other assets 34 32 18 7 6 CEMEX capitalizes, as part of the related cost of fixed assets, interest expense from existing debt during the construction...

  • Page 54
    ... useful life of the asset. In order to obtain discounted cash flows attributable to each intangible asset, such revenues are adjusted for operating expenses, changes in working capital and other expenditures, as applicable, and discounted to net present value using the risk adjusted discount rate of...

  • Page 55
    ... the estimation of future prices of CEMEX's products, the development of operating expenses, local and international economic trends in the construction industry, the long-term growth expectations in the different markets, as well as the discount rates and the growth rates in perpetuity applied. For...

  • Page 56
    .... The increase to the assets' book value is depreciated during its remaining useful life. The increase in the liability related to adjustments to net present value by the passage of time is charged to the line item "Other financial (expense) income, net. " Adjustments to the liability for changes in...

  • Page 57
    ... benefit pension plans; and b) other postretirement benefits, basically comprised of health care benefits, life insurance and seniority premiums, granted by CEMEX and/or pursuant to applicable law, are recognized as services are rendered, based on actuarial estimations of the benefits' present value...

  • Page 58
    ... the applicable income tax rates of each country where CEMEX operates. For the years ended December 31, 2015, 2014 and 2013, the statutory tax rates in CEMEX's main operations were as follows: Country 2015 2014 2013 Mexico United States United Kingdom France Germany Spain Philippines Colombia Egypt...

  • Page 59
    ...the translation of foreign subsidiaries' financial statements, net of: a) exchange results from foreign currency debt directly related to the acquisition of foreign subsidiaries; and b) exchange results from foreign currency related parties balances that are of a long-term investment nature (note 2D...

  • Page 60
    ... involved in production, expenses related to storage in production plants and freight expenses of raw material in plants and delivery expenses of CEMEX's ready-mix concrete business. Cost of sales excludes expenses related to personnel, equipment and services involved in sale activities and storage...

  • Page 61
    ...geographic concentration within the countries in which CEMEX operates. As of and for the years ended December 31, 2015, 2014 and 2013, 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...

  • Page 62
    ... CEMEX started to evaluate the impact that IFRS 15 will have on the recognition of revenue from its contracts with customers. Preliminarily, due to the nature of its business, main transactions and current accounting policies, whereas the transaction price is allocated to goods delivered or services...

  • Page 63
    ...of the change of control date. The operations in Croatia, including assets in Bosnia and Herzegovina, Montenegro and Serbia, mainly consist of three cement plants with aggregate annual production capacity of approximately 2.4 million tons of cement, two aggregates quarries and seven ready-mix plants...

  • Page 64
    ... 31, 2015 and the years ended December 31, 2014 and 2013, as well as of CEMEX's operations in Croatia, including assets in Bosnia and Herzegovina, Montenegro and Serbia, for the years ended December 31, 2015, 2014 and 2013: 2015 2014 2013 Notes to the consolidated financial statements Sales Cost...

  • Page 65
    ... and sale of cement, ready-mix concrete, aggregates and other construction materials, the allocation of resources and the review of their performance and operating results. All regional presidents report directly to CEMEX's Chief Executive Officer ("CEO"). The country manager, who is one level below...

  • Page 66
    ..., net Other expenses, net Other financing items, net 2015 Net sales Operating EBITDA Financial Expense Mexico United States Northern Europe United Kingdom Germany France Rest of Northern Europe Mediterranean Spain Egypt Rest of Mediterranean South, Central America and the Caribbean ("SAC...

  • Page 67
    ... (39) 2,495 Other financing items, net 5,912 2,263 13,533 225,299 5,673 $ 230,972 Net sales (including related parties) 2013 Net sales Operating EBITDA Financial Expense Mexico United States Northern Europe United Kingdom Germany France Rest of Northern Europe Mediterranean Spain Egypt Rest of...

  • Page 68
    ...nancial statements Mexico United States Northern Europe United Kingdom Germany France Rest of Northern Europe Mediterranean Spain Egypt Rest of Mediterranean South, Central America and the Caribbean ("SAC") Colombia Rest of SAC Asia Philippines Rest of Asia Others Continuing operations Discontinued...

  • Page 69
    ... the years ended December 31, 2015, 2014 and 2013 were as follows: 2015 Cement Concrete Aggregates Others Eliminations Net sales Notes to the consolidated financial statements Mexico United States Northern Europe United Kingdom Germany France Rest of Northern Europe Mediterranean Spain Egypt Rest...

  • Page 70
    2013 Cement Concrete Aggregates Others Eliminations Net sales Notes to the consolidated financial statements Mexico United States Northern Europe United Kingdom Germany France Rest of Northern Europe Mediterranean Spain Egypt Rest of Mediterranean South, Central America and the Caribbean ("...

  • Page 71
    ...representing the amounts recognized within the line item of "Other financial obligations. " The discount granted to the acquirers of the trade accounts receivable is recorded as financial expense and amounted to approximately $249 (US$16) in 2015, $298 (US$22) in 2014 and $317 (US$25) in 2013. CEMEX...

  • Page 72
    ...-term portion of a restricted investment related to coupon payments under CEMEX's perpetual debentures (note 20D). 11) Inventories As of December 31, 2015 and 2014, the consolidated balance of inventories was summarized as follows: 2015 2014 Finished goods Work-in-process Raw materials Materials...

  • Page 73
    ... operating segment in 2015, 2014 and 2013 is detailed as follows: 2015 2014 2013 1 Mexico United States Northern Europe Mediterranean Corporate and others $ $ 330 92 51 289 (24) 738 242 4 58 16 (26) 294 (6) 91 113 18 16 232 Combined condensed balance sheet information of CEMEX's associates...

  • Page 74
    ... did not include the operations of Concrete Supply Company LLC, associate formed through the contribution of operating assets in September 2013 with the purpose of engaging in the production, sale and distribution of ready-mix concrete within North and South Carolina, United States for the three...

  • Page 75
    ... corporate buildings and related land sold to financial institutions during 2012 and 2011, which were leased back, without incurring any change in the carrying amount of such assets or gain or loss on the transactions. The aggregate carrying amount of these assets as of December 31, 2015 and 2014...

  • Page 76
    ... reduction of operations of cement and ready-mix concrete plants resulting from adjusting the supply to current demand conditions; and b) the transferring of installed capacity to more efficient plants, for the years ended December 31, 2015, 2014 and 2013, CEMEX adjusted the related fixed assets to...

  • Page 77
    ... in 2014 and $1,327 in 2013, and was recognized within operating costs and expenses. Goodwill Changes in consolidated goodwill in 2015, 2014 and 2013, were as follows: 2015 2014 2013 Balance at beginning of period Business combinations Reclassification to assets held for sale Disposals, net Foreign...

  • Page 78
    ...definite life Changes in intangible assets of definite life in 2015, 2014 and 2013, were as follows: 2015 Extraction rights Industrial property and trademarks Customer relations Mining projects Others 1 Total Notes to the consolidated financial statements Balance at beginning of period Business...

  • Page 79
    ... aggregates quarries and 79 ready-mix plants for approximately â,¬171 (US$207 or $3,047), while CEMEX maintained its operations in the north, east and south of the country; and c) in Spain, CEMEX acquired from Holcim one cement plant in the southern part of the country with a production capacity of...

  • Page 80
    ... statements In Germany, the operations of the net assets sold by CEMEX to Holcim were consolidated by CEMEX line-by-line for the years ended December 31, 2014 and 2013. Considering that this transaction did not represent the disposal of entire reportable operating segment, such as in the case...

  • Page 81
    ... December 31, 2015 and 2014, goodwill balances allocated by operating segment were as follows: 2015 2014 Notes to the consolidated financial statements United States Mexico Northern Europe United Kingdom France Czech Republic Mediterranean Spain United Arab Emirates Egypt SA&C Colombia Dominican...

  • Page 82
    ... of CGUs with the main goodwill balances were as follows: Discount rates Groups of CGUs 2015 2014 2013 2015 Growth rates 2014 2013 Notes to the consolidated financial statements United States Spain Mexico Colombia France United Arab Emirates United Kingdom Egypt Range of rates in other countries...

  • Page 83
    ... United States, such as the increases in ready-mix concrete volumes of approximately 13% in 2015, 2% in 2014 and 8% in 2013, and the increases in ready-mix concrete prices of approximately 5% in 2015, 8% in 2014 and 6% in 2013, which are key drivers for cement consumption and CEMEX's profitability...

  • Page 84
    ... 4.8% In 2015 and 2014, represents the weighted average interest rate of the related debt agreements. As of December 31, 2015 and 2014, CEMEX´s consolidated debt summarized by type of instrument, was as follow: 2015 Shortterm Longterm 2014 Shortterm Longterm Bank loans Loans in foreign countries...

  • Page 85
    ... to debt under CEMEX's Credit Agreement, which was increased in August 2015 with new funds from 21 financial institutions in order to fully repay the total amount outstanding under the Facilities Agreement. Additionally on September 21, 2015 the principal amount of the Credit Agreement was further...

  • Page 86
    ...xico, S.A. de C.V., New Sunward Holding, B.V., CEMEX España, S.A., CEMEX Asia, B.V., CEMEX Corp., CEMEX Egyptian Investments, B.V., CEMEX Egyptian Investments II, B.V., CEMEX Finance LLC, CEMEX France Gestion, (S.A.S.), CEMEX Research Group AG, CEMEX Shipping B.V. and CEMEX UK. Presented net of all...

  • Page 87
    ... an equity offering of the Parent Company in 2009, on September 17 , 2012, CEMEX entered into the Facilities Agreement pursuant to an invitation to the creditors under the Financing Agreement to exchange their existing loans and private placement notes under the Financing Agreement for new loans and...

  • Page 88
    ... Sunward Holding, B.V., CEMEX España, S.A., CEMEX Asia, B.V., CEMEX Corp., CEMEX Egyptian Investments, B.V., CEMEX Egyptian Investments II, B.V., CEMEX Finance LLC, CEMEX France Gestion, (S.A.S.), CEMEX Research Group AG, CEMEX Shipping B.V. and CEMEX UK. In addition, the debt under such agreements...

  • Page 89
    ..., 2015, 2014 and 2013, taking into account the Credit Agreement, the Facilities Agreement and the Financing Agreement, as applicable, CEMEX was in compliance with the financial covenants imposed by its debt contracts. The main consolidated financial ratios as of December 31, 2015, 2014 and 2013 were...

  • Page 90
    ... Agreement. That scenario will have a material adverse effect on CEMEX's liquidity, capital resources and financial position. 16B) Other financial obligations As of December 31, 2015 and 2014, other financial obligations in the consolidated balance sheet are detailed as follows: 2015 Short-term...

  • Page 91
    ... US$204. On October 3, 2014, pursuant to a private offer, CEMEX, S.A.B. de C.V issued US$200 ($2,948) "CCUs" in connection with the 2015 Convertible Notes, by means of which, in exchange for monthly payments by CEMEX to the holders of the CCUs at the annual rate of 3.0% on the notional amount...

  • Page 92
    ...as of December 31, 2015 and 2014, CEMEX maintained securitization programs for the sale of trade accounts receivable established in Mexico, the United States, France and the United Kingdom, by means of which, CEMEX effectively surrenders control associated with the trade accounts receivable sold and...

  • Page 93
    ..., with the objective of, as the case may be: a) changing the risk profile associated with the price of raw materials and other energy projects; and b) other corporate purposes. As of December 31, 2015 and 2014, the notional amounts and fair values of CEMEX's derivative instruments were as follows...

  • Page 94
    ... will pay LIBOR. Changes in the fair value of this interest rate swap generated losses of US$4 ($69) in 2015, of US$1 ($3) in 2014 and US$16 ($207) in 2013, recognized in the statements of operations for each year. II. Equity forwards in third party shares As of December 31, 2015 and 2014, CEMEX had...

  • Page 95
    ... obligations and originates mainly from trade accounts receivable. As of December 31, 2015 and 2014, the maximum exposure to credit risk is represented by the balance of financial assets. Management has developed policies for the authorization of credit to customers. The exposure to credit risk is...

  • Page 96
    ... 2015 and 2014. Foreign currency risk Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. CEMEX's exposure to the risk of changes in foreign exchange rates relates primarily to its operating...

  • Page 97
    ... recognized in profit or loss as part of "Other financial (expense) income, net. " A significant decrease in the market price of CEMEX's ADSs would negatively affect CEMEX's liquidity and financial position. As of December 31, 2015 and 2014, the potential change in the fair value of CEMEX's forward...

  • Page 98
    ... profitability, as well as borrowing under credit facilities, proceeds of debt and equity offerings, and proceeds from asset sales. CEMEX is exposed to risks from changes in foreign currency exchange rates, prices and currency controls, interest rates, inflation, governmental spending, social...

  • Page 99
    ...years ended December 31, 2015, 2014 and 2013 were approximately $706, $497 and $455, respectively. CEMEX contributes periodically the amounts offered by the pension plan to the employee's individual accounts, not retaining any remaining liability as of the balance sheet date. Defined benefit pension...

  • Page 100
    ... in the balance sheet as of December 31, 2015 and 2014 are presented as follows: Pensions 2015 2014 Other benefits 2015 2014 2015 Total 2014 Notes to the consolidated financial statements Change in benefits obligation: Projected benefit obligation at beginning of year Service cost Interest...

  • Page 101
    ... 3,438 1,868 16,881 In some countries, CEMEX has established health care benefits for retired personnel limited to a certain number of years after retirement. As of December 31, 2015 and 2014, the projected benefits obligation related to these benefits was approximately $786 and $842, respectively...

  • Page 102
    ..., during 2014, CEMEX in the United States terminated the retiree medical and life insurance coverage for most new retirees, and changed the existing retirees program effective January 1, 2015, where participants will cease their current plans and instead receive a Health Reimbursement Account (HRA...

  • Page 103
    ...during 2015, 2014 and 2013 were as follows: 2015 2014 2013 Deferred income tax (charged) credited to the statements of operations 1 Deferred income tax (charged) credited to stockholders' equity Reclassification to other captions in the balance sheet and in the statement of operations 2,3 Change in...

  • Page 104
    ... benefits associated with such deferred tax assets that have not been reserved, before their expiration, CEMEX would need to generate approximately $52,170 in consolidated pre-tax income in future periods. For the years ended December 31, 2014 and 2013, CEMEX reported pre-tax losses on a worldwide...

  • Page 105
    ... during the year related to applicable tax consolidation regimes Non-taxable sale of marketable securities and fixed assets Difference between book and tax inflation Differences in the income tax rates in the countries where CEMEX operates 1 Changes in deferred tax assets 2 Changes in provisions...

  • Page 106
    ... are as follows: • As of December 31, 2015, the U.S. Internal Revenue Service ("IRS") concluded its audit for the year 2013. The final findings did not alter the reserves CEMEX had set aside for these tax matters as they were not considered material to CEMEX's financial results and, as such, the...

  • Page 107
    ... if all appeals filed by CEMEX España are adversely resolved, it could have a material adverse impact on CEMEX's results of operations, liquidity or financial position. • On December 17 , 2012, the Mexican tax authorities published the Federation Revenues Law for the 2013 tax year that contained...

  • Page 108
    ... or financial position. • On February 9, 2014, the Egyptian Ministry of Finance's Appeals Committee (the "Appeals Committee") notified a resolution to Assiut Cement Company ("ACC"), a subsidiary of CEMEX in Egypt, requiring the payment of a development levy on clay applied to the Egyptian cement...

  • Page 109
    ...must represent at most 36% of CEMEX's capital stock. Shares that guarantee the conversion of both the outstanding voluntary and mandatorily convertible securities (note 16B). 2 3 On March 26, 2015, stockholders at the annual ordinary shareholders' meeting approved resolutions to: (i) increase the...

  • Page 110
    ... in connection with the change in the Parent Company's functional currency (note 2D). Upon conversion of these securities, the balances have been correspondingly reclassified to common stock and/or additional paid-in capital (note 16A). For the years ended December 31, 2015, 2014 and 2013, the...

  • Page 111
    ... in the following years as the executives render services. Beginning January 1, 2013, eligible executives belonging to the operations of CEMEX Latam Holding, S.A. ("CEMEX Latam"), indirect subsidiary of the Parent Company, which shares are traded in the Colombian Stock Exchange, ceased to receive...

  • Page 112
    ...,513 options outstanding granted to executives based on CEMEX's ADSs expired unexercised. As of December 31, 2015, there are no remaining options or commitments to make payments in cash to the executives based on changes in the market price of the Parent Company's shares or CEMEX Latam's shares. 22...

  • Page 113
    ...services (back office) in finance, accounting and human resources; as well as IT infrastructure services, support and maintenance of IT applications in the countries in which CEMEX operates. 23D) Commitments from employee benefits In some countries, CEMEX has self-insured health care benefits plans...

  • Page 114
    ... limit capacity. For the years ended December 31, 2015, 2014 and 2013, EURUS supplied (unaudited) approximately 28.0%, 28.2% and 25.8%, respectively, of CEMEX's overall electricity needs in Mexico during such year. This agreement is for CEMEX's own use and there is no intention of trading in energy...

  • Page 115
    ... Office alleged that there was an agreement between all cement producers in Poland regarding prices, market quotas and other sales conditions of cement, and that the producers exchanged confidential information, all of which limited competition in the Polish cement market. CEMEX Polska filed...

  • Page 116
    ...the cartel participants, filed a lawsuit in the District Court in Düsseldorf, Germany, against CEMEX Deutschland AG, a subsidiary of CEMEX in Germany, and other German cement companies in respect of damage claims relating to alleged price and quota fixing by German cement companies between 1993 and...

  • Page 117
    ... notified that the alleged anticompetitive practices in 2009 for the cement market and the years 2008, 2009, 2012, 2013 and 2014 for the ready-mix market. CEMEX España Operaciones, S.L.U. believes that it has not breached any applicable laws. As of December 31, 2015, considering the early stage of...

  • Page 118
    ... or financial condition. • On January 20, 2012, the United Kingdom Competition Commission (the "UK Commission"), commenced a market investigation ("MIR") into the supply or acquisition of cement, ready-mix concrete and aggregates. The referral to the UK Commission was made by the Office of...

  • Page 119
    ...October 26, 2010, CEMEX, Inc., received an Antitrust Civil Investigative Demand from the Office of the Florida Attorney General, which seeks documents and information in connection with an antitrust investigation in the ready-mix concrete industry in Florida. As of December 31, 2015, CEMEX Inc., has...

  • Page 120
    ... impact on CEMEX's results of operations, liquidity or financial condition. • In January 2009, in response to litigation brought by environmental groups concerning the manner in which certain federal quarry permits were granted to CEMEX Construction Materials Florida, LLC ("CEMEX Florida"), one of...

  • Page 121
    ... system in Bogota in which ready-mix concrete and flowable fill supplied by CEMEX Colombia and other ASOCRETO members was used. The plaintiffs alleged that the base material supplied for the road construction failed to meet the quality standards offered by CEMEX Colombia and the other ASOCRETO...

  • Page 122
    ... USA' s operations and CEMEX is not able to determine if the amounts are material for Florida Aggregate Transport. • For the years ended December 31, 2015, 2014 and 2013, the aggregate amount of compensation of CEMEX board of directors, including alternate directors, and top management executives...

  • Page 123
    ... 9 CEMEX International Trading, LLC 10 Transenegy, Inc. 11 1 1 2 3 Mexico Spain United States of America Spain Costa Rica Nicaragua Egypt Colombia Panama Dominican Republic Puerto Rico France Philippines Philippines Thailand Malaysia United Kingdom Germany Czech Republic Poland Israel Latvia United...

  • Page 124
    ... the company's home country or territory. In relation to CEMEX, Citibank, N.A. is the depositary of CEMEX's ADSs and each ADS represents 10 CPOs. The CEMEX ADSs are listed on the New York Stock Exchange. bps (Basis Point) is a unit of percentage measure equal to 0.01%, used to measure the changes to...

  • Page 125
    ... Securities and Exchange Commission in the U.S. This annual report also contains informational statistics related to the production, distribution, commercialization and sale of cement, ready-mix concrete, clinker and aggregates. Some of this information was generated internally by CEMEX, and other...

  • Page 126
    ..., Colombia Page 11 Cement plant, Poland Road in Panama Page 6 Oresund Bridge, Denmark CEMEX Research Group, Switzerland Page 18 El Carmen Natural Reserve, Mexico & USA Ventikas Wind Farm, Mexico Page 8 Right: Art Piece by Adrián Villar Rojas, United Kingdom Page 38 North Bridge Vistula River...