Auditors' report  
Management responsibility for internal control  
Consolidated balance sheets  
Consolidated statements of income  
Consolidated statements of changes in financial position  
Balance sheets
(parent company only)
 
Statements of income
(parent company only)
 
Statements of changes in financial position
(parent company only)
 
Statements of changes in stockholders' equity  
Notes to consolidated and parent-company-only financial statements  
     
 

 

CEMEX, S.A. DE C.V. AND CEMEX, S.A. DE C.V. AND SUBSIDIARIES

 


A) INVESTMENTS IN SUBSIDIARIES AND AFFILIATED COMPANIES
As of December 31, 2001 and 2000, investments in subsidiaries and affiliated companies accounted for by the equity method, are summarized as follows:

 
2001
2000
     
CONSOLIDATED 
PARENT 
CONSOLIDATED 
PARENT 
 

Contribution or book value at
acquisition date

 
$ 2,674.8 
7,908.4 
3,510.7 
39,807.5 
 

Equity in income and other changes in stockholders’ equity of subsidiaries and affiliated companies

 
2,064.0 
7,219.2 
1,564.5 
8,523.6 
     
$ 4,738.8
15,127.6
5,075.2
48,331.1


Investment held by subsidiaries in the Company's shares, amounting to $6,764.0 (146,868,013 CPOs and 1,791,695 appreciation warrants) and $5,091.6 (147,777,454 CPOs and 3,361,585 appreciation warrants) as of December 31, 2001 and 2000, respectively, are offset against majority interest stockholders' equity in the accompanying financial statements.

 

The Company's principal acquisitions and divestitures during 2001, 2000 and 1999, are the following:

  1. In May 2001, through CEMEX Asia Holdings Ltd. (CAH) and within the agreements formalized in 1999 between the Company and institutional investors in Asia to co-invest in CAH, a 100% economic interest in Saraburi Cement Company ("Saraburi"), a Thai cement producer, was acquired for approximately U.S.$73 million. Of this amount, the Company contributed U.S.$59.3 million and the minority investors contributed U.S.$13.7 million. As of December 31, 2001, the consolidated financial statements include Saraburi's balance sheet at the same date and Saraburi's results of operations for the eight-month period ended December 31, 2001.

  2. In addition, during 2001, the Company made majority acquisitions in companies, in diverse locations, for an approximate amount of U.S.$141.5 million, including real estate entities whose principal assets are land and buildings. The consolidated financial statements include the balance sheets of the acquired companies as of December 31, 2001 and the results of operations of such entities for the periods from the acquisition date to year-end.

  3. In March 2001, as part of a reorganization of subsidiaries in the United States, the operations of Southdown, Inc. ("Southdown") and Cemex USA, Inc. were merged into Cemex, Inc., a new entity, which substantially concentrates the Company's operations in that country. In November 2000, the Company acquired through its subsidiary CENA Acquisition Corp. ("CENA"), 100% of Southdown's outstanding stock. Approximately 91.7% (33,023,207 shares) of the total outstanding shares were acquired through a public tender offer, at the price of U.S.$73 per share. The remaining outstanding shares were acquired, during the same month, through the merger between Southdown and CENA, in which Southdown was the surviving corporation. As a result of the merger, any outstanding shares of Southdown' common stock not tendered for payment in the offer, by operation of law, were converted into the right to receive U.S.$73 per share in cash. The total amount paid for Southdown shares was approximately U.S. $2,628.3 million ($25,031.4), representing the purchase of the 91.7% and the payment obligation arising from the remaining shares not tendered in the offer. As of December 31, 2000, the consolidated financial statements included the balance sheet of Southdown at the same date and the results of operations for the two-month period ended December 31, 2000.

  4. In October 2000, a capital contribution of approximately U.S.$324 million ($3,085.7) was made to CAH, approximately U.S.$73 million of which was contributed by the minority investors. These funds were utilized by CAH mainly to acquire from a subsidiary of the Company its 25.5% equity interest in PT Semen Gresik (persero), Tbk. ("Gresik"), an Indonesian cement company, as well as other cement assets in Asia. The equity interest in Gresik was originally acquired during 1999 and 1998 for an approximate amount of U.S.$240.6 million.

    During 1999, the minority investors contributed capital to CAH for approximately U.S.$142.9 million, and the Company, through its subsidiaries, contributed to CAH its economic benefits in its Philippine subsidiaries, Rizal Cement Inc. ("Rizal"), acquired during 1998 and 1997 for approximately U.S.$223 million, representing 70.0% of Rizal's economic benefits, and APO Cement Corporation ("APO"), acquired on February 1999 for approximately U.S.$400 million, representing 99.9% of APO's economic benefits. As a result, the indirect participation of the Company in the economic benefits of Rizal and APO decreased to 54.2% and 77.3%, respectively. As of December 31, 1999, the consolidated income statement included the operating results of APO for the year ended December 31, 1999.

  5. In June 2000, the Company sold to Marriott International for a total amount of U.S.$113 million, properties in the tourism industry, including its 100% equity interest in the Marriott Casa Magna hotels in Cancun and Puerto Vallarta, resulting a net loss of approximately $62.9, representing the difference between the consideration received and the book value of these assets, which was recorded in other expenses, net. As of December 31, 2000, the consolidated income statement included the hotels' operating results for the five-month period ended May 31, 2000.

  6. In June 2000, through the exercise of a call option agreement, the Company acquired a 13% equity interest in Assiut Cement Company ("Assiut"), subsidiary of the Company in Egypt. In November 1999, the Company acquired from the Egyptian government a 77% equity interest in Assiut for approximately U.S.$318.8 million. In November 2000, an additional 2.9% equity interest was acquired from Assiut's employees, increasing the Company's equity interest to 92.9%. The transactions carried out during 2000 amounted to approximately U.S.$66.8 million ($636.2). As of December 31, 1999, the consolidated income statement included the results of operations of Assiut for the one-month period ended November 30, 1999. In January 2001, the Company increased its equity interest in Assiut to 95.8%.

  7. In September 1999, through a public tender offer, a subsidiary of the Company acquired 79.5% of the outstanding shares of Cementos del Pacífico, S.A. ("Cempasa"), a Costa Rican cement producer, for approximately U.S.$72 million. As a result of this transaction, the Company's equity interest in Cempasa was increased to 95.3%. As of December 31, 1999, the consolidated income statement included the operating results of Cempasa for the three-month period ended December 31, 1999. As of December 31, 2001, the equity interest in Cempasa was 98.3%.

  8. In June 1999, the Company acquired an 11.92% equity interest in Cementos Bio Bio, S.A., Chile's largest cement producer, for a total amount of approximately U.S.$34 million. As of December 31, 1999, the consolidated income statement includes the results of operations of Cementos Bio Bio for the seven-month period ended December 31, 1999, accounted for by the equity method.

Certain condensed financial information of the companies acquired during 2001 and 2000 and that were consolidated in the Company's financial statements in the year of acquisition is presented below:

 

 
2001
2000
     
SARABURI 
OTHERS 
SOUTHDOWN 
 

Total assets

 
$ 323.5 
2,141.0 
35,637.8 
 

Total liabilities

 
120.0 
854.0 
20,887.6 
 

Stockholders’ equity

 
203.5 
1,287.0 
14,750.2 
 

Sales

 
$ 129.4 
260.2 
1,604.9 
 

Operating income (loss)

 
22.0 
(7.5) 
245.0 
 

Net income (loss)

 
(9.0) 
117.0 
(79.9) 

 


As of December 31, 2001 and 2000, the main affiliated companies, the percentage of equity interest held by their direct holding company, as well as the investment accounted for under the equity method in the consolidated balance sheet were as follows:

 

     
% OF EQUITY INTEREST 
2001 
2000 
 

PT Semen Gresik (persero), Tbk.

 
25.5 
$ 1,891.0 
2,096.6 
 

Control Administrativo Mexicano, S.A. de C.V.

 
49.0 
 1,300.8
1,108.6 
 

Cementos Bío Bío, S.A.

 
11.9 
236.0 
308.4 

 

B) OTHER INVESTMENTS AND NONCURRENT ACCOUNTS RECEIVABLES

As of December 31, 2000, consolidated other investments consisted of Grupo Financiero Banamex-Accival ("Banacci") shares, which the Company had no intention of selling in the short-term.

In May 2001, Citigroup launched in Mexico a public tender offer for the 100% of the outstanding shares of Banacci. This process ended in August 2001 the date on which Citigroup officially declared the offer closed and the acquisition of Banacci. As a result of this offer and according to its terms and conditions, the Company sold its Banacci shares that were held in its long-term investments portfolio. The total amount of the sale was approximately U.S.$162.4 million ($1,489.2), and generated a non-recurring gain of approximately U.S.$131 million ($1,221.8), recognized in the Comprehensive Financing Result. Of this gain, approximately $727.5 corresponded to the reversal of unrealized valuation results that were accrued in stockholders' equity.

As of December 31, 2000, the Company had made advance payments of approximately $1,266.9 against the final settlement of forward contracts related to the purchase of the Company's own shares (see note 16A). As of December 31, 2001, this amount was reclassified to short-term assets.

In addition, as of December 31, 2001, a valuation gain of approximately U.S.$105.3 million ($965.2) was recognized in the balance sheet arising from the estimated fair value recognition of the Company's long-term derivative financial instruments (see notes 11B and 16).

 

 

 
     
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