EX-2 3 d758331dex2.htm EX-2

Exhibit 2

2014

SECOND QUARTER RESULTS

§ Stock Listing Information

NYSE (ADS)

Ticker: CX

Mexican Stock Exchange

Ticker: CEMEXCPO

Ratio of CEMEXCPO to CX = 10:1

§ Investor Relations

In the United States:

+ 1 877 7CX NYSE

In Mexico:

+ 52 (81) 8888 4292

E-Mail:

ir@cemex.com

Operating and financial highlights CEMEX

January – June Second Quarter

2014 2013 % Var. l-t-l% Var.* 2014 2013 % Var. l-t-l% Var.*

Consolidated cement volume 33,416 31,586 6% 17,788 17,204 3%

Consolidated ready-mix volume 27,048 26,282 3% 14,309 14,470 (1%)

Consolidated aggregates volume 81,191 76,203 7% 43,560 42,743 2%

Net sales 7,737 7,322 6% 7% 4,154 4,006 4% 4%

Gross profit 2,313 2,189 6% 7% 1,331 1,280 4% 4%

as % of net sales 29.9% 29.9% 0.0pp 32.0% 32.0% 0.0pp

Operating earnings before other expenses, net 722 690 5% 8% 456 451 1% 2%

as % of net sales 9.3% 9.4% (0.1pp) 11.0% 11.3% (0.3pp)

Controlling interest net income (loss) (220) (433) 49% 76 (152) N/A

Operating EBITDA 1,270 1,251 1% 3% 737 730 1% 1%

as % of net sales 16.4% 17.1% (0.7pp) 17.7% 18.2% (0.5pp)

Free cash flow after maintenance capital expenditures (396) (568) 30% 63 (86) N/A

Free cash flow (451) (603) 25% 31 (94) N/A

Total debt plus perpetual notes 17,045 16,948 1% 17,045 16,948 1%

Earnings (loss) per ADS (0.18) (0.36) 50% 0.06 (0.13) N/A

Fully diluted earnings (loss) per ADS (1) (0.18) (0.36) 50% 0.06 (0.13) N/A

Average ADSs outstanding 1,241.9 1,214.6 2% 1,254.3 1,215.6 3%

Employees 43,875 42,883 2% 43,875 42,883 2%

Cement and aggregates volumes in thousands of metric tons. Ready-mix volumes in thousands of cubic meters.

In millions of US dollars, except volumes, percentages, employees, and per-ADS amounts. Average ADSs outstanding are presented in millions.

Please refer to page 8 for end-of quarter CPO-equivalent units outstanding.

*Like to like (l-t-l”) percentage variations adjusted for investments/divestments and currency fluctuations.

(1)For 2014 and 2013, the effect of the potential dilutive shares generate anti-dilution; therefore, there is no change between the reported basic and diluted loss per share.

Consolidated net sales in the second quarter of 2014 increased to US$4.2 billion, representing an increase of 4% compared with the second quarter of 2013. Adjusting for business days in our operations during the quarter, the increase was 5%. The growth in consolidated net sales was due to higher prices of our products in local currency terms in most of our operations, as well as higher volumes in the U.S and our Mediterranean, South, Central America and the Caribbean and Asia regions.

Cost of sales as a percentage of net sales remained flat during the second quarter of 2014 compared with the same period last year.

Operating expenses as a percentage of net sales increased by 0.4pp during the second quarter of 2014 compared with the same period last year, from 20.7% to 21.1%, mainly due to higher distribution expenses.

Operating EBITDA increased by 1% to US$737 million during the second quarter of 2014 compared with the same period last year. On a like-to-like basis and adjusting for business days in our operations during the quarter, operating EBITDA increased by 3%. The increase was due to higher contributions from the U.S., as well as from our Northern Europe and Mediterranean regions.

Operating EBITDA margin decreased by 0.5pp from 18.2% in the second quarter of 2013 to 17.7% this quarter. On a like-to-like basis and adjusting for business days in our operations, operating EBITDA margin decreased by 0.3pp.

Other expenses, net, for the quarter resulted in an income of US$62 million, mainly due to a gain in sale of assets, partially offset by severance payments.

Gain (loss) on financial instruments for the quarter was a gain of US$77 million, resulting mainly from derivatives related to CEMEX shares.

Foreign exchange results for the quarter was a gain of US$65 million, mainly due to the fluctuation of the Mexican peso versus the U.S. dollar.

Controlling interest net income was US$76 million in the second quarter of 2014 versus a loss of US$152 million in the same quarter of 2013. The higher quarterly income primarily reflects higher other income, a gain on financial instruments, higher operating earnings before other expenses, net and lower income tax, partially offset by higher financial expenses and a lower foreign exchange gain.

Total debt plus perpetual notes decreased by US$125 million during the quarter.

Operating results CEMEX

Mexico

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 1,551 1,627 (5%) (1%) 816 847 (4%) (1%)

Operating EBITDA 497 514 (3%) 0% 247 250 (1%) 1%

Operating EBITDA margin 32.0% 31.6% 0.4pp 30.3% 29.6% 0.7pp

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume (0%) (2%) 4% 4% 13% 11%

Price (USD) (3%) (1%) (2%) (1%) (2%) 1%

Price (local currency) 0% 1% 1% 2% 2% 4%

Our Mexican operations’ domestic gray cement volumes decreased by 2% during the quarter versus the same period last year, while ready-mix volumes increased by 4% during the same period. During the first six months of the year, domestic gray cement volumes remained flat while ready-mix volumes increased by 4% versus the comparable period a year ago.

Volumes in the quarter were negatively affected by fewer business days compared to the same quarter last year due to the Holy Week holidays. Adjusting for business days, domestic gray cement and ready-mix volumes increased by 1% and 6%, respectively.

During the quarter, bulk cement sales continued showing a positive performance. Demand for our products was driven by higher activity in formal construction, especially in the formal residential and commercial segments. The informal residential sector was slightly down during the quarter, with cautious private spending as a result of the changes in the fiscal reform and a slower than expected economic recovery.

United States

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 1,749 1,604 9% 12% 957 868 10% 13%

Operating EBITDA 147 99 48% 46% 119 80 49% 48%

Operating EBITDA margin 8.4% 6.2% 2.2pp 12.4% 9.2% 3.2pp

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume 8% 7% (1%) (2%) (3%) (1%)

Price (USD) 4% 6% 8% 9% 12% 11%

Price (local currency) 4% 6% 8% 9% 12% 11%

Domestic gray cement volumes for CEMEX’s operations in the United States increased by 7% during the second quarter of 2014 versus the same period last year, while ready-mix and aggregates volumes declined by 2% and 1%, respectively. On a pro-forma basis, adjusting for the transfer of our ready-mix assets in the Carolinas into the newly established joint venture with Concrete Supply, ready-mix volumes grew 5%. During the first six months of the year and on a year-over-year basis, domestic gray cement and adjusted ready-mix volumes increased by 8% and 5%, respectively, while aggregates volumes declined by 3%.

The increase in our cement volumes during the quarter reflects an improved demand in most of our markets. The residential sector continued to be the main driver of demand during the quarter sustained by strong fundamentals such as large pent-up demand, low levels of inventories and relatively high affordability. The industrial-and-commercial sector also contributed favorably to volume growth, particularly in office construction. Infrastructure investment during the quarter was driven mainly by state activity.

Operating results CEMEX

Northern Europe

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 2,049 1,846 11% 5% 1,138 1,088 5% (2%)

Operating EBITDA 133 92 45% 38% 121 108 12% 6%

Operating EBITDA margin 6.5% 5.0% 1.5pp 10.6% 9.9% 0.7pp

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume 7% (2%) 4% (3%) 11% 2%

Price (USD) 6% 8% 6% 6% 6% 8%

Price (local currency) 1% 2% 0% 0% (0%) 1%

Our domestic gray cement volumes in the Northern Europe region decreased by 2% during the second quarter of 2014 and increased by 7% during the first six months of the year versus the comparable periods in 2013.

In Germany, our domestic gray cement volumes decreased by 7% during the second quarter and increased by 6% during the first six months of the year on a year-over-year basis. The decrease in our volumes during the quarter reflects construction brought forward to the first quarter due to favorable weather conditions. The residential sector continued to benefit from the good economic conditions such as low levels of unemployment and mortgage rates. A growth in wages and net immigration also contributed to housing demand. The performance of the infrastructure sector continues with its favorable trend.

Domestic gray cement volumes of our operations in Poland declined by 15% during the quarter and increased by 2% during the first six months of the year versus the comparable periods in 2013. Favorable weather conditions seen during the first quarter of 2014 caused projects to be brought forward in the year. The infrastructure sector continues with its favorable performance coming from a very low base in 2013. A steady reduction of housing inventories was seen in the residential sector. Office building construction was the main driver in the industrial-and-commercial sector.

In our operations in France, domestic ready-mix volumes decreased by 8% and our aggregates volumes increased by 3% during the second quarter of 2014 versus the comparable period last year. During the first six months of the year, ready-mix volumes increased by 1% and our aggregates volumes increased by 8%, on a year-over-year basis. The increase in aggregates volumes was driven by an increase in traded volumes. The infrastructure sector continues to be supported by a number of ongoing highway and high-speed-railway projects that started during 2012; nevertheless, the activity in this sector has slowed down due to the financing constraints, the government’s goal to reduce the deficit, and changes in administrations after local elections. The performance of the residential sector continues to be affected by the high level of unemployment, loss of buying power and a less attractive buy-to-let program.

In the United Kingdom, domestic gray cement, ready-mix, and aggregates volumes increased, on a year-over-year basis, by 1%, 2% and 14%, respectively, during the second quarter of 2014. For the first six months of the year our domestic gray cement, ready-mix and aggregates volumes increased by 2%, 4% and 15%, respectively, versus the comparable period in the previous year. During the quarter, the residential sector continued driving demand for our products. Activity in this sector was supported by the improvement in economic conditions, a rise in consumer confidence and government incentives to promote home ownership. The industrial and commercial sector performed favorably during the quarter mainly with investments in new warehouses.

Operating results CEMEX

Mediterranean

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 861 747 15% 13% 449 400 12% 10%

Operating EBITDA 181 168 8% 8% 100 94 6% 6%

Operating EBITDA margin 21.0% 22.5% (1.5pp) 22.2% 23.5% (1.3pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume 1% 1% 6% 1% (3%) (12%)

Price (USD) 8% 9% 7% 6% 27% 31%

Price (local currency) 8% 9% 3% 2% 21% 25%

Our domestic gray cement volumes in the Mediterranean region increased by 1% during the second quarter and increased by 1% during the first six months of the year versus the same periods in 2013.

Domestic gray cement, and our ready-mix volumes for our operations in Spain increased by 6% and 7%, respectively, on a year-over-year basis during the quarter. For the first six months of the year, domestic gray cement volumes remained flat, while ready-mix volumes increased by 2% compared with the same period in 2013. Improved macroeconomic conditions in the country and stabilization in home prices has led to an increase in activity in the residential sector. In the infrastructure sector an increase in public biddings was visible during the quarter, from very low levels.

In Egypt, our domestic gray cement volumes decreased by 2% during the second quarter of 2014 and declined by 3% during the first six months of the year on a year-over-year basis. The informal residential sector continues to be the main driver of demand in the country supported by our alternative fuel strategy in the country. The formal residential sector continued showing initial signs of reactivation.

South, Central America and the Caribbean

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 1,099 1,059 4% 9% 562 561 0% 3%

Operating EBITDA 365 399 (9%) (4%) 178 211 (16%) (14%)

Operating EBITDA margin 33.2% 37.7% (4.5pp) 31.6% 37.6% (6.0pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume 8% 1% 11% 7% 21% 16%

Price (USD) (5%) (3%) (4%) (3%) (5%) (2%)

Price (local currency) (0%) (1%) 1% (1%) (0%) (0%)

Our domestic gray cement volumes in the region increased by 1% during the second quarter of 2014 and increased by 8% during the first six months of the year versus the comparable periods last year.

Domestic gray cement, ready-mix, and aggregates volumes for our operations in Colombia increased by 9%, 13%, and 27%, respectively, during the second quarter compared to the same period a year ago. For the first six months of the year cement, ready-mix, and aggregates volumes increased by 20%, 17% and 32%, respectively, on a year-over-year basis. Construction activity in the second quarter continued driven by the residential sector, benefiting from the government-sponsored housing initiatives. Infrastructure remained an important driver for demand of our products with the execution of several ongoing projects that were awarded in past years.

Operating results CEMEX

January – June Second Quarter

2014 2013 % Var. l-t-l % Var.* 2014 2013 % Var. l-t-l % Var.*

Net sales 306 305 0% 11% 160 162 (2%) 7%

Operating EBITDA 59 62 (5%) (2%) 34 38 (11%) (8%)

Operating EBITDA margin 19.3% 20.5% (1.2pp) 21.2% 23.5% (2.3pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-mix Aggregates

Year-over-year percentage variation January – June Second Quarter January – June Second Quarter January – June Second Quarter

Volume 5% 1% (21%) (29%) 14% (28%)

Price (USD) (4%) (2%) 8% 10% 3% (13%)

Price (local currency) 2% 2% 14% 15% 9% (9%)

Our domestic gray cement volumes in the region increased by 1% during the second quarter and increased by 5% during the first six months of 2014 on a year-over-year basis.

In the Philippines, our domestic gray cement volumes increased by 2% during the second quarter of 2014 and increased by 7% during the first six months of 2014 versus the comparable periods of last year. The residential sector continued to be supported by favorable economic conditions such as stable levels of inflation and mortgage rates, healthy remittances inflows and an increase in activity in the high-end residential segment. Government spending for rehabilitation and reconstruction efforts contributed to the positive performance of the infrastructure sector. The industrial-and-commercial sector continued with its positive trend.

Operating EBITDA, free cash flow and debt-related Information CEMEX

Operating EBITDA and free cash flow

January – June Second Quarter

2014 2013 % Var 2014 2013 % Var

Operating earnings before other expenses, net 722 690 5% 456 451 1%

+ Depreciation and operating amortization 548 561 281 279

Operating EBITDA 1,270 1,251 1% 737 730 1%

- Net financial expense 692 719 343 362

- Maintenance capital expenditures 189 149 121 101

- Change in working capital 453 538 148 207

- Taxes paid 438 408 211 133

- Other cash items (net) (108) 5 (148) 14

Free cash flow after maintenance capital expenditures (396) (568) 30% 63 (86) N/A

- Strategic capital expenditures 55 35 32 8

Free cash flow (451) (603) 25% 31 (94) N/A

In millions of US dollars, except percentages.

The free cash flow during the quarter plus the reduction in cash and the proceeds from our notes issued in April were used to pay other higher coupon notes and their associated fees and premiums.

Our debt during the quarter reflects the conversion of a portion of our 2015 convertibles into ADSs as well as a positive foreign conversion effect of US$5 million.

Information on debt and perpetual notes

First Second

Second Quarter Quarter Quarter

2014 2013 % Var 2014 2014 2013

Total debt (1) 16,569 16,476 1% 16,693 Currency denomination

Short-term 3% 3% 6% US dollar 87% 85%

Long-term 97% 97% 94% Euro 11% 13%

Perpetual notes 476 472 1% 477 Mexican peso 2% 2%

Cash and cash equivalents 737 746 (1%) 845 Other 0% 0%

Net debt plus perpetual notes 16,308 16,201 1% 16,325

Interest rate

Consolidated funded debt (2)/EBITDA (3) 5.49 5.54 5.54 Fixed 66% 70%

Interest coverage (3) (4) 2.15 2.06 2.12 Variable 34% 30%

In millions of US dollars, except percentages and ratios.

(1) Includes convertible notes and capital leases, in accordance with International Financial Reporting Standards (IFRS).

(2) Consolidated funded debt as of June 30, 2014 was US$14,629 million, in accordance with our contractual obligations under the Facilities Agreement.

(3) EBITDA calculated in accordance with IFRS.

(4) Interest expense calculated in accordance with our contractual obligations under the Facilities Agreement.

Equity-related and derivative instruments information CEMEX

Equity-related information

One CEMEX ADS represents ten CEMEX CPOs. The following amounts are expressed in CPO terms.

Beginning-of-quarter CPO-equivalent units outstanding 11,683,268,105

CPOs issued due to recapitalization of retained earnings 468,033,076

CPOs issued as result of the conversion of a portion of our 2015 convertible securities 115,124,070

Less increase (decrease) in the number of CPOs held in subsidiaries 702,349

End-of-quarter CPO-equivalent units outstanding 12,265,722,902

Outstanding units equal total CEMEX CPO-equivalent units less CPOs held in subsidiaries, which as of June 30, 2014 were 18,261,131.

CEMEX has outstanding mandatorily convertible securities which, upon conversion, will increase the number of CPOs outstanding by approximately 210 million, subject to antidilution adjustments.

Employee long-term compensation plans

As of June 30, 2014, executives had outstanding options on a total of 4,720,450 CPOs, with a weighted-average strike price of approximately US$1.55 per CPO (equivalent to US$15.49 per ADS). Starting in 2005, CEMEX began offering executives a restricted stock-ownership program. As of June 30, 2014, our executives held 24,108,928 restricted CPOs, representing 0.2% of our total CPOs outstanding as of such date.

Derivative instruments

The following table shows the notional amount for each type of derivative instrument and the aggregate fair market value for all of CEMEX’s derivative instruments as of the last day of each quarter presented.

Second Quarter First Quarter

Notional amount of equity related derivatives (1) 1,792 2,410 1,792

Estimated aggregate fair market value (1) (2) (3) 529 320 452

In millions of US dollars.

The estimated aggregate fair market value represents the approximate settlement result as of the valuation date, based upon quoted market prices and estimated settlement costs, which fluctuate over time. Fair market values and notional amounts do not represent amounts of cash currently exchanged between the parties; cash amounts will be determined upon termination of the contracts considering the notional amounts and quoted market prices as well as other derivative items as of the settlement date. Fair market values should not be viewed in isolation, but rather in relation to the fair market values of the underlying hedge transactions and the overall reduction in CEMEX’s exposure to the risks being hedged.

Note: Under IFRS, companies are required to recognize all derivative financial instruments on the balance sheet as assets or liabilities, at their estimated fair market value, with changes in such fair market values recorded in the income statement, except when transactions are entered into for cash-flow-hedging purposes, in which case changes in the fair market value of the related derivative instruments are recognized temporarily in equity and then reclassified into earnings as the inverse effects of the underlying hedged items flow through the income statement. As of June 30, 2014, in connection with the fair market value recognition of its derivatives portfolio, CEMEX recognized increases in its assets and liabilities resulting in a net asset of US$562 million, including a liability of US$47 million corresponding to an embedded derivative related to our mandatorily convertible securities, which according to our debt agreements, is presented net of the assets associated with the derivative instruments. The notional amounts of derivatives substantially match the amounts of underlying assets, liabilities, or equity transactions on which the derivatives are being entered into.

(1) Excludes an interest-rate swap related to our long-term energy contracts. As of June 30, 2014, the notional amount of this derivative was US$170 million, with a positive fair market value of approximately US$33 million.

(2) Net of cash collateral deposited under open positions. Cash collateral was US$6 million as of June 30, 2014 and US$10 million as of June 30, 2013.

(3) As required by IFRS, the estimated aggregate fair market value as of June 30, 2014 and 2013 includes a liability of US$47 million and US$33 million, respectively, relating to an embedded derivative in CEMEX’s mandatorily convertible securities.

Operating results CEMEX

Consolidated Income Statement & Balance Sheet

CEMEX, S.A.B. de C.V. and Subsidiaries

(Thousands of U.S. Dollars, except per ADS amounts)

January – June Second Quarter

like-to-like like-to-like

INCOME STATEMENT 2014 2013 % Var. % Var.* 2014 2013 % Var. % Var.*

Net sales 7,736,540 7,322,113 6% 7% 4,154,222 4,005,579 4% 4%

Cost of sales (5,423,701) (5,133,572) (6%) (2,822,996) (2,725,212) (4%)

Gross profit 2,312,839 2,188,541 6% 7% 1,331,226 1,280,367 4% 4%

Operating expenses (1,591,302) (1,498,359) (6%) (875,326) (829,310) (6%)

Operating earnings before other expenses, net 721,537 690,181 5% 8% 455,900 451,057 1% 2%

Other expenses, net 23,422 (125,137) N/A 62,252 (105,536) N/A

Operating earnings 744,959 565,045 32% 518,151 345,521 50%

Financial expense (841,434) (731,339) (15%) (435,115) (363,060) (20%)

Other financial income (expense), net 139,991 44,805 212% 131,671 41,870 214%

Financial income 14,033 16,479 (15%) 6,276 8,575 (27%)

Results from financial instruments, net 120,616 71,378 69% 76,912 (51,530) N/A

Foreign exchange results 38,720 (16,254) N/A 65,363 101,536 (36%)

Effects of net present value on assets and liabilities and others, net (33,379) (26,797) (25%) (16,880) (16,711) (1%)

Equity in gain (loss) of associates 5,668 2,567 121% 6,086 7,346 (17%)

Income (loss) before income tax 49,184 (118,923) N/A 220,794 31,677 597%

Income tax (231,067) (269,063) 14% (122,832) (154,624) 21%

Consolidated net income (loss) (181,883) (387,986) 53% 97,962 (122,946) N/A

Non-controlling interest net income (loss) 38,428 44,687 (14%) 21,964 29,390 (25%)

Controlling interest net income (loss) (220,311) (432,673) 49% 75,997 (152,337) N/A

Operating EBITDA 1,269,682 1,251,236 1% 3% 737,120 730,347 1% 1%

Earnings (loss) per ADS (0.18) (0.36) 50% 0.06 (0.13) N/A

As of June 30

BALANCE SHEET 2014 2013 % Var.

Total assets 37,713,343 36,583,446 3%

Cash and cash equivalents 737,320 746,281 (1%)

Trade receivables less allowance for doubtful accounts 2,169,115 2,178,453 (0%)

Other accounts receivable 595,427 492,416 21%

Inventories, net 1,360,355 1,250,166 9%

Other current assets 332,926 400,579 (17%)

Current assets 5,195,142 5,067,896 3%

Property, machinery and equipment, net 15,576,321 15,710,860 (1%)

Other assets 16,941,880 15,804,691 7%

Total liabilities 26,044,129 24,735,001 5%

Current liabilities 4,733,404 4,425,033 7%

Long-term liabilities 14,443,155 13,807,740 5%

Other liabilities 6,867,570 6,502,228 6%

Total stockholders’ equity 11,669,214 11,848,445 (2%)

Non-controlling interest and perpetual instruments 1,188,786 1,086,848 9%

Total controlling interest 10,480,428 10,761,598 (3%)

Operating results CEMEX

Consolidated Income Statement & Balance Sheet

CEMEX, S.A.B. de C.V. and Subsidiaries

(Thousands of Mexican Pesos in nominal terms, except per ADS amounts)

January – June Second Quarter

INCOME STATEMENT 2014 2013 % Var. 2014 2013 % Var.

Net sales 101,348,673 92,478,288 10% 53,880,257 50,630,523 6%

Cost of sales (71,050,478) (64,837,020) (10%) (36,614,261) (34,446,683) (6%)

Gross profit 30,298,195 27,641,268 10% 17,265,996 16,183,840 7%

Operating expenses (20,846,058) (18,924,277) (10%) (11,352,980) (10,482,480) (8%)

Operating earnings before other expenses, net 9,452,137 8,716,990 8% 5,913,017 5,701,360 4%

Other expenses, net 306,828 (1,580,477) N/A 807,402 (1,333,980) N/A

Operating earnings 9,758,966 7,136,513 37% 6,720,419 4,367,380 54%

Financial expense (11,022,791) (9,236,818) (19%) (5,643,436) (4,589,074) (23%)

Other financial income (expense), net 1,833,878 565,885 224% 1,707,770 529,239 223%

Financial income 183,838 208,124 (12%) 81,404 108,389 (25%)

Results from financial instruments, net 1,580,071 901,507 75% 997,546 (651,337) N/A

Foreign exchange results 507,231 (205,293) N/A 847,753 1,283,409 (34%)

Effects of net present value on assets and liabilities and others, net (437,262) (338,452) (29%) (218,934) (211,222) (4%)

Equity in gain (loss) of associates 74,257 32,426 129% 78,939 92,858 (15%)

Income (loss) before income tax 644,308 (1,501,994) N/A 2,863,692 400,403 615%

Income tax (3,026,976) (3,398,271) 11% (1,593,131) (1,954,446) 18%

Consolidated net income (loss) (2,382,667) (4,900,265) 51% 1,270,561 (1,554,044) N/A

Non-controlling interest net income (loss) 503,405 564,400 (11%) 284,876 371,492 (23%)

Controlling interest net income (loss) (2,886,073) (5,464,665) 47% 985,685 (1,925,536) N/A

Operating EBITDA 16,632,839 15,803,114 5% 9,560,451 9,231,592 4%

Earnings (loss) per ADS (2.32) (4.50) 48% 0.79 (1.58) N/A

As of June 30

BALANCE SHEET 2014 2013 % Var.

Total assets 489,142,064 474,121,463 3%

Cash and cash equivalents 9,563,040 9,671,798 (1%)

Trade receivables less allowance for doubtful accounts 28,133,417 28,232,752 (0%)

Other accounts receivable 7,722,682 6,381,717 21%

Inventories, net 17,643,804 16,202,151 9%

Other current assets 4,318,054 5,191,508 (17%)

Current assets 67,380,997 65,679,926 3%

Property, machinery and equipment, net 202,024,888 203,612,741 (1%)

Other assets 219,736,179 204,828,795 7%

Total liabilities 337,792,354 320,565,612 5%

Current liabilities 61,392,256 57,348,426 7%

Long-term liabilities 187,327,720 178,948,315 5%

Other liabilities 89,072,378 84,268,871 6%

Total stockholders’ equity 151,349,710 153,555,851 (1%)

Non-controlling interest and perpetual instruments 15,418,555 14,085,547 9%

Total controlling interest 135,931,154 139,470,304 (3%)

Operating results CEMEX

Operating Summary per Country

In thousands of U.S. dollars

January – June Second Quarter

like-to-like like-to-like

NET SALES 2014 2013 % Var. % Var. * 2014 2013 % Var. % Var. *

Mexico 1,551,376 1,626,674 (5%) (1%) 815,718 847,311 (4%) (1%)

U.S.A. 1,748,623 1,604,274 9% 12% 957,105 868,288 10% 13%

Northern Europe 2,048,501 1,845,848 11% 5% 1,137,665 1,088,199 5% (2%)

Mediterranean 860,738 747,422 15% 13% 448,590 399,992 12% 10%

South, Central America and the Caribbean 1,099,407 1,059,271 4% 9% 562,038 561,489 0% 3%

Asia 305,729 304,956 0% 11% 159,867 162,398 (2%) 7%

Others and intercompany eliminations 122,167 133,669 (9%) (9%) 73,239 77,902 (6%) (6%)

TOTAL 7,736,540 7,322,113 6% 7% 4,154,222 4,005,579 4% 4%

GROSS PROFIT

Mexico 753,322 763,274 (1%) 2% 393,128 395,134 (1%) 2%

U.S.A. 273,371 189,040 45% 45% 181,703 131,366 38% 39%

Northern Europe 451,239 396,575 14% 7% 302,954 279,383 8% 2%

Mediterranean 252,945 265,726 (5%) (6%) 143,076 172,450 (17%) (18%)

South, Central America and the Caribbean 477,634 495,313 (4%) 1% 239,498 251,520 (5%) (3%)

Asia 82,886 80,520 3% 10% 45,262 48,612 (7%) (2%)

Others and intercompany eliminations 21,443 (1,908) N/A N/A 25,605 1,901 N/A N/A

TOTAL 2,312,839 2,188,541 6% 7% 1,331,226 1,280,367 4% 4%

OPERATING EARNINGS BEFORE OTHER EXPENSES, NET

Mexico 405,598 416,082 (3%) 1% 200,972 201,575 (0%) 2%

U.S.A. (70,874) (133,087) 47% 46% 7,939 (32,009) N/A N/A

Northern Europe 17,493 (15,429) N/A N/A 60,428 50,971 19% 12%

Mediterranean 130,031 112,907 15% 16% 73,811 67,199 10% 10%

South, Central America and the Caribbean 321,607 356,725 (10%) (6%) 155,136 189,757 (18%) (16%)

Asia 44,182 46,297 (5%) (3%) 26,312 30,252 (13%) (11%)

Others and intercompany eliminations (126,500) (93,314) (36%) (42%) (68,698) (56,687) (21%) (25%)

TOTAL 721,537 690,181 5% 8% 455,900 451,057 1% 2%

Operating results CEMEX

Operating Summary per Country

EBITDA in thousands of U.S. dollars. EBITDA margin as a percentage of net sales.

January – June Second Quarter

like-to-like like-to-like

OPERATING EBITDA 2014 2013 % Var. % Var. * 2014 2013 % Var. % Var. *

Mexico 497,123 513,667 (3%) 0% 247,092 250,466 (1%) 1%

U.S.A. 146,943 99,028 48% 46% 119,080 80,171 49% 48%

Northern Europe 133,257 91,861 45% 38% 120,919 107,764 12% 6%

Mediterranean 181,138 167,918 8% 8% 99,778 94,194 6% 6%

South, Central America and the Caribbean 364,648 398,926 (9%) (4%) 177,726 210,899 (16%) (14%)

Asia 59,114 62,404 (5%) (2%) 33,836 38,195 (11%) (8%)

Others and intercompany eliminations (112,540) (82,568) (36%) (43%) (61,310) (51,342) (19%) (23%)

TOTAL 1,269,682 1,251,236 1% 3% 737,120 730,347 1% 1%

OPERATING EBITDA MARGIN

Mexico 32.0% 31.6% 30.3% 29.6%

U.S.A. 8.4% 6.2% 12.4% 9.2%

Northern Europe 6.5% 5.0% 10.6% 9.9%

Mediterranean 21.0% 22.5% 22.2% 23.5%

South, Central America and the Caribbean 33.2% 37.7% 31.6% 37.6%

Asia 19.3% 20.5% 21.2% 23.5%

TOTAL 16.4% 17.1% 17.7% 18.2%

Operating results CEMEX

Volume Summary

Consolidated volume summary

Cement and aggregates: Thousands of metric tons.

Ready-mix: Thousands of cubic meters.

January – June Second Quarter

2014 2013 % Var. 2014 2013 % Var.

Consolidated cement volume 1 33,416 31,586 6% 17,788 17,204 3%

Consolidated ready-mix volume 27,048 26,282 3% 14,309 14,470 (1%)

Consolidated aggregates volume 81,191 76,203 7% 43,560 42,743 2%

Per-country volume summary

January – June Second Quarter Second Quarter 2014 Vs.

DOMESTIC GRAY CEMENT VOLUME 2014 Vs. 2013 2014 Vs. 2013 First Quarter 2014

Mexico (0%) (2%) 6%

U.S.A. 8% 7% 20%

Northern Europe 7% (2%) 36%

Mediterranean 1% 1% 13%

South, Central America and the Caribbean 8% 1% 1%

Asia 5% 1% 4%

READY-MIX VOLUME

Mexico 4% 4% 8%

U.S.A. (1%) (2%) 14%

Northern Europe 4% (3%) 24%

Mediterranean 6% 1% (3%)

South, Central America and the Caribbean 11% 7% 7%

Asia (21%) (29%) 1%

AGGREGATES VOLUME

Mexico 13% 11% 10%

U.S.A. (3%) (1%) 9%

Northern Europe 11% 2% 31%

Mediterranean (3%) (12%) (8%)

South, Central America and the Caribbean 21% 16% 11%

Asia 14% (28%) (44%)

1 Consolidated cement volume includes domestic and export volume of gray cement, white cement, special cement, mortar and clinker.

Operating results CEMEX

Price Summary

Variation in U.S. Dollars

January – June Second Quarter Second Quarter 2014 Vs.

DOMESTIC GRAY CEMENT PRICE 2014 Vs. 2013 2014 Vs. 2013 First Quarter 2014

Mexico (3%) (1%) 3%

U.S.A. 4% 6% 5%

Northern Europe (*) 6% 8% (0%)

Mediterranean (*) 8% 9% 7%

South, Central America and the Caribbean (*) (5%) (3%) 1%

Asia (*) (4%) (2%) 4%

READY-MIX PRICE

Mexico (2%) (1%) 4%

U.S.A. 8% 9% 2%

Northern Europe (*) 6% 6% (3%)

Mediterranean (*) 7% 6% 0%

South, Central America and the Caribbean (*) (4%) (3%) 1%

Asia (*) 8% 10% 4%

AGGREGATES PRICE

Mexico (2%) 1% 6%

U.S.A. 12% 11% 5%

Northern Europe (*) 6% 8% (3%)

Mediterranean (*) 27% 31% 3%

South, Central America and the Caribbean (*) (5%) (2%) 4%

Asia (*) 3% (13%) (18%

Variation in Local Currency

January – June Second Quarter Second Quarter 2014 Vs.

DOMESTIC GRAY CEMENT PRICE 2014 Vs. 2013 2014 Vs. 2013 First Quarter 2014

Mexico 0% 1% 1%

U.S.A. 4% 6% 5%

Northern Europe (*) 1% 2% (1%)

Mediterranean (*) 8% 9% 9%

South, Central America and the Caribbean (*) (0%) (1%) (1%)

Asia (*) 2% 2% 2%

READY-MIX PRICE

Mexico 1% 2% 2%

U.S.A. 8% 9% 2%

Northern Europe (*) 0% 0% (4%)

Mediterranean (*) 3% 2% (0%)

South, Central America and the Caribbean (*) 1% (1%) (2%)

Asia (*) 14% 15% 2%

AGGREGATES PRICE

Mexico 2% 4% 4%

U.S.A. 12% 11% 5%

Northern Europe (*) (0%) 1% (4%)

Mediterranean (*) 21% 25% 2%

South, Central America and the Caribbean (*) (0%) (0%) 0%

Asia (*) 9% (9%) (20%)

(*) Volume weighted-average price.

Other activities CEMEX

CEMEX announces new CLH grinding plant in Nicaragua

On May 5, 2014 CEMEX announced that its subsidiary CEMEX Latam Holdings, S.A. (“CLH”) (BVC: CLH) has started the construction of a new cement grinding plant in Ciudad Sandino, Managua, that is expected to increase its cement production capacity in Nicaragua by approximately 104%. CLH will invest approximately US$55 million for the construction of the grinding mill, which will be completed in two phases, expected to reach an estimated annual cement production capacity of 860,000 tons by 2017. During the first phase, US$30 million will be invested for infrastructure procurement and the installation of a cement grinding mill with a production capacity of approximately 220,000 tons. This phase is expected to be completed by the end of the second quarter of 2015. The second phase includes the installation of a second cement grinding mill with an annual production capacity of 220,000 tons and an investment of US$25 million, and is expected to be completed by the end of 2017. Additionally, CLH will implement reforestation in the area and community support plans, starting with the launch of its Self-Employment Productions Centers or Centros Productivos de Auto Empleo (CPAs) program, whereby concrete blocks are produced for home improvement in collaboration with communities and local governments.

CEMEX announces new Chairman of the Board and new CEO

On May 12, 2014 CEMEX informed that Mr. Lorenzo H. Zambrano, Chairman of the Board of Directors and Chief Executive Officer of CEMEX, passed away in the city of Madrid, Spain. On May 15, 2014 CEMEX announced that its Board of Directors, by unanimous decision, appointed Mr. Rogelio Zambrano as Chairman of the Board of Directors and Fernando A. Gonzalez as Chief Executive Officer. Mr. Rogelio Zambrano previously served as a member of the Board of Directors, and Fernando A. Gonzalez previously held the position of Executive Vice President of Finance (CFO) and Administration. Mr. Rogelio Zambrano has been a member of CEMEX’s Board of Directors since 1987 and President of CEMEX’s Finance Committee since 2009. He is also a member of the Advisory Board of Grupo Financiero Banamex Zona Norte, and a member of the Boards of Directors of Carza and Tecnologico de Monterrey, among others. He is a graduate in Industrial Engineering from the Tecnologico de Monterrey and holds an MBA from The Wharton School of Business, University of Pennsylvania. Mr. Fernando A. Gonzalez joined CEMEX in 1989, and since, he has held several senior management positions in Human Capital, Strategic Planning and Business Development, and served as CFO. He has led CEMEX’s business in Latin America, Europe, Africa, Middle East, and Asia. He earned his BA and MBA from Tecnologico de Monterrey. The Board also appointed Mr. Ian C. Armstrong as a member of the Board. Such appointment was subject to be ratified by the next Annual General Meeting, to be held in 2015. Mr. Armstrong is Vice President of Promotion and Analysis at Evercore Casa de Bolsa. He is also a member of the Board of Directors of Tec Salud, Fondo Zambrano Hellion, and Patronato DIF Nuevo Leon. He is a graduate in Business Administration from Tecnologico de Monterrey and holds an MBA from IE Business School.

CEMEX announces senior level organizational changes

On May 21, 2014 CEMEX announced changes to its senior level organization, effective immediately. CEMEX’s corporate staff functions, are now organized in six Executive Vice-Presidencies, reporting to the CEO, and led by the following executives:

Jose Antonio Gonzalez was appointed Executive Vice President of Finance (CFO), overseeing Finance, Controllership, Taxes and Processes Assessment.

Maher Al-Haffar, was appointed Executive Vice President of Investor Relations, Communications and Public Affairs.

Juan Pablo San Agustin will continue as Executive Vice President of Strategic Planning and Business Development.

Luis Hernandez will continue as Executive Vice President of Organization and Human Resources. In addition to OHR, Security and Administrative Services, he now oversees Processes and IT, Innovation, Global Service Organization, Vendor Management Organization, and Neoris.

Ramiro Villarreal was appointed Executive Vice President of Legal, and will continue serving as Secretary of the Board of Directors.

Mauricio Doehner, was appointed Executive Vice President of Corporate Affairs and Enterprise Risk Management.

The six operational Regional Presidencies remained unchanged, and their respective heads continue reporting directly to the CEO:

Juan Romero, President of CEMEX Mexico, who also oversees Global Technology.

Karl Watson, Jr., President of CEMEX USA.

Jaime Elizondo, President of CEMEX South America and Caribbean, who also oversees Global Procurement.

Ignacio Madridejos, President of CEMEX Northern Europe, who also oversees Global Energy and Sustainability.

Jaime Muguiro, President of CEMEX Mediterranean;

Joaquin Estrada, President of CEMEX Asia, who also oversees Global Trading.

Additionally, Francisco Javier Garza Zambrano, Chairman of CEMEX Latin America Advisory Board and Advisor to the CEO on Institutional Relations, decided to retire after 25 years of a successful career with CEMEX. This organizational change was effective on July 15, 2014

CEMEX helps address the challenges of urbanization

On May 28, 2014 CEMEX released its 2013 Sustainable Development Report, which shows significant progress in major priority areas that align with the challenges of increasing urban populations. During 2013, CEMEX worked to conceptualize and develop new products and solutions to promote efficient construction practices, preserve natural resources, lower the carbon footprint of its projects throughout their lifecycle, improve job site safety and foster a strong relationship with its communities and stakeholders. The report includes an external limited assurance statement by PricewaterhouseCoopers for the eighth consecutive year, as well as a statement from the company’s Sustainability Reporting Advisory Panel. If you want to know more about CEMEX’s sustainability strategy and efforts, please review CEMEX’s 2013 Sustainable Development Report, which achieved a GRI-checked application level of A+ for the sixth consecutive year and is available online at the website. In order to facilitate analysts’ access to all the relevant documents, CEMEX included a special section on its website called ESG Analyst and SRI Center. The section provides direct links to key information such as SDR, GRI Index, UNGC COP, policies, position papers and more.

Other information CEMEX

Integration of Mexican business and operational activities

During the first and second quarter of 2014, in order to run its operations in Mexico more efficiently and to facilitate the acquisition of financing, CEMEX launched an initiative to integrate its Mexican businesses and operational activities in Mexico under a single entity. This initiative considers that there are efficiency and improvement opportunities by shifting from a platform where CEMEX serves its customers from different entities according to its line of business (i.e. cement, concrete, aggregates), into a platform where customers, now sorted by end-user segment (i.e. distributor, builder, manufacturer) will be serviced from a single entity. Under this initiative CEMEX, S.A.B. de C.V. will integrate productive, commercial, marketing and administrative activities related to the sale of cement, ready-mix concrete, aggregates and other construction materials in Mexico. As part of this initiative, CEMEX S.A.B. de C.V., will enter into lease agreements of property, plant and equipment, with CEMEX México, S.A. de C.V., CEMEX Concretos, S.A. de C.V. and CEMEX Agregados, S.A. de C.V., these companies that have carried operating activities until December 31, 2013 and the beginning of 2014, will cease to have operating activities significantly on or after April 1, 2014, and while maintaining property of the assets will mainly act as lessors. To implement the Mexican integration initiative efficiently, a wholly owned administrative trust will be used to concentrate lease payments and obtain financing. CEMEX, S.A.B. de C.V. will continue to consolidate the entire CEMEX group.

Mexican Tax Reform 2010 and 2014

In November 2009, Mexico approved amendments to the income tax law, which became effective on January 1, 2010. Such amendments modified the tax consolidation regime by requiring entities to determine income taxes as if the tax consolidation provisions did not exist from 1999 onward, specifically turning into taxable items: a) the difference between the sum of the equity of the controlled entities for tax purposes and the equity of the consolidated entity for tax purposes; b) dividends from the controlled entities for tax purposes to CEMEX, S.A.B. de C.V.; and c) other transactions that represented the transfer of resources between the companies included in the tax consolidation. In December 2010, pursuant to miscellaneous rules, the tax authority in Mexico granted the option to defer the calculation and payment of the income tax over the difference in equity explained above, until the subsidiary is disposed of or CEMEX eliminates the tax consolidation. Tax liabilities associated with the tax loss carryforwards used in the tax consolidation of the Mexican subsidiaries are not offset with deferred tax assets in the balance sheet. The realization of these tax assets is subject to the generation of future tax earnings in the controlled subsidiaries that generated the tax loss carryforwards in the past.

In addition, in connection with new amendments to the income tax law in Mexico approved in December 2013 and effective beginning January 1, 2014, the tax consolidation regime in effect until December 31, 2013, was replaced prospectively by a new integration regime, to which CEMEX will not apply, resulting in that beginning in 2014, each Mexican entity will determine its income taxes based solely in its individual results, and a period of up to 10 years has been established for the settlement of the liability for income taxes related to the tax consolidation regime accrued until December 31, 2013, amount which considering the new rules issued for the disconnection of the tax consolidation regime amounts to approximately US$1,901 million, as described in the table below.

Changes in the Parent Company’s tax payable associated with the tax consolidation in Mexico in 2013 were as follows (approximate US$ Millions):

2013

Balance at the beginning of the period $1,115

Income tax received from subsidiaries $138

Restatement for the period $95

Payments during the period ($156)

Effects of tax deconsolidation $709

Balance at the end of the period $1,901

As of December 31, 2013, the estimated payment schedule of taxes payable resulting from these changes in the tax consolidation regime in Mexico were as follows (approximate amounts in millions of US dollars):

2014 $328

2015 $380

2016 $317

2017 $316

2018 and thereafter $560

1,901

Tax Matter in Colombia

Regarding the proceeding notice that was notified to CEMEX Colombia on April 1, 2011, in which the Colombian Tax Authority rejected certain deductions taken by CEMEX Colombia in its 2009 year-end tax return for which a final determination was issued by the Colombian Tax Authority on December 15, 2011, on July 14, 2014, CEMEX Colombia was notified about an adverse resolution to the appeal filed by CEMEX Colombia on May 10, 2013, to the resolution confirming the official liquidation notified by the Colombian Tax Authorities to CEMEX Colombia on January 17, 2013. CEMEX Colombia intends to file an appeal before the Colombian Consejo de Estado by not later than July 24, 2014.

Polish Antitrust Investigation

On May 8, 2014, CEMEX Polska filed an appeal with the Appeals Court against the judgment issued in December of 2013 by the Polish Court of Competition and Consumer Protection that in turn had reduced the penalties imposed by the Polish Competition and Consumer Protection Office issued in December of 2009. The penalties are not enforceable until the Appeals Court issues its judgment.

Egypt Share Purchase Agreement

A hearing related to this matter that was scheduled to take place in April of 2014 was rescheduled to May of 2014, but was eventually not held. In the meantime, the State Commissioner Authority recommended the Administrative Court to refer the case to the Administrative Judiciary Court, a new hearing date has not been scheduled. Also, two plaintiffs, one of which is also a plaintiff under the aforementioned case, filed a lawsuit before the Administrative Judiciary Court requesting the cancellation of the resolutions taken by shareholders of the state-owned Metallurgical Industries Company pursuant to which it was agreed to sell Assiut Cement Company’s shares and therefore sign the share purchase agreement with CEMEX. Metallurgical Industries Company is the state-owned entity that in 1999 sold the Assiut Cement Company shares to CEMEX. On May 17, 2014, a hearing for this matter was held and adjourned in order for the State Commissioner to submit its report for the consideration of the Administrative Judiciary Court, a new hearing date will be scheduled once the State Commissioner submits its report.

Definitions of terms and disclosures CEMEX

Methodology for translation, consolidation, and presentation of results

Under IFRS, beginning January 1, 2008, CEMEX translates the financial statements of foreign subsidiaries using exchange rates at the reporting date for the balance sheet and the exchange rates at the end of each month for the income statement. CEMEX reports its consolidated results in Mexican pesos.

For the reader’s convenience, beginning June 30, 2008, US dollar amounts for the consolidated entity are calculated by converting the nominal Mexican peso amounts at the end of each quarter using the average MXN/US$ exchange rate for each quarter. The exchange rates used to convert results for the second quarter of 2014 and the second quarter of 2013 are 12.97 and 12.64 Mexican pesos per US dollar, respectively.

Per-country/region figures are presented in US dollars for the reader’s convenience. Figures presented in US dollars for Mexico, as of June 30, 2014, and June 30, 2013, can be converted into their original local currency amount by multiplying the US-dollar figure by the corresponding average exchange rates for 2014 and 2013, provided below.

Breakdown of regions

Northern Europe includes operations in Austria, the Czech Republic, France, Germany, Hungary, Ireland, Latvia, Poland, and the United Kingdom, as well as trading operations in several Nordic countries.

The Mediterranean region includes operations in Croatia, Egypt, Israel, Spain, and the United Arab Emirates.

The South, Central America and the Caribbean region includes CEMEX’s operations in Argentina, Bahamas, Brazil, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Haiti, Jamaica, Nicaragua, Panama, Peru, and Puerto Rico, as well as trading operations in the Caribbean region.

The Asia region includes operations in Bangladesh, China, Malaysia, the Philippines, Taiwan, and Thailand.

Definition of terms

Free cash flow equals operating EBITDA minus net interest expense, maintenance and strategic capital expenditures, change in working capital, taxes paid, and other cash items (net other expenses less proceeds from the disposal of obsolete and/or substantially depleted operating fixed assets that are no longer in operation and coupon payments on our perpetual notes).

Maintenance capital expenditures investments incurred for the purpose of ensuring the company’s operational continuity. These include capital expenditures on projects required to replace obsolete assets or maintain current operational levels, and mandatory capital expenditures, which are projects required to comply with governmental regulations or company policies.

Net debt equals total debt (debt plus convertible bonds and financial leases) minus cash and cash equivalents.

Operating EBITDA equals operating earnings before other expenses, net, plus depreciation and operating amortization.

pp equals percentage points

Prices all references to pricing initiatives, price increases or decreases, refer to our prices for our products

Strategic capital expenditures investments incurred with the purpose of increasing the company’s profitability. These include capital expenditures on projects designed to increase profitability by expanding capacity, and margin improvement capital expenditures, which are projects designed to increase profitability by reducing costs.

Working capital equals operating accounts receivable (including other current assets received as payment in kind) plus historical inventories minus operating payables.

Earnings per ADS

The number of average ADSs outstanding used for the calculation of earnings per ADS was 1,254.3 million for the second quarter of 2014; 1,241.9 million for year-to-date 2014; 1,215.6 million for the second quarter of 2013; and 1,214.6 million for year-to-date 2013. According to the IAS 33 Earnings per share, the weighted-average number of common shares outstanding is determined considering the number of days during the accounting period in which the shares have been outstanding, including shares derived from corporate events that have modified the stockholder’s equity structure during the period, such as increases in the number of shares by a public offering and the distribution of shares from stock dividends or recapitalizations of retained earnings and the potential diluted shares (Stock options, Restricted Stock Options and Mandatory Convertible Shares). The shares issued as a result of share dividends, recapitalizations and potential diluted shares are considered as issued at the beginning of the period.

Exchange rates January – June Second Quarter Second Quarter

2014 2013 2014 2013 2014 2013

Average Average Average Average End of period End of period

Mexican peso 13.1 12.63 12.97 12.64 12.97 12.96

Euro 0.7304 0.7625 0.7297 0.7661 0.7302 0.7685

British pound 0.5971 0.6516 0.5923 0.6530 0.5844 0.6573

Amounts provided in units of local currency per US dollar.