EX-2 3 d80741dex2.htm EX-2

EX-2

Exhibit 2

2015

THIRD QUARTER RESULTS

Stock Listing Information

Colombian Stock Exchange S.A. Ticker: CLH

Investor Relations

Jesús Ortiz de la Fuente +57 (1) 603-9051

E-mail: jesus.ortizd@cemex.com

OPERATING AND FINANCIAL HIGHLIGHTS

January—September Third Quarter

2015 2014% var 2015 2014% var

Consolidated cement volume 5,497 5,986(8%) 1,877 2,055(9%)

Consolidated domestic gray cement 5,035 5,327(5%) 1,728 1,827(5%)

Consolidated ready-mix volume 2,629 2,624 0% 876 954(8%)

Consolidated aggregates volume 6,548 6,499 1% 2,179 2,354(7%)

Net sales 1,102 1,324(17%) 354 460(23%)

Gross profit 521 656(21%) 165 236(30%)

as % of net sales 47.3% 49.5%(2.2pp) 46.6% 51.3%(4.7pp)

Operating earnings before other

281 372(24%) 90 136(34%)

expenses, net

as % of net sales 25.5% 28.1%(2.6pp) 25.3% 29.6%(4.3pp)

Controlling interest net income 117 209(44%) 35 88(60%)

Operating EBITDA 346 443(22%) 110 160(31%)

as % of net sales 31.4% 33.4%(2.0pp) 31.0% 34.7%(3.7pp)

Free cash flow after maintenance

188 252(25%) 51 110(53%)

capital expenditures

Free cash flow 79 212(63%) 12 82(86%)

Net debt 1,060 1,088(3%) 1,060 1,088(3%)

Total debt 1,118 1,142(2%) 1,118 1,142(2%)

Earnings per share 0.21 0.38(44%) 0.06 0.16(61%)

Shares outstanding at end of period 556 556 0% 556 556 0%

Employees 4,947 4,877 1% 4,947 4,877 1%

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-share amounts.

Shares outstanding are presented in millions.

Consolidated net sales during the third quarter of 2015 declined by 23% compared to the third quarter of 2014. During the first nine months of 2015 consolidated net sales decreased by 17%, compared to the same period in 2014. This decline in net sales is explained mainly as a result of foreign exchange fluctuations and the effect of lower cement volumes from our operations in Colombia and Panama.

Cost of sales as a percentage of net sales during the first nine months of 2015 increased by 2.2pp from 50.5% to 52.7% on a year-over-year basis.

Operating expenses as a percentage of net sales during the first nine months of 2015 increased by 0.3pp from 21.5% to 21.8% compared to the same period in 2014.

Operating EBITDA during the third quarter of 2015 declined by 31% compared to the third quarter of 2014. During the first nine months of 2015 operating EBITDA decreased by 22%, compared to the same

period in 2014.This decline is mainly explained by foreign exchange fluctuations, the effect of lower cement volumes from our operations in Colombia and Panama and scheduled maintenance works in Costa Rica and Colombia.

Operating EBITDA margin during the third quarter of 2015 declined by 3.7pp, compared to the third quarter of 2014. During the first nine months of the year operating EBITDA margin declined by 2.0pp compared with the same period last year.

Controlling interest net income during the third quarter of 2015 reached US$35 million, declining by 60% compared to the third quarter of 2014. During the first nine months of 2015 controlling interest net income reached US$117 million, declining 44% compared to the same period in 2014.

Total debt at the end of the third quarter of 2015 reached US$1,118 million.

2015 Third Quarter Results Page 2

OPERATING RESULTS

Colombia

January—September Third Quarter

2015 2014% var 2015 2014% var

Net sales 551 769(28%) 177 267(34%)

Operating EBITDA 189 281(33%) 61 100(39%)

Operating EBITDA margin 34.2% 36.5%(2.3pp) 34.4% 37.5%(3.1pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January—January—January -

Third Quarter Third Quarter Third Quarter

September September September

Volume(9%)(6%)(0%)(8%)(3%)(11%)

Price (USD)(24%)(28%)(23%)(31%)(24%)(31%)

Price (local currency) 5% 12% 5% 7% 3% 8%

Year-over-year percentage variation.

In Colombia, during the third quarter our domestic gray cement, ready-mix and aggregates volumes declined by 6%, 8% and

11%, respectively, compared to the third quarter of 2014. For the first nine months of 2015, our cement and aggregates

volumes declined by 9% and 3%, respectively, while our ready-mix volumes remained stable, compared to the same period

in 2014.

On a sequential basis, cement volumes improved by 18% and 7% compared with the first and second quarters of 2015,

respectively. The year-over-year decline in third quarter cement volume reflects a very high base of comparison—as third

quarter 2014 holds the all-time quarterly volume record—as well as our pricing increases.

Panama

January—September Third Quarter

2015 2014% var 2015 2014% var

Net sales 224 241(7%) 73 93(21%)

Operating EBITDA 92 108(16%) 30 42(29%)

Operating EBITDA margin 40.9% 44.9%(4.0pp) 41.3% 45.7%(4.4pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January—January—January -

Third Quarter Third Quarter Third Quarter

September September September

Volume(5%)(23%)(8%)(20%) 6%(1%)

Price (USD) 3% 7%(4%)(5%) 3% 4%

Price (local currency) 3% 7%(4%)(5%) 3% 4%

Year-over-year percentage variation.

In Panama during the third quarter our domestic gray cement, ready-mix and aggregates volumes declined by 23%, 20% and 1% respectively, compared to the third quarter of 2014. For the first nine months of 2015, our domestic gray cement and ready-mix volumes decreased by 5% and 8% respectively, while our aggregates volumes increased by 6%, compared with the same period in 2014.

During the quarter, the negative performance in our volumes is mainly explained by lower sales to the Panama Canal expansion project, as well as, the completion of some large infrastructure projects like “Corredor Norte” and “Parque Eólico”. Cement sales to the Panama Canal expansion project declined by 84% during the quarter on a year-over-year basis.

The positive performance of the industrial and commercial sector was not enough to offset the slowdown in the housing and infrastructure sectors during the quarter.

2015 Third Quarter Results Page 3

OPERATING RESULTS

Costa Rica

January—September Third Quarter

2015 2014% var 2015 2014% var

Net sales 131 114 15% 41 38 10%

Operating EBITDA 54 51 6% 15 18(17%)

Operating EBITDA margin 41.3% 44.9%(3.6pp) 35.7% 47.1%(11.4pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January—January—January -

Third Quarter Third Quarter Third Quarter

September September September

Volume 12% 14% 14% 12% 20%(8%)

Price (USD) 4% 0%(3%)(4%)(0%)(2%)

Price (local currency) 2%(0%)(4%)(5%)(2%)(3%)

Year-over-year percentage variation.

In Costa Rica, during the third quarter our domestic gray cement and ready-mix volumes increased by 14%, 12%,

respectively, while our aggregates volumes declined by 8%, compared to the third quarter of 2014. For the first nine months

of the year our domestic gray cement, ready-mix and aggregates volumes increased by 12%, 14% and 20%, respectively,

compared to the same period of last year.

During the third quarter infrastructure remained as the main driver for cement demand. Our cement volumes have been

positively affected by the ongoing construction of roads, as well as hydroelectric projects like “Chucás”.

Rest of CLH

January—September Third Quarter

2015 2014% var 2015 2014% var

Net sales 209 210(1%) 67 67 0%

Operating EBITDA 57 60(5%) 18 20(12%)

Operating EBITDA margin 27.5% 28.6%(1.1pp) 26.2% 29.8%(3.6pp)

In millions of US dollars, except percentages.

Domestic gray cement Ready-Mix Aggregates

January—January—January -

Third Quarter Third Quarter Third Quarter

September September September

Volume(4%) 4% 21% 21% 8% 20%

Price (USD)(4%)(9%) 0%(2%) 10% 2%

Price (local currency) 2%(0%) 2%(1%) 13% 4%

Year-over-year percentage variation.

In the Rest of CLH region, which includes our operations in Nicaragua, Guatemala, El Salvador and Brazil, during the third

quarter of 2015 our domestic gray cement, ready-mix and aggregates volumes increased by 4%, 21% and 20%, respectively,

compared to the third quarter of 2014. During the first nine months of the year, our domestic gray cement volumes

decreased by 4%, while our ready-mix and aggregates volumes increased by 21% and 8% respectively, compared to the same

period of last year.

The positive performance in our cement volumes in Nicaragua, as well as our ready-mix volumes in Guatemala were offset

by weak demand conditions in the other markets. Housing and infrastructure in Nicaragua, along with industrial-and-

commercial activity in Guatemala, remained the main drivers of demand for our products.

2015 Third Quarter Results Page 4

OPERATING EBITDA, FREE CASH FLOW AND DEBT

RELATED INFORMATION

Operating EBITDA and free cash flow

January—September Third Quarter

2015 2014% var 2015 2014% var

Operating earnings before other expenses, net 281 372(24%) 90 136(34%)

+ Depreciation and operating amortization 65 71 20 24

Operating EBITDA 346 443(22%) 110 160(31%)

—Net financial expense 58 75 17 28

—Capital expenditures for maintenance 26 38 13 12

—Change in working Capital(24)(3) 2(13)

—Taxes paid 87 81 24 22

—Other cash items (Net) 11(0) 3 0

Free cash flow after maintenance capital exp 188 252(25%) 51 110(53%)

—Strategic Capital expenditures 110 40 39 28

Free cash flow 79 212(63%) 12 82(86%)

In millions of US dollars, except percentages.

Information on Debt

Second

Third Quarter Third Quarter

Quarter

2015 2014% var 2015 2015 2014

Total debt 1, 2 1,118 1,142(2%) 1,136 Currency denomination

Short term 13% 22% 13% U.S. dollar 99% 98%

Long term 87% 78% 87% Colombian peso 1% 2%

Cash and cash equivalents 58 54 8% 59 Interest rate

Net debt 1,060 1,088(3%) 1,077 Fixed 78% 78%

Variable 22% 22%

In millions of US dollars, except percentages.

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

2 Represents the consolidated balances of CLH and subsidiaries.

2015 Third Quarter Results Page 5

OPERATING RESULTS

Income statement & balance sheet

CEMEX Latam Holdings, S.A. and Subsidiaries

in thousands of U.S. Dollars, except per share amounts

January—September Third Quarter

INCOME STATEMENT 2015 2014% var 2015 2014% var

Net sales 1,102,080 1,324,298(17%) 354,481 460,343(23%)

Cost of sales(580,765)(668,294) 13%(189,130)(224,144) 16%

Gross profit 521,315 656,004(21%) 165,351 236,199(30%)

Operating expenses(239,849)(284,088) 16%(75,558)(99,870) 24%

Operating earnings before other expenses, net 281,466 371,916(24%) 89,793 136,329(34%)

Other expenses, net(12,907)(3,863)(234%)(5,792)(4,383)(32%)

Operating earnings 268,559 368,053(27%) 84,001 131,946(36%)

Financial expenses(58,272)(75,220) 23%(17,708)(27,593) 36%

Other income (expenses), net(17,922) 5,564 N/A(15,893) 9,869 N/A

Net income before income taxes 192,365 298,397(36%) 50,400 114,222(56%)

Income tax(74,826)(88,593) 16%(15,594)(25,976) 40%

Consolidated net income 117,539 209,804(44%) 34,806 88,246(61%)

Non-controlling Interest Net Income(415)(851) 51%(108)(459) 76%

Controlling Interest Net Income 117,124 208,953(44%) 34,698 87,787(60%)

0 0

Operating EBITDA 346,283 442,839(22%) 109,935 159,766(31%)

Earnings per share 0.21 0.38(44%) 0.06 0.16(61%)

as of September 30

BALANCE SHEET 2015 2014% var

Total Assets 3,267,748 3,751,678(13%)

Cash and Temporary Investments 58,448 53,870 8%

Trade Accounts Receivables 105,045 168,361(38%)

Other Receivables 47,950 107,901(56%)

Inventories 91,687 107,516(15%)

Other Current Assets 15,248 21,375(29%)

Current Assets 318,378 459,023(31%)

Fixed Assets 1,053,680 1,183,659(11%)

Other Assets 1,895,690 2,108,996(10%)

Total Liabilities 1,924,171 2,276,070(15%)

Current Liabilities 404,602 689,166(41%)

Long-Term Liabilities 1,509,945 1,573,821(4%)

Other Liabilities 9,624 13,083(26%)

Consolidated Stockholders’ Equity 1,343,577 1,475,608(9%)

Non-controlling Interest 5,214 6,256(17%)

Stockholders’ Equity Attributable to Controlling Interest 1,338,363 1,469,352(9%)

2015 Third Quarter Results Page 6

OPERATING RESULTS

Income statement & balance sheet

CEMEX Latam Holdings, S.A. and Subsidiaries

in millions of Colombian Pesos in nominal terms, except per share amounts

January—September Third Quarter

INCOME STATEMENT 2015 2014% var 2015 2014% var

Net sales 2,952,371 2,584,581 14% 1,073,967 893,329 20%

Cost of sales(1,555,817)(1,304,287)(19%)(573,004)(434,828)(32%)

Gross profit 1,396,554 1,280,294 9% 500,963 458,501 9%

Operating expenses(642,533)(554,444)(16%)(228,917)(193,828)(18%)

Operating earnings before other expenses, net 754,021 725,850 4% 272,046 264,673 3%

Other expenses, net(34,577)(7,540)(359%)(17,549)(8,557)(105%)

Operating earnings 719,444 718,310 0% 254,497 256,116(1%)

Financial expenses(156,106)(146,804)(6%)(53,649)(53,571)(0%)

Other income (expenses), net(48,012) 10,859 N/A(48,150) 19,287 N/A

Net income before income taxes 515,326 582,365(12%) 152,698 221,832(31%)

Income tax(200,452)(172,901)(16%)(47,245)(50,324) 6%

Consolidated net income 314,874 409,464(23%) 105,453 171,508(39%)

Non-controlling Interest Net Income(1,111)(1,658) 33%(327)(891) 63%

Controlling Interest Net Income 313,763 407,806(23%) 105,126 170,617(38%)

Operating EBITDA 927,660 864,267 7% 333,069 309,920 7%

Earnings per share 566.16 736.37(23%) 189.61 306.27(38%)

as of September 30

BALANCE SHEET 2015 2014% var

Total Assets 10,201,715 7,610,204 34%

Cash and Temporary Investments 182,470 109,274 67%

Trade Accounts Receivables 327,945 341,518(4%)

Other Receivables 149,697 218,874(32%)

Inventories 286,241 218,093 31%

Other Current Assets 47,604 43,359 10%

Current Assets 993,957 931,118 7%

Fixed Assets 3,289,526 2,401,028 37%

Other Assets 5,918,232 4,278,058 38%

Total Liabilities 6,007,148 4,616,962 30%

Current Liabilities 1,263,142 1,397,961(10%)

Long-Term Liabilities 4,713,959 3,192,463 48%

Other Liabilities 30,047 26,538 13%

Consolidated Stockholders’ Equity 4,194,567 2,993,242 40%

Non-controlling Interest 16,278 12,689 28%

Stockholders’ Equity Attributable to Controlling Interest 4,178,288 2,980,553 40%

2015 Third Quarter Results Page 7

OPERATING RESULTS

Operating Summary per Country

in thousands of U.S. dollars

Operating EBITDA margin as a percentage of net sales

January—September Third Quarter

2015 2014% var 2015 2014% var

NET SALES

Colombia 551,323 768,629(28%) 177,065 266,692(34%)

Panama 223,916 241,262(7%) 72,973 92,577(21%)

Costa Rica 130,959 113,730 15% 41,476 37,733 10%

Rest of CLH 208,549 210,157(1%) 67,208 66,930 0%

Others and intercompany eliminations(12,667)(9,480)(34%)(4,241)(3,589)(18%)

TOTAL 1,102,080 1,324,298(17%) 354,481 460,343(23%)

GROSS PROFIT

Colombia 263,103 385,990(32%) 83,522 133,594(37%)

Panama 102,703 118,353(13%) 33,979 46,912(28%)

Costa Rica 68,767 61,561 12% 19,134 21,210(10%)

Rest of CLH 75,274 75,769(1%) 24,352 25,552(5%)

Others and intercompany eliminations 11,468 14,331(20%) 4,364 8,931(51%)

TOTAL 521,315 656,004(21%) 165,351 236,199(30%)

OPERATING EARNINGS BEFORE OTHER EXPENSES, NET

Colombia 168,556 253,865(34%) 54,847 90,660(40%)

Panama 77,549 95,472(19%) 25,404 38,035(33%)

Costa Rica 49,260 45,857 7% 13,232 15,989(17%)

Rest of CLH 53,569 56,206(5%) 16,449 18,766(12%)

Others and intercompany eliminations(67,468)(79,484) 15%(20,139)(27,121) 26%

TOTAL 281,466 371,916(24%) 89,793 136,329(34%)

OPERATING EBITDA

Colombia 188,502 280,678(33%) 60,920 99,886(39%)

Panama 91,526 108,343(16%) 30,143 42,331(29%)

Costa Rica 54,066 51,121 6% 14,814 17,755(17%)

Rest of CLH 57,247 60,009(5%) 17,590 19,954(12%)

Others and intercompany eliminations(45,058)(57,312) 21%(13,532)(20,160) 33%

TOTAL 346,283 442,839(22%) 109,935 159,766(31%)

OPERATING EBITDA MARGIN

Colombia 34.2% 36.5% 34.4% 37.5%

Panama 40.9% 44.9% 41.3% 45.7%

Costa Rica 41.3% 44.9% 35.7% 47.1%

Rest of CLH 27.5% 28.6% 26.2% 29.8%

TOTAL 31.4% 33.4% 31.0% 34.7%

2015 Third Quarter Results Page 8

OPERATING RESULTS

Volume Summary

Consolidated volume summary

Cement and aggregates in thousands of metric tons

Ready-mix in thousands of cubic meters

January—September Third Quarter

2015 2014% var 2015 2014% var

Total cement volume 1 5,497 5,986(8%) 1,877 2,055(9%)

Total domestic gray cement volume 5,035 5,327(5%) 1,728 1,827(5%)

Total ready-mix volume 2,629 2,624 0% 876 954(8%)

Total aggregates volume 6,548 6,499 1% 2,179 2,354(7%)

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

Per-country volume summary

January—September Third Quarter Third Quarter 2015

2015 vs. 2014 2015 vs. 2014 vs. Second Quarter 2015

DOMESTIC GRAY CEMENT

Colombia(9%)(6%) 7%

Panama(5%)(23%)(11%)

Costa Rica 12% 14%(9%)

Rest of CLH(4%) 4%(1%)

READY-MIX

Colombia(0%)(8%)(4%)

Panama(8%)(20%) 1%

Costa Rica 14% 12%(17%)

Rest of CLH 21% 21% 7%

AGGREGATES

Colombia(3%)(11%)(6%)

Panama 6%(1%) 3%

Costa Rica 20%(8%)(22%)

Rest of CLH 8% 20% 39%

2015 Third Quarter Results Page 9

OPERATING RESULTS

Price Summary

Variation in U.S. dollars

January—September Third Quarter Third Quarter 2015

2015 vs. 2014 2015 vs. 2014 vs. Second Quarter 2015

DOMESTIC GRAY CEMENT

Colombia(24%)(28%)(12%)

Panama 3% 7% 2%

Costa Rica 4% 0%(2%)

Rest of CLH(4%)(9%)(4%)

READY-MIX

Colombia(23%)(31%)(15%)

Panama(4%)(5%)(0%)

Costa Rica(3%)(4%)(3%)

Rest of CLH 0%(2%)(2%)

AGGREGATES

Colombia(24%)(31%)(16%)

Panama 3% 4%(0%)

Costa Rica(0%)(2%)(7%)

Rest of CLH 10% 2%(11%)

Fo r Rest o f CLH, volume-weighted average prices.

Variation in local currency

January—September Third Quarter Third Quarter 2015

2015 vs. 2014 2015 vs. 2014 vs. Second Quarter 2015

DOMESTIC GRAY CEMENT

Colombia 5% 12% 7%

Panama 3% 7% 2%

Costa Rica 2%(0%)(1%)

Rest of CLH 2%(0%)(1%)

READY-MIX

Colombia 5% 7% 2%

Panama(4%)(5%)(0%)

Costa Rica(4%)(5%)(3%)

Rest of CLH 2%(1%)(2%)

AGGREGATES

Colombia 3% 8% 2%

Panama 3% 4%(0%)

Costa Rica(2%)(3%)(7%)

Rest of CLH 13% 4%(10%)

For Rest o f CLH, volume-weighted average prices.

2015 Third Quarter Results Page 10

OTHER ACTIVITIES AND INFORMATION

Cemex latam holdings announced senior level organizational changes

CEMEX Latam Holdings, S.A. (“CLH”) (BVC: CLH), announced changes to its senior level organization.

? Guillermo Rojo has been appointed Director of CEMEX Guatemala ? Guillermo García has been appointed Director of CEMEX Brazil

The rest of the operational and corporate staff functions at CLH will remain unchanged.

Cemex latam holdings inaugurated cement grinding mill in Nicaragua

CEMEX Latam Holdings, S.A. (“CLH”) (BVC: CLH) announced that it has completed the construction of the first phase of a new cement grinding plant in Ciudad Sandino, Managua. CLH invested approximately U.S.$30 million for infrastructure procurement and the installation of the first

cement grinding mill, with an annual production capacity of approximately 220,000 metric tons. The inauguration ceremony took place this Thursday, August 27, at the new facility and was attended by the President of Nicaragua, Daniel Ortega; the Chief Executive Officer of CEMEX, Fernando A. Gonzalez; the Chairman of the Board of Directors of CLH, Jaime Elizondo; and the Director of CEMEX Nicaragua, Yuri de los Santos. The second phase, which is expected to be completed by the end of 2017, will include the installation of a second cement grinding mill with an additional annual production capacity of approximately 220,000 metric tons and an additional investment of approximately U.S.$25 million. Upon completion of the second phase, CEMEX Nicaragua is expected to reach an estimated total annual cement production capacity of approximately 860,000 metric tons. “This investment reflects the commitment that CEMEX Latam Holdings has with the Nicaraguan market. We are optimistic about the national economic outlook and will strive to continue being a reliable supplier in the country given the growing need for high quality building materials across all construction sectors,” said Jaime Elizondo.

2015 Third Quarter Results Page 11

DEFINITIONS OF TERMS AND DISCLOSURES

Methodology for translation and presentation of results

Under IFRS, CLH reports its consolidated results in its functional currency, which is the US Dollar, by translating the financial statements of foreign subsidiaries using the corresponding exchange rate at the reporting date for the balance sheet and the corresponding exchange rates at the end of each month for the income statement.

For the reader’s convenience, Colombian peso amounts for the consolidated entity are calculated by converting the US dollar amounts using the closing COP/US$ exchange rate at the reporting date for balance sheet purposes, and the average COP/US$ exchange rate for the corresponding period for income statement purposes. The exchange rates used to convert: (i) the balance sheet as of September 30, 2015 and September 30, 2014 was $3,121.94 and $2,028.48 Colombian pesos per US dollar, respectively, and (ii) the consolidated results for the third quarter of 2015 and for the third quarter of 2014 were $3,029.69 and $1,939.84 Colombian pesos per US dollar, respectively.

Per-country/region selected financial information of the income statement is presented before corporate charges and royalties which are included under “other and intercompany eliminations.”

Consolidated financial information

When reference is made to consolidated financial information means the financial information of CLH together with its consolidated subsidiaries.

Presentation of financial and operating information

Individual information is provided for Colombia, Panama and Costa Rica.

Countries in Rest of CLH include Nicaragua, Guatemala, El Salvador and Brazil.

Exchange rates

January—September January—September Third Quarter

2015 closing 2014 closing 2015 average 2014 average 2015 average 2014 average

Colombian peso 3,121.94 2,028.48 2,678.91 1,951.66 3,029.69 1,939.84

Panama balboa 1.00 1.00 1.00 1.00 1.00 1.00

Costa Rica colon 541.04 545.52 540.84 547.36 541.10 544.93

Euro 1.1174 0.7917 1.1085 0.7421 1.1100 0.7655

Amounts provided in units of local currency per US dollar.

2015 Third Quarter Results Page 12

DEFINITIONS OF TERMS AND DISCLOSURES

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).

Maintenance capital expenditures investments incurred for the purpose of ensuring CLH’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 internal policies.

Net debt equals total debt minus cash and cash equivalents.

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

pp equals percentage points.

Strategic capital expenditures investments incurred with the purpose of increasing CLH’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.

2015 Third Quarter Results Page 13