EX-99.2 3 d921214dex992.htm EXHIBIT 2 - CHP 1Q20 REPORT

Exhibit 2

2020
FIRST QUARTER RESULTS
Stock Listing Information
Philippine Stock Exchange
Ticker: CHP
Investor Relations
+ 632 8849 3600
E-Mail:
chp.ir@cemex.com

Operating and Financial Highlights |  |

|  | January – March |  |  | First Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 5,630 |  |  |  | 6,237 |  |  |  | (10 | %) |  |  | 5,630 |  |  |  | 6,237 |  |  |  | (10 | %)
Gross profit |  |  | 2,354 |  |  |  | 2,313 |  |  |  | 2 | % |  |  | 2,354 |  |  |  | 2,313 |  |  |  | 2 | %
as % of net sales |  |  | 42 | % |  |  | 37 | % |  |  | 5pp |  |  |  | 42 | % |  |  | 37 | % |  |  | 5pp |
Operating earnings before other income, net |  |  | 521 |  |  |  | 625 |  |  |  | (17 | %) |  |  | 521 |  |  |  | 625 |  |  |  | (17 | %)
as % of net sales |  |  | 9 | % |  |  | 10 | % |  |  | (1pp | ) |  |  | 9 | % |  |  | 10 | % |  |  | (1pp | )
Controlling Interest Net Income |  |  | 89 |  |  |  | 169 |  |  |  | (47 | %) |  |  | 89 |  |  |  | 169 |  |  |  | (47 | %)
Operating EBITDA |  |  | 1,082 |  |  |  | 1,096 |  |  |  | (1 | %) |  |  | 1,082 |  |  |  | 1,096 |  |  |  | (1 | %)
as % of net sales |  |  | 19.2 | % |  |  | 17.6 | % |  |  | 1.7pp |  |  |  | 19.2 | % |  |  | 17.6 | % |  |  | 1.7pp |
Free cash flow after maintenance capital expenditures |  |  | 312 |  |  |  | 848 |  |  |  | (63 | %) |  |  | 312 |  |  |  | 848 |  |  |  | (63 | %)
Free cash flow |  |  | (1,140 | ) |  |  | 783 |  |  |  | N/A |  |  |  | (1,140 | ) |  |  | 783 |  |  |  | N/A |
Net debt1 |  |  | 7,147 |  |  |  | 17,396 |  |  |  | (59 | %) |  |  | 7,147 |  |  |  | 17,396 |  |  |  | (59 | %)
Total debt1 |  |  | 13,481 |  |  |  | 21,281 |  |  |  | (37 | %) |  |  | 13,481 |  |  |  | 21,281 |  |  |  | (37 | %)
Earnings per share2 |  |  | 0.01 |  |  |  | 0.03 |  |  |  | (67 | %) |  |  | 0.01 |  |  |  | 0.03 |  |  |  | (67 | %)

In millions of Philippine Pesos, except percentages and earnings per share

1 | U.S. dollar debt converted using end-of-period exchange rate. See Debt Information on page 4 and Exchange Rates on page 8 for more detail.

2 | In Philippine Pesos

Net sales in the first quarter of 2020 decreased by 10% compared with the first quarter of 2019 due to lower volumes and lower prices.

Cost of sales was at 58% of sales during the first quarter of 2020 compared with 63% in the same period of 2019, a decrease of 5 pp on a year-over-year basis.

Costs in the same period in 2019 costs were affected by scheduled kiln maintenance of Solid Cement Plant, higher sales from cement imports, and consumption of purchased clinker in cement production, carried over as a result of the Naga landslide.

Fuel costs was at 24% of cost of sales, 6 pp higher on a year-over-year basis. Power costs remained flat at 18% of cost of sales. Absolute power costs decreased due to lower electricity prices and a rebate from the wholesale electricity spot market.

Operating expenses, as a percentage of sales, during the first quarter increased by 5 pp compared with the same period in 2019.

Distribution expenses was at 19% of sales during the first quarter of 2020, an increase of 4 pp year-over-year. Costs in the same period in 2019 considers higher sales sourced from cement imports, an effect of the Naga landslide incident.

Selling and administrative expenses was at 14% of sales during the first quarter of 2020, 2 pp higher year-over-year, due to lower sales

Operating EBITDA in the first quarter decreased by 1% year-over-year as March 2020 was impacted by the effects of COVID-19 quarantine measures.

Operating EBITDA margin in the first quarter of 2020 was at 19.2%, 1.7 pp higher compared to the same period in 2019.

Costs in the same period in 2019 costs were affected by scheduled kiln maintenance of Solid Cement Plant, higher sales from cement imports, and consumption of purchased clinker in cement production, carried over as a result of the Naga landslide.

Controlling interest net income in the first quarter decreased by 47% year-over-year due to lower operating earnings mostly as a result of COVID-19 community quarantine measures beginning mid-March 2020.

Total debt at the end of March 2020 was at PHP 13,481 million, of which PHP 11,392 million pertained to debt owed to BDO Unibank, Inc.

2020 First Quarter Results |  | Page 2

Operating Results |  |

Domestic Gray Cement |  | January - March |  |  | First Quarter |  |  | First Quarter 2020 |
|  | 2020 vs. 2019 |  |  | 2020 vs. 2019 |  |  | vs. Fourth Quarter 2019 |
Volume |  |  | (4 | %) |  |  | (4 | %) |  |  | 9 | %
Price in PHP |  |  | (6 | %) |  |  | (6 | %) |  |  | (3 | %)

Our domestic cement volumes decreased by 4% year-over-year during the first quarter of 2020. An 8% increase in volumes during the first two months of the year was offset by the effects of the Enhanced Community Quarantine in Luzon, and other quarantine measures around the country during the second half of March 2020.

Our domestic cement prices were 6% lower year-over-year during the first quarter of 2020, reflecting declines during the second half of 2019 due to competitive dynamics.

2020 First Quarter Results |  | Page 3

Operating EBITDA, Free Cash Flow and Debt Information |  |

Operating EBITDA and Free Cash Flow

|  | January - March |  |  | First Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Operating earnings before other expenses, net |  |  | 521 |  |  |  | 625 |  |  |  | (17 | %) |  |  | 521 |  |  |  | 625 |  |  |  | (17 | %)
+ Depreciation and operating amortization |  |  | 562 |  |  |  | 471 |  |  |  |  |  |  |  | 562 |  |  |  | 471 |  |  |  |  |
Operating EBITDA |  |  | 1,082 |  |  |  | 1,096 |  |  |  | (1 | %) |  |  | 1,082 |  |  |  | 1,096 |  |  |  | (1 | %)
- Net financial expenses |  |  | 280 |  |  |  | 355 |  |  |  |  |  |  |  | 280 |  |  |  | 355 |  |  |  |  |
- Maintenance capital expenditures |  |  | 49 |  |  |  | 90 |  |  |  |  |  |  |  | 49 |  |  |  | 90 |  |  |  |  |
- Change in working capital |  |  | 332 |  |  |  | (283 | ) |  |  |  |  |  |  | 332 |  |  |  | (283 | ) |  |  |  |
- Income taxes paid |  |  | 122 |  |  |  | 92 |  |  |  |  |  |  |  | 122 |  |  |  | 92 |  |  |  |  |
- Other cash items (net) |  |  | (12 | ) |  |  | (6 | ) |  |  |  |  |  |  | (12 | ) |  |  | (6 | ) |  |  |  |
Free cash flow after maintenance capital expenditures |  |  | 312 |  |  |  | 848 |  |  |  | (63 | %) |  |  | 312 |  |  |  | 848 |  |  |  | (63 | %)
- Strategic capital expenditures |  |  | 1,452 |  |  |  | 65 |  |  |  |  |  |  |  | 1,452 |  |  |  | 65 |  |  |  |  |
Free cash flow |  |  | (1,140 | ) |  |  | 783 |  |  |  | N/A |  |  |  | (1,140 | ) |  |  | 783 |  |  |  | N/A |

In millions of Philippine Pesos

Debt Information

|  |  |  |  | First Quarter |  |  |  |  |  | Fourth Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2019 |
Total debt(1)(2) |  |  | 13,481 |  |  |  | 21,281 |  |  |  | (37 | %) |  |  | 20,063 |
Short term |  |  | 5 | % |  |  | 8 | % |  |  |  |  |  |  | 9 | %
Long term |  |  | 95 | % |  |  | 92 | % |  |  |  |  |  |  | 91 | %
Cash and cash equivalents |  |  | 6,334 |  |  |  | 3,885 |  |  |  | 63 | % |  |  | 1,399 |
Net debt |  |  | 7,147 |  |  |  | 17,396 |  |  |  | (59 | %) |  |  | 18,664 |
Leverage Ratio(3) |  |  | 3.20 |  |  |  |  |  |  |  |  |  |  |  | 3.47 |
Coverage Ratio(3) |  |  | 4.08 |  |  |  |  |  |  |  |  |  |  |  | 3.73 |

|  | First Quarter |
|  | 2020 |  |  | 2019 |
Currency denomination |  |  |  |  |  |  |  |
U.S. dollar |  |  | 4 | % |  |  | 26 | %
Philippine peso |  |  | 96 | % |  |  | 74 | %
Interest rate |  |  |  |  |  |  |  |
Fixed |  |  | 56 | % |  |  | 41 | %
Variable |  |  | 44 | % |  |  | 59 | %

In millions of Philippine Pesos, except percentages

(1) | U.S. dollar debt converted using end-of-period exchange rate. See Exchange Rates on page 8 for more detail.

(2) | Includes leases, in accordance with Philippine Financial Reporting Standards (PFRS).

(3) | Based on BDO Loan Facility financial covenants which we are required to comply commencing in June 2020.

2020 First Quarter Results |  | Page 4

Financial Results |  |

Income Statement & Balance Sheet Information

CEMEX Holdings Philippines, Inc.

(Thousands of Philippine Pesos in nominal terms, except per share amounts)

|  | January – March |  |  | First Quarter |
INCOME STATEMENT |  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 5,629,916 |  |  |  | 6,237,427 |  |  |  | (10 | %) |  |  | 5,629,916 |  |  |  | 6,237,427 |  |  |  | (10 | %)
Cost of sales |  |  | (3,275,817 | ) |  |  | (3,924,246 | ) |  |  | 17 | % |  |  | (3,275,817 | ) |  |  | (3,924,246 | ) |  |  | 17 | %
Gross profit |  |  | 2,354,099 |  |  |  | 2,313,181 |  |  |  | 2 | % |  |  | 2,354,099 |  |  |  | 2,313,181 |  |  |  | 2 | %
Selling and Administrative expenses |  |  | (767,455 | ) |  |  | (735,596 | ) |  |  | (4 | %) |  |  | (767,455 | ) |  |  | (735,596 | ) |  |  | (4 | %)
Distribution expenses |  |  | (1,065,804 | ) |  |  | (952,950 | ) |  |  | (12 | %) |  |  | (1,065,804 | ) |  |  | (952,950 | ) |  |  | (12 | %)
Operating earnings before other expenses, net |  |  | 520,840 |  |  |  | 624,635 |  |  |  | (17 | %) |  |  | 520,840 |  |  |  | 624,635 |  |  |  | (17 | %)
Other income (expenses), net |  |  | 12,094 |  |  |  | 6,392 |  |  |  | 89 | % |  |  | 12,094 |  |  |  | 6,392 |  |  |  | 89 | %
Operating earnings (loss) |  |  | 532,934 |  |  |  | 631,027 |  |  |  | (16 | %) |  |  | 532,934 |  |  |  | 631,027 |  |  |  | (16 | %)
Financial expenses, net |  |  | (279,540 | ) |  |  | (355,236 | ) |  |  | 21 | % |  |  | (279,540 | ) |  |  | (355,236 | ) |  |  | 21 | %
Foreign exchange gain (loss), net |  |  | (66,411 | ) |  |  | (17,276 | ) |  |  | (284 | %) |  |  | (66,411 | ) |  |  | (17,276 | ) |  |  | (284 | %)
Net income (loss) before income taxes |  |  | 186,983 |  |  |  | 258,515 |  |  |  | (28 | %) |  |  | 186,983 |  |  |  | 258,515 |  |  |  | (28 | %)
Income tax benefit (expenses) |  |  | (97,861 | ) |  |  | (89,876 | ) |  |  | (9 | %) |  |  | (97,861 | ) |  |  | (89,876 | ) |  |  | (9 | %)
Consolidated net income (loss) |  |  | 89,122 |  |  |  | 168,639 |  |  |  | (47 | %) |  |  | 89,122 |  |  |  | 168,639 |  |  |  | (47 | %)
Non-controlling interest net income (loss) |  |  | 8 |  |  |  | 7 |  |  |  | 14 | % |  |  | 8 |  |  |  | 7 |  |  |  | 14 | %
Controlling Interest net income (loss) |  |  | 89,131 |  |  |  | 168,646 |  |  |  | (47 | %) |  |  | 89,131 |  |  |  | 168,646 |  |  |  | (47 | %)
Operating EBITDA |  |  | 1,082,436 |  |  |  | 1,095,935 |  |  |  | (1 | %) |  |  | 1,082,436 |  |  |  | 1,095,935 |  |  |  | (1 | %)
Earnings per share |  |  | 0.01 |  |  |  | 0.03 |  |  |  | (67 | %) |  |  | 0.01 |  |  |  | 0.03 |  |  |  | (67 | %)

|  | as of March 31 |  |  |  |  |  | as of December 31 |
BALANCE SHEET |  | 2020 |  |  | 2019 |  |  | % Var |  |  | 2019 |  |  | % Var |
Total Assets |  |  | 64,327,986 |  |  |  | 59,890,672 |  |  |  | 7 | % |  |  | 58,806,177 |  |  |  | 9 | %
Cash and Temporary Investments |  |  | 6,334,330 |  |  |  | 3,885,268 |  |  |  | 63 | % |  |  | 1,399,180 |  |  |  | 353 | %
Derivative Asset |  |  | 0 |  |  |  | 17,020 |  |  |  | (100 | %) |  |  | 0 |  |  |  |  |
Trade Accounts Receivables |  |  | 1,112,654 |  |  |  | 1,082,287 |  |  |  | 3 | % |  |  | 892,951 |  |  |  | 25 | %
Other Receivables |  |  | 53,497 |  |  |  | 90,123 |  |  |  | (41 | %) |  |  | 92,993 |  |  |  | (42 | %)
Insurance Claims and Premium Receivables |  |  | 92,662 |  |  |  | 638,466 |  |  |  | (85 | %) |  |  | 445,535 |  |  |  | (79 | %)
Inventories |  |  | 2,995,714 |  |  |  | 3,447,227 |  |  |  | (13 | %) |  |  | 3,013,444 |  |  |  | (1 | %)
Assets Held for Sale |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  |  |
Other Current Assets |  |  | 1,515,137 |  |  |  | 1,551,919 |  |  |  | (2 | %) |  |  | 1,672,392 |  |  |  | (9 | %)
Current Assets |  |  | 12,103,994 |  |  |  | 10,712,310 |  |  |  | 13 | % |  |  | 7,516,495 |  |  |  | 61 | %
Fixed Assets |  |  | 20,947,637 |  |  |  | 17,472,779 |  |  |  | 20 | % |  |  | 19,937,723 |  |  |  | 5 | %
Investments in an Associate and Other Investments |  |  | 14,097 |  |  |  | 14,097 |  |  |  | 0 | % |  |  | 14,097 |  |  |  | 0 | %
Other Assets and Noncurrent Accounts Receivables |  |  | 882,515 |  |  |  | 974,819 |  |  |  | (9 | %) |  |  | 837,151 |  |  |  | 5 | %
Advances to Contractors |  |  | 1,458,603 |  |  |  | 2,069,601 |  |  |  | (30 | %) |  |  | 1,606,397 |  |  |  | (9 | %)
Deferred Income Taxes - net |  |  | 1,061,446 |  |  |  | 787,372 |  |  |  | 35 | % |  |  | 1,034,620 |  |  |  | 3 | %
Goodwill |  |  | 27,859,694 |  |  |  | 27,859,694 |  |  |  | 0 | % |  |  | 27,859,694 |  |  |  | 0 | %
Other Assets |  |  | 31,276,355 |  |  |  | 31,705,583 |  |  |  | (1 | %) |  |  | 31,351,959 |  |  |  | (0 | %)
Total Liabilities |  |  | 21,939,210 |  |  |  | 30,985,907 |  |  |  | (29 | %) |  |  | 29,140,690 |  |  |  | (25 | %)
Current Liabilities |  |  | 8,383,231 |  |  |  | 10,651,666 |  |  |  | (21 | %) |  |  | 10,136,812 |  |  |  | (17 | %)
Long-Term Liabilities |  |  | 11,152,261 |  |  |  | 17,657,643 |  |  |  | (37 | %) |  |  | 16,549,640 |  |  |  | (33 | %)
Deferred Tax Liability |  |  | 1,624 |  |  |  | 129,657 |  |  |  | (99 | %) |  |  | 1,587 |  |  |  | 2 | %
Other Liabilities |  |  | 2,402,094 |  |  |  | 2,546,941 |  |  |  | (6 | %) |  |  | 2,452,651 |  |  |  | (2 | %)
Consolidated Stockholders’ Equity |  |  | 42,388,776 |  |  |  | 28,904,765 |  |  |  | 47 | % |  |  | 29,665,487 |  |  |  | 43 | %
Non-controlling Interest |  |  | 162 |  |  |  | 186 |  |  |  | (13 | %) |  |  | 170 |  |  |  | (5 | %)
Stockholders’ Equity Attributable to Controlling Interest |  |  | 42,388,614 |  |  |  | 28,904,579 |  |  |  | 47 | % |  |  | 29,665,317 |  |  |  | 43 | %

2020 First Quarter Results |  | Page 5

Financial Results |  |

Income Statement & Balance Sheet Information

CEMEX Holdings Philippines, Inc.

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

|  | January - March |  |  | First Quarter |
INCOME STATEMENT |  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 110,767 |  |  |  | 119,705 |  |  |  | (7 | %) |  |  | 110,767 |  |  |  | 119,705 |  |  |  | (7 | %)
Cost of sales |  |  | (64,451 | ) |  |  | (75,312 | ) |  |  | 14 | % |  |  | (64,451 | ) |  |  | (75,312 | ) |  |  | 14 | %
Gross profit |  |  | 46,316 |  |  |  | 44,393 |  |  |  | 4 | % |  |  | 46,316 |  |  |  | 44,393 |  |  |  | 4 | %
Selling and Administrative expenses |  |  | (15,099 | ) |  |  | (14,118 | ) |  |  | (7 | %) |  |  | (15,099 | ) |  |  | (14,118 | ) |  |  | (7 | %)
Distribution expenses |  |  | (20,969 | ) |  |  | (18,288 | ) |  |  | (15 | %) |  |  | (20,969 | ) |  |  | (18,288 | ) |  |  | (15 | %)
Operating earnings before other expenses, net |  |  | 10,248 |  |  |  | 11,987 |  |  |  | (15 | %) |  |  | 10,248 |  |  |  | 11,987 |  |  |  | (15 | %)
Other income (expenses), net |  |  | 238 |  |  |  | 123 |  |  |  | 93 | % |  |  | 238 |  |  |  | 123 |  |  |  | 93 | %
Operating earnings (loss) |  |  | 10,486 |  |  |  | 12,110 |  |  |  | (13 | %) |  |  | 10,486 |  |  |  | 12,110 |  |  |  | (13 | %)
Financial expenses, net |  |  | (5,500 | ) |  |  | (6,817 | ) |  |  | 19 | % |  |  | (5,500 | ) |  |  | (6,817 | ) |  |  | 19 | %
Foreign exchange gain (loss), net |  |  | (1,307 | ) |  |  | (332 | ) |  |  | (294 | %) |  |  | (1,307 | ) |  |  | (332 | ) |  |  | (294 | %)
Net income (loss) before income taxes |  |  | 3,679 |  |  |  | 4,961 |  |  |  | (26 | %) |  |  | 3,679 |  |  |  | 4,961 |  |  |  | (26 | %)
Income tax benefit (expenses) |  |  | (1,925 | ) |  |  | (1,725 | ) |  |  | (12 | %) |  |  | (1,925 | ) |  |  | (1,725 | ) |  |  | (12 | %)
Consolidated net income (loss) |  |  | 1,754 |  |  |  | 3,236 |  |  |  | (46 | %) |  |  | 1,754 |  |  |  | 3,236 |  |  |  | (46 | %)
Non-controlling interest net income (loss) |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  | 0 |  |  |  |  |
Controlling Interest net income (loss) |  |  | 1,754 |  |  |  | 3,236 |  |  |  | (46 | %) |  |  | 1,754 |  |  |  | 3,236 |  |  |  | (46 | %)
Operating EBITDA |  |  | 21,297 |  |  |  | 21,033 |  |  |  | 1 | % |  |  | 21,297 |  |  |  | 21,033 |  |  |  | 1 | %

|  | as of March 31 |  |  |  |  |  | as of December 31 |
BALANCE SHEET |  | 2020 |  |  | 2019 |  |  | % Var |  |  | 2019 |  |  | % Var |
Total Assets |  |  | 1,269,296 |  |  |  | 1,140,775 |  |  |  | 11 | % |  |  | 1,161,259 |  |  |  | 9 | %
Cash and Temporary Investments |  |  | 124,987 |  |  |  | 74,005 |  |  |  | 69 | % |  |  | 27,630 |  |  |  | 352 | %
Derivative Asset |  |  | 0 |  |  |  | 324 |  |  |  | (100 | %) |  |  | 0 |  |  |  |  |
Trade Accounts Receivables |  |  | 21,954 |  |  |  | 20,615 |  |  |  | 6 | % |  |  | 17,633 |  |  |  | 25 | %
Other Receivables |  |  | 1,056 |  |  |  | 1,717 |  |  |  | (38 | %) |  |  | 1,836 |  |  |  | (42 | %)
Insurance Claims and Premium Receivables |  |  | 1,828 |  |  |  | 12,161 |  |  |  | (85 | %) |  |  | 8,798 |  |  |  | (79 | %)
Inventories |  |  | 59,110 |  |  |  | 65,661 |  |  |  | (10 | %) |  |  | 59,507 |  |  |  | (1 | %)
Assets Held for Sale |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  |  |
Other Current Assets |  |  | 29,896 |  |  |  | 29,560 |  |  |  | 1 | % |  |  | 33,025 |  |  |  | (9 | %)
Current Assets |  |  | 238,831 |  |  |  | 204,043 |  |  |  | 17 | % |  |  | 148,429 |  |  |  | 61 | %
Fixed Assets |  |  | 413,331 |  |  |  | 332,815 |  |  |  | 24 | % |  |  | 393,715 |  |  |  | 5 | %
Investments in an Associate and Other Investments |  |  | 278 |  |  |  | 269 |  |  |  | 3 | % |  |  | 278 |  |  |  | 0 | %
Other Assets and Noncurrent Accounts Receivables |  |  | 17,413 |  |  |  | 18,568 |  |  |  | (6 | %) |  |  | 16,532 |  |  |  | 5 | %
Advances to Contractors |  |  | 28,781 |  |  |  | 39,421 |  |  |  | (27 | %) |  |  | 31,722 |  |  |  | (9 | %)
Deferred Income Taxes - net |  |  | 20,944 |  |  |  | 14,998 |  |  |  | 40 | % |  |  | 20,431 |  |  |  | 3 | %
Goodwill |  |  | 549,718 |  |  |  | 530,661 |  |  |  | 4 | % |  |  | 550,152 |  |  |  | (0 | %)
Other Assets |  |  | 617,134 |  |  |  | 603,917 |  |  |  | 2 | % |  |  | 619,115 |  |  |  | (0 | %)
Total Liabilities |  |  | 432,896 |  |  |  | 590,208 |  |  |  | (27 | %) |  |  | 575,448 |  |  |  | (25 | %)
Current Liabilities |  |  | 165,414 |  |  |  | 202,889 |  |  |  | (18 | %) |  |  | 200,174 |  |  |  | (17 | %)
Long-Term Liabilities |  |  | 220,053 |  |  |  | 336,336 |  |  |  | (35 | %) |  |  | 326,810 |  |  |  | (33 | %)
Deferred Tax Liability |  |  | 32 |  |  |  | 2,470 |  |  |  | (99 | %) |  |  | 31 |  |  |  | 3 | %
Other Liabilities |  |  | 47,397 |  |  |  | 48,513 |  |  |  | (2 | %) |  |  | 48,433 |  |  |  | (2 | %)
Consolidated Stockholders’ Equity |  |  | 836,400 |  |  |  | 550,567 |  |  |  | 52 | % |  |  | 585,811 |  |  |  | 43 | %
Non-controlling Interest |  |  | 3 |  |  |  | 4 |  |  |  | (25 | %) |  |  | 3 |  |  |  | 0 | %
Stockholders’ Equity Attributable to Controlling Interest |  |  | 836,397 |  |  |  | 550,563 |  |  |  | 52 | % |  |  | 585,808 |  |  |  | 43 | %

2020 First Quarter Results |  | Page 6

Other Information |  |

Newly issued PFRS effective in 2019

PFRS 16, Leases (“PFRS 16”)

In summary, beginning January 1, 2019, PFRS 16 introduces a single lessee accounting model and requires a lessee to recognize, for all leases, allowing exemptions in case of leases with a term of less than 12 months or when the underlying asset is of low value, assets for the right-of-use of the underlying asset against a corresponding financial liability, representing the net present value of estimated lease payments under the contract, with a single income statement model in which a lessee recognizes amortization of the right-of-use asset and interest on the lease liability. After concluding the inventory and measurement of its leases, CEMEX Holdings Philippines, Inc. and Subsidiaries adopted PFRS 16 using the full retrospective approach by means of which it determined an opening cumulative effect in its statement of financial position as of January 1, 2017 as follows:

(Thousands of Philippine Pesos) |  | As of January 1, 2017 |
Assets for the right-of-use |  |  | 2,187,292 |
Deferred income tax assets |  |  | 33,509 |
Deferred income tax liability |  |  | (3,053 | )
Lease liabilities |  |  | 2,309,165 |
Retained earnings 1 |  |  | (85,311 | )

1 | The initial effect in retained earnings refers to a temporary difference between the straight-line amortization expense of the right-of-use asset and the amortization of the financial liability under the effective interest rate method since origination of the contracts. This difference will reverse over the remaining term of the contracts.

As of March 31, 2020 and 2019, assets for the right-of-use amounted to PHP 1,867 million and PHP 2,039 million, respectively. In addition, financial liabilities related to lease contracts amounted to PHP 2,089 million as of March 31, 2020 and PHP 2,251 million as of March 31, 2019. These amounts of financial liabilities as of March 31, 2020 and 2019 are included in the “Debt Information” section appearing on page 4.

2020 First Quarter Results |  | Page 7

Definitions of Terms and Disclosures |  |

Methodology for translation, consolidation, and presentation of results

CEMEX Holdings Philippines, Inc. (“CHP”) reports its consolidated financial statements under Philippine Financial Reporting Standards (“PFRS”). When reference is made in 2020 and 2019 to consolidated financial statements, it means CHP financial information together with its subsidiaries.

For the purpose of presenting figures in U.S. dollars, the consolidated balance sheet as of March 31, 2020 has been converted at the end of period exchange rate of 50.68 Philippine pesos per US dollar while the consolidated income statement for the three-month period ended March 31, 2020 has been converted at the January to March 2020 average exchange rate of 50.83 Philippine pesos per US dollar.

Definition of terms

PHP refers to Philippine Pesos.

pp equals percentage points.

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

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

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 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.

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.

Change in Working capital in the Free cash flow statements only include trade receivables, trade payables, receivables and payables from and to related parties, other current receivables, inventories, other current assets, and other accounts payable and accrued expense.

Net debt equals total debt minus cash and cash equivalents.

Exchange Rates |  | January - March |  |  | First Quarter |  |  | January - March |
|  | 2020 average |  |  | 2019 average |  |  | 2020 average |  |  | 2019 average |  |  | 2020 End of period |  |  | 2019 End of period |
Philippine peso |  |  | 50.83 |  |  |  | 52.11 |  |  |  | 50.83 |  |  |  | 52.11 |  |  |  | 50.68 |  |  |  | 52.50 |

Amounts provided in units of local currency per US dollar

2020 First Quarter Results |  | Page 8