EX-99.2 3 d949769dex992.htm EXHIBIT 2 - 2Q2020 RESULTS

Exhibit 2

2020 SECOND QUARTER RESULTS Stock Listing Information Philippine Stock Exchange Ticker: CHP Investor Relations + 632 8849 3600 EMail: chp.ir@cemex.com

Operating and Financial Highlights |  |

|  | January - June |  |  | Second Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 9,623 |  |  |  | 12,356 |  |  |  | (22 | %) |  |  | 3,993 |  |  |  | 6,119 |  |  |  | (35 | %)
Gross profit |  |  | 3,784 |  |  |  | 5,081 |  |  |  | (26 | %) |  |  | 1,430 |  |  |  | 2,768 |  |  |  | (48 | %)
as % of net sales |  |  | 39 | % |  |  | 41 | % |  |  | (2pp | ) |  |  | 36 | % |  |  | 45 | % |  |  | (9pp | )
Operating earnings before other expenses, net |  |  | 653 |  |  |  | 1,457 |  |  |  | (55 | %) |  |  | 132 |  |  |  | 832 |  |  |  | (84 | %)
as % of net sales |  |  | 7 | % |  |  | 12 | % |  |  | (5pp | ) |  |  | 3 | % |  |  | 14 | % |  |  | (10pp | )
Controlling Interest Net Income (Loss) |  |  | 135 |  |  |  | 802 |  |  |  | (83 | %) |  |  | 46 |  |  |  | 634 |  |  |  | (93 | %)
Operating EBITDA |  |  | 1,850 |  |  |  | 2,372 |  |  |  | (22 | %) |  |  | 767 |  |  |  | 1,276 |  |  |  | (40 | %)
as % of net sales |  |  | 19.2 | % |  |  | 19.2 | % |  |  | 0.0pp |  |  |  | 19.2 | % |  |  | 20.9 | % |  |  | (1.7pp | )
Free cash flow after maintenance capital expenditures |  |  | 45 |  |  |  | 1,687 |  |  |  | (97 | %) |  |  | (267 | ) |  |  | 839 |  |  |  | N/A |
Free cash flow |  |  | (1,908 | ) |  |  | 1,288 |  |  |  | N/A |  |  |  | (768 | ) |  |  | 505 |  |  |  | N/A |
Net debt1 |  |  | 8,409 |  |  |  | 16,887 |  |  |  | (50 | %) |  |  | 8,409 |  |  |  | 16,887 |  |  |  | (50 | %)
Total debt1 |  |  | 13,681 |  |  |  | 21,162 |  |  |  | (35 | %) |  |  | 13,681 |  |  |  | 21,162 |  |  |  | (35 | %)
Earnings per share2 |  |  | 0.01 |  |  |  | 0.15 |  |  |  | (92 | %) |  |  | 0.00 |  |  |  | 0.12 |  |  |  | (97 | %)

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 decreased, year-over-year, by 35% during the second quarter and by 22% during the first half of the year, due to lower volumes and prices.

Cost of sales was at 61% of sales during the first six months of 2020 compared with 59% in the same period of 2019.

Total fuel cost was 7% lower year-over-year, while total power cost declined by 24% year-over-year during the first half of 2020 mainly due to the temporary stoppage of Solid Cement Plant and kiln optimizations at APO Plant.

Power costs also benefitted from lower electricity prices and a one-off rebate from the wholesale electricity spot market in the first quarter of the year.

In line with efforts to reduce costs, CHP postponed all major kiln maintenance to the second half of the year.

Operating expenses, as a percentage of sales, was at 32.5% during the first half of 2020, compared with 29.3% in the same period of 2019.

Distribution expenses, as a percentage of sales, was at 18.2% during the first half of 2020, compared with 16.8% in the same period of 2019. Measures to control distribution expenses limited the increase in our cost to 1.4 percentage points of sales year-over-year despite significant reduction in sales volumes.

Selling and administrative expenses, as a percentage of sales, was at 14.3% during the first half of 2020, compared with 12.5% in the same period of 2019. Total selling and administrative expenses were lower by 11% year-over-year for the first half of 2020.

Operating EBITDA for the first six months of 2020 was at PHP 1.8 billion, a decrease of 22% year-over-year. Second quarter operating EBITDA was adversely affected by lower activity due to COVID-19 quarantine measures, decreasing by 40% year-over-year.

Operating EBITDA margin was flat year-over-year at 19% for the first half of the 2020, impacted by lower volumes and prices, which were partially offset by cost reduction initiatives and lower absolute distribution expenses.

Controlling interest net income was at PHP 135 million for the first six months of 2020.

Operating earnings were adversely affected by lower activity due to COVID-19 quarantine measures.

Income tax during the first half of the year reflects an increase in deferred tax assets related to Net Operating Loss Carry-Over (NOLCO) and Minimum Corporate Income Tax (MCIT) credits.

Total debt at the end of June 2020 was at PHP 13,681 million, of which PHP 11,357 million pertained to debt owed to BDO Unibank, Inc.

2020 Second Quarter Results |  | Page 2

Operating Results |  |

Domestic Gray Cement |  | January - June |  |  | Second Quarter |  |  | Second Quarter 2020 |
|  | 2020 vs. 2019 |  |  | 2020 vs. 2019 |  |  | vs. First Quarter 2020 |
Volume |  |  | (17 | %) |  |  | (31 | %) |  |  | (30 | %)
Price in PHP |  |  | (6 | %) |  |  | (6 | %) |  |  | 1 | %

The second quarter saw a significant slowdown in construction activity.

Our domestic cement volumes decreased by 31% year-over-year during the second quarter, and by 30% on a sequential basis. We have seen volume recovery month-on-month in May and June.

During the first six months of 2020, our domestic cement volumes decreased by 17% year-over-year. This decrease reflects the impact of quarantine measures nationwide and the Luzon Enhanced Community Quarantine from March 16 until May 31.

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

Sequentially, our prices remained stable, with the variation reflecting changes in geographic mix due to the temporary closure of Solid Plant.

2020 Second Quarter Results |  | Page 3

Operating EBITDA, Free Cash Flow and Debt Information |  |

Operating EBITDA and Free Cash Flow

|  | January - June |  |  | Second Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Operating earnings before other income, net |  |  | 653 |  |  |  | 1,457 |  |  |  | (55 | %) |  |  | 132 |  |  |  | 832 |  |  |  | (84 | %)
+ Depreciation and operating amortization |  |  | 1,197 |  |  |  | 915 |  |  |  |  |  |  |  | 636 |  |  |  | 443 |  |  |  |  |
Operating EBITDA |  |  | 1,850 |  |  |  | 2,372 |  |  |  | (22 | %) |  |  | 767 |  |  |  | 1,276 |  |  |  | (40 | %)
- Net financial expenses |  |  | 534 |  |  |  | 715 |  |  |  |  |  |  |  | 255 |  |  |  | 360 |  |  |  |  |
- Maintenance capital expenditures |  |  | 45 |  |  |  | 358 |  |  |  |  |  |  |  | (4 | ) |  |  | 268 |  |  |  |  |
- Change in working capital |  |  | 1,019 |  |  |  | (637 | ) |  |  |  |  |  |  | 687 |  |  |  | (324 | ) |  |  |  |
- Income taxes paid |  |  | 205 |  |  |  | 259 |  |  |  |  |  |  |  | 83 |  |  |  | 138 |  |  |  |  |
- Other cash items (net) |  |  | 1 |  |  |  | (10 | ) |  |  |  |  |  |  | 13 |  |  |  | (4 | ) |  |  |  |
Free cash flow after maintenance capital expenditures |  |  | 45 |  |  |  | 1,687 |  |  |  | (97 | %) |  |  | (267 | ) |  |  | 839 |  |  |  | N/A |
- Strategic capital expenditures |  |  | 1,953 |  |  |  | 399 |  |  |  |  |  |  |  | 501 |  |  |  | 334 |  |  |  |  |
Free cash flow |  |  | (1,908 | ) |  |  | 1,288 |  |  |  | N/A |  |  |  | (768 | ) |  |  | 505 |  |  |  | N/A |

In millions of Philippine Pesos

Debt Information

|  |  |  |  | Second Quarter |  |  |  |  |  | First Quarter |
|  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |
Total debt(1)(2) |  |  | 13,681 |  |  |  | 21,162 |  |  |  | (35 | %) |  |  | 13,481 |
Short term |  |  | 6 | % |  |  | 8 | % |  |  |  |  |  |  | 5 | %
Long term |  |  | 94 | % |  |  | 92 | % |  |  |  |  |  |  | 95 | %
Cash and cash equivalents |  |  | 5,272 |  |  |  | 4,275 |  |  |  | 23 | % |  |  | 6,334 |
Net debt |  |  | 8,409 |  |  |  | 16,887 |  |  |  | (50 | %) |  |  | 7,147 |
Leverage Ratio(3) |  |  | 3.69 |  |  |  |  |  |  |  |  |  |  |  | 3.20 |
Coverage Ratio(3) |  |  | 4.16 |  |  |  |  |  |  |  |  |  |  |  | 4.08 |

|  | Second Quarter |
|  | 2020 |  |  | 2019 |
Currency denomination |  |  |  |  |  |  |  |
U.S. dollar |  |  | 6 | % |  |  | 26 | %
Philippine peso |  |  | 94 | % |  |  | 74 | %
Interest rate |  |  |  |  |  |  |  |
Fixed |  |  | 57 | % |  |  | 41 | %
Variable |  |  | 43 | % |  |  | 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 on June 30, 2021.

2020 Second 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 – June |  |  | Second Quarter |
INCOME STATEMENT |  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 9,623,042 |  |  |  | 12,355,927 |  |  |  | (22 | %) |  |  | 3,993,126 |  |  |  | 6,118,500 |  |  |  | (35 | %)
Cost of sales |  |  | (5,838,720 | ) |  |  | (7,274,695 | ) |  |  | 20 | % |  |  | (2,562,903 | ) |  |  | (3,350,450 | ) |  |  | 24 | %
Gross profit |  |  | 3,784,322 |  |  |  | 5,081,232 |  |  |  | (26 | %) |  |  | 1,430,223 |  |  |  | 2,768,050 |  |  |  | (48 | %)
Selling and Administrative expenses |  |  | (1,377,933 | ) |  |  | (1,546,207 | ) |  |  | 11 | % |  |  | (610,478 | ) |  |  | (810,611 | ) |  |  | 25 | %
Distribution expenses |  |  | (1,753,826 | ) |  |  | (2,078,096 | ) |  |  | 16 | % |  |  | (688,022 | ) |  |  | (1,125,146 | ) |  |  | 39 | %
Operating earnings before other expenses, net |  |  | 652,563 |  |  |  | 1,456,929 |  |  |  | (55 | %) |  |  | 131,723 |  |  |  | 832,293 |  |  |  | (84 | %)
Other income (expenses), net |  |  | (1,373 | ) |  |  | 10,478 |  |  |  | N/A |  |  |  | (13,467 | ) |  |  | 4,086 |  |  |  | N/A |
Operating earnings (loss) |  |  | 651,190 |  |  |  | 1,467,407 |  |  |  | (56 | %) |  |  | 118,256 |  |  |  | 836,379 |  |  |  | (86 | %)
Financial expenses, net |  |  | (534,124 | ) |  |  | (714,803 | ) |  |  | 25 | % |  |  | (254,584 | ) |  |  | (359,567 | ) |  |  | 29 | %
Foreign exchange gain (loss), net |  |  | (305 | ) |  |  | 274,401 |  |  |  | N/A |  |  |  | 66,106 |  |  |  | 291,678 |  |  |  | (77 | %)
Net income (loss) before income taxes |  |  | 116,761 |  |  |  | 1,027,005 |  |  |  | (89 | %) |  |  | (70,222 | ) |  |  | 768,490 |  |  |  | N/A |
Income tax benefit (expenses) |  |  | 18,256 |  |  |  | (224,694 | ) |  |  | N/A |  |  |  | 116,117 |  |  |  | (134,818 | ) |  |  | N/A |
Consolidated net income (loss) |  |  | 135,017 |  |  |  | 802,311 |  |  |  | (83 | %) |  |  | 45,895 |  |  |  | 633,672 |  |  |  | (93 | %)
Non-controlling interest net income (loss) |  |  | 12 |  |  |  | 12 |  |  |  | 0 | % |  |  | 4 |  |  |  | 6 |  |  |  | (33 | %)
Controlling Interest net income (loss) |  |  | 135,029 |  |  |  | 802,323 |  |  |  | (83 | %) |  |  | 45,899 |  |  |  | 633,678 |  |  |  | (93 | %)
Operating EBITDA |  |  | 1,849,907 |  |  |  | 2,371,702 |  |  |  | (22 | %) |  |  | 767,471 |  |  |  | 1,275,767 |  |  |  | (40 | %)
Earnings per share |  |  | 0.01 |  |  |  | 0.15 |  |  |  | (92 | %) |  |  | 0.00 |  |  |  | 0.12 |  |  |  | (97 | %)

|  | as of June 30 |  |  |  |  |  | as of December 31 |
BALANCE SHEET |  | 2020 |  |  | 2019 |  |  | % Var |  |  | 2019 |  |  | % Var |
Total Assets |  |  | 63,348,718 |  |  |  | 59,446,204 |  |  |  | 7 | % |  |  | 58,806,177 |  |  |  | 8 | %
Cash and Temporary Investments |  |  | 5,271,916 |  |  |  | 4,275,083 |  |  |  | 23 | % |  |  | 1,399,180 |  |  |  | 277 | %
Derivative Asset |  |  | 0 |  |  |  | 10,946 |  |  |  | (100 | %) |  |  | 0 |  |  |  |  |
Trade Accounts Receivables |  |  | 883,519 |  |  |  | 1,080,257 |  |  |  | (18 | %) |  |  | 892,951 |  |  |  | (1 | %)
Other Receivables |  |  | 39,038 |  |  |  | 85,330 |  |  |  | (54 | %) |  |  | 92,993 |  |  |  | (58 | %)
Insurance Claims and Premium Receivables |  |  | 359,821 |  |  |  | 512 |  |  |  | 70178 | % |  |  | 445,535 |  |  |  | (19 | %)
Inventories |  |  | 2,380,727 |  |  |  | 3,452,902 |  |  |  | (31 | %) |  |  | 3,013,444 |  |  |  | (21 | %)
Assets Held for Sale |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  |  |
Other Current Assets |  |  | 1,778,188 |  |  |  | 1,353,796 |  |  |  | 31 | % |  |  | 1,672,392 |  |  |  | 6 | %
Current Assets |  |  | 10,713,209 |  |  |  | 10,258,826 |  |  |  | 4 | % |  |  | 7,516,495 |  |  |  | 43 | %
Fixed Assets |  |  | 21,248,850 |  |  |  | 17,615,197 |  |  |  | 21 | % |  |  | 19,937,723 |  |  |  | 7 | %
Investments in an Associate and Other Investments |  |  | 14,097 |  |  |  | 14,097 |  |  |  | 0 | % |  |  | 14,097 |  |  |  | 0 | %
Other Assets and Noncurrent Accounts Receivables |  |  | 873,674 |  |  |  | 985,872 |  |  |  | (11 | %) |  |  | 837,151 |  |  |  | 4 | %
Advances to Contractors |  |  | 1,378,280 |  |  |  | 1,988,045 |  |  |  | (31 | %) |  |  | 1,606,397 |  |  |  | (14 | %)
Deferred Income Taxes—net |  |  | 1,260,914 |  |  |  | 724,473 |  |  |  | 74 | % |  |  | 1,034,620 |  |  |  | 22 | %
Goodwill |  |  | 27,859,694 |  |  |  | 27,859,694 |  |  |  | 0 | % |  |  | 27,859,694 |  |  |  | 0 | %
Other Assets |  |  | 31,386,659 |  |  |  | 31,572,181 |  |  |  | (1 | %) |  |  | 31,351,959 |  |  |  | 0 | %
Total Liabilities |  |  | 21,131,517 |  |  |  | 30,188,770 |  |  |  | (30 | %) |  |  | 29,140,690 |  |  |  | (27 | %)
Current Liabilities |  |  | 7,511,370 |  |  |  | 9,887,544 |  |  |  | (24 | %) |  |  | 10,136,812 |  |  |  | (26 | %)
Long-Term Liabilities |  |  | 11,123,722 |  |  |  | 17,684,969 |  |  |  | (37 | %) |  |  | 16,549,640 |  |  |  | (33 | %)
Deferred Tax Liability |  |  | 1,453 |  |  |  | 13,954 |  |  |  | (90 | %) |  |  | 1,587 |  |  |  | (8 | %)
Other Liabilities |  |  | 2,494,972 |  |  |  | 2,602,303 |  |  |  | (4 | %) |  |  | 2,452,651 |  |  |  | 2 | %
Consolidated Stockholders’ Equity |  |  | 42,217,201 |  |  |  | 29,257,434 |  |  |  | 44 | % |  |  | 29,665,487 |  |  |  | 42 | %
Non-controlling Interest |  |  | 158 |  |  |  | 181 |  |  |  | (13 | %) |  |  | 170 |  |  |  | (7 | %)
Stockholders’ Equity Attributable to Controlling Interest |  |  | 42,217,043 |  |  |  | 29,257,253 |  |  |  | 44 | % |  |  | 29,665,317 |  |  |  | 42 | %

2020 Second 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 - June |  |  | Second Quarter |
INCOME STATEMENT |  | 2020 |  |  | 2019 |  |  | % var |  |  | 2020 |  |  | 2019 |  |  | % var |
Net sales |  |  | 190,354 |  |  |  | 237,747 |  |  |  | (20 | %) |  |  | 79,418 |  |  |  | 118,038 |  |  |  | (33 | %)
Cost of sales |  |  | (115,496 | ) |  |  | (139,977 | ) |  |  | 17 | % |  |  | (50,973 | ) |  |  | (64,637 | ) |  |  | 21 | %
Gross profit |  |  | 74,858 |  |  |  | 97,770 |  |  |  | (23 | %) |  |  | 28,445 |  |  |  | 53,401 |  |  |  | (47 | %)
Selling and Administrative expenses |  |  | (27,257 | ) |  |  | (29,752 | ) |  |  | 8 | % |  |  | (12,142 | ) |  |  | (15,639 | ) |  |  | 22 | %
Distribution expenses |  |  | (34,693 | ) |  |  | (39,986 | ) |  |  | 13 | % |  |  | (13,684 | ) |  |  | (21,706 | ) |  |  | 37 | %
Operating earnings before other expenses, net |  |  | 12,908 |  |  |  | 28,032 |  |  |  | (54 | %) |  |  | 2,619 |  |  |  | 16,056 |  |  |  | (84 | %)
Other income (expenses), net |  |  | (27 | ) |  |  | 202 |  |  |  | N/A |  |  |  | (268 | ) |  |  | 79 |  |  |  | N/A |
Operating earnings (loss) |  |  | 12,881 |  |  |  | 28,234 |  |  |  | (54 | %) |  |  | 2,351 |  |  |  | 16,135 |  |  |  | (85 | %)
Financial expenses, net |  |  | (10,566 | ) |  |  | (13,754 | ) |  |  | 23 | % |  |  | (5,063 | ) |  |  | (6,937 | ) |  |  | 27 | %
Foreign exchange gain (loss), net |  |  | (6 | ) |  |  | 5,280 |  |  |  | N/A |  |  |  | 1,315 |  |  |  | 5,627 |  |  |  | (77 | %)
Net income (loss) before income taxes |  |  | 2,309 |  |  |  | 19,760 |  |  |  | (88 | %) |  |  | (1,397 | ) |  |  | 14,825 |  |  |  | N/A |
Income tax benefit (expenses) |  |  | 361 |  |  |  | (4,323 | ) |  |  | N/A |  |  |  | 2,309 |  |  |  | (2,601 | ) |  |  | N/A |
Consolidated net income (loss) |  |  | 2,670 |  |  |  | 15,437 |  |  |  | (83 | %) |  |  | 912 |  |  |  | 12,224 |  |  |  | (93 | %)
Non-controlling interest net income (loss) |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  | 0 |  |  |  |  |
Controlling Interest net income (loss) |  |  | 2,670 |  |  |  | 15,437 |  |  |  | (83 | %) |  |  | 912 |  |  |  | 12,224 |  |  |  | (93 | %)
Operating EBITDA |  |  | 36,593 |  |  |  | 45,635 |  |  |  | (20 | %) |  |  | 15,264 |  |  |  | 24,612 |  |  |  | (38 | %)

|  | as of June 30 |  |  |  |  |  | as of December 31 |
BALANCE SHEET |  | 2020 |  |  | 2019 |  |  | % Var |  |  | 2019 |  |  | % Var |
Total Assets |  |  | 1,271,297 |  |  |  | 1,160,153 |  |  |  | 10 | % |  |  | 1,161,259 |  |  |  | 9 | %
Cash and Temporary Investments |  |  | 105,798 |  |  |  | 83,433 |  |  |  | 27 | % |  |  | 27,630 |  |  |  | 283 | %
Derivative Asset |  |  | 0 |  |  |  | 214 |  |  |  | (100 | %) |  |  | 0 |  |  |  |  |
Trade Accounts Receivables |  |  | 17,731 |  |  |  | 21,082 |  |  |  | (16 | %) |  |  | 17,633 |  |  |  | 1 | %
Other Receivables |  |  | 783 |  |  |  | 1,665 |  |  |  | (53 | %) |  |  | 1,836 |  |  |  | (57 | %)
Insurance Claims and Premium Receivables |  |  | 7,221 |  |  |  | 10 |  |  |  | 72110 | % |  |  | 8,798 |  |  |  | (18 | %)
Inventories |  |  | 47,777 |  |  |  | 67,387 |  |  |  | (29 | %) |  |  | 59,507 |  |  |  | (20 | %)
Assets Held for Sale |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 0 |  |  |  |  |
Other Current Assets |  |  | 35,685 |  |  |  | 26,421 |  |  |  | 35 | % |  |  | 33,025 |  |  |  | 8 | %
Current Assets |  |  | 214,995 |  |  |  | 200,212 |  |  |  | 7 | % |  |  | 148,429 |  |  |  | 45 | %
Fixed Assets |  |  | 426,427 |  |  |  | 343,778 |  |  |  | 24 | % |  |  | 393,715 |  |  |  | 8 | %
Investments in an Associate and Other Investments |  |  | 283 |  |  |  | 275 |  |  |  | 3 | % |  |  | 278 |  |  |  | 2 | %
Other Assets and Noncurrent Accounts Receivables |  |  | 17,533 |  |  |  | 19,240 |  |  |  | (9 | %) |  |  | 16,532 |  |  |  | 6 | %
Advances to Contractors |  |  | 27,660 |  |  |  | 38,799 |  |  |  | (29 | %) |  |  | 31,722 |  |  |  | (13 | %)
Deferred Income Taxes—net |  |  | 25,304 |  |  |  | 14,139 |  |  |  | 79 | % |  |  | 20,431 |  |  |  | 24 | %
Goodwill |  |  | 559,095 |  |  |  | 543,710 |  |  |  | 3 | % |  |  | 550,152 |  |  |  | 2 | %
Other Assets |  |  | 629,875 |  |  |  | 616,163 |  |  |  | 2 | % |  |  | 619,115 |  |  |  | 2 | %
Total Liabilities |  |  | 424,071 |  |  |  | 589,164 |  |  |  | (28 | %) |  |  | 575,448 |  |  |  | (26 | %)
Current Liabilities |  |  | 150,739 |  |  |  | 192,965 |  |  |  | (22 | %) |  |  | 200,174 |  |  |  | (25 | %)
Long-Term Liabilities |  |  | 223,233 |  |  |  | 345,140 |  |  |  | (35 | %) |  |  | 326,810 |  |  |  | (32 | %)
Deferred Tax Liability |  |  | 29 |  |  |  | 272 |  |  |  | (89 | %) |  |  | 31 |  |  |  | (6 | %)
Other Liabilities |  |  | 50,070 |  |  |  | 50,787 |  |  |  | (1 | %) |  |  | 48,433 |  |  |  | 3 | %
Consolidated Stockholders’ Equity |  |  | 847,225 |  |  |  | 570,988 |  |  |  | 48 | % |  |  | 585,811 |  |  |  | 45 | %
Non-controlling Interest |  |  | 3 |  |  |  | 4 |  |  |  | (25 | %) |  |  | 3 |  |  |  | 0 | %
Stockholders’ Equity Attributable to Controlling Interest |  |  | 847,222 |  |  |  | 570,984 |  |  |  | 48 | % |  |  | 585,808 |  |  |  | 45 | %

2020 Second 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 June 30, 2020 and 2019, assets for the right-of-use amounted to PHP 2,070 million and PHP 1,932 million, respectively. In addition, financial liabilities related to lease contracts amounted to PHP 2,324 million as of June 30, 2020 and PHP 2,112 million as of June 30, 2019. These amounts of financial liabilities as of June 30, 2020 and 2019 are included in the “Debt Information” section appearing on page 4.

2020 Second 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 June 30, 2020 has been converted at the end of period exchange rate of 49.83 Philippine pesos per US dollar while the consolidated income statement for the six-month period ended June 30, 2020 has been converted at the January to June 2020 average exchange rate of 50.55 Philippine pesos per US dollar. On the other hand, the consolidated income statement for the three-month period ended June 30, 2020 has been converted at the April to June 2020 average exchange rate of 50.28 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 - June |  |  | Second Quarter |  |  | January - June |
|  | 2020 average |  |  | 2019 average |  |  | 2020 average |  |  | 2019 average |  |  | 2020 End of period |  |  | 2019 End of period |
Philippine peso |  |  | 50.55 |  |  |  | 51.97 |  |  |  | 50.28 |  |  |  | 51.84 |  |  |  | 49.83 |  |  |  | 51.24 |

Amounts provided in units of local currency per US dollar

2020 Second Quarter Results |  | Page 8