2000

Transcription

2000
building
together
ANNUAL REPORT 2000
contents
investor relations
Financial
Highlights
Letter from the
Chairman
Mexico
Division
2
10
United States
Division
Operation
Centers
16
15
Board of
Directors and
Executive Staff
Members
23
Financial
Information
24
Design: A milenio3.com.mx • Photography: Vía 69/Victor Mendiola/Benjamín López • Printer: Wetmore Printing
1
The annual Stockholders’ Meeting of Grupo Cementos de
For additional information regarding the Company or decisions taken
Chihuahua, S.A. de C.V. was held at 5:00 p.m. on April 24, 2001 at the
in the Annual Stockholders‘ Meeting please contact GCC’s Planing
Hotel Westin Soberano located at Barrancas del Cobre 3211
Department at Vicente Suárez y Sexta, Colonia Nombre de Dios,
Chihuahua, Chih., Mexico.
31110, Chihuahua, Chihuahua, Mexico.
Shares representing the capital stock of Grupo Cementos de
TELEPHONE:
Chihuahua, S.A. de C.V. are listed on the Mexican Stock Exchange
(52-1) 442-3210
(BMV) under the ticker symbol GCC.
(52-1) 442-3217
(52-1) 442-3100
FAX:
(52-1) 442-3181
E - MAIL:
jfernandez@gcc.com
larias@gcc.com
2,817.5
2,521.7
12%
1,899.4
1,620.4
17%
918.1
901.3
2%
Operating Income
781.1
702.1
11%
Comprehensive Financing Cost
(47.0)
71.6
NA
Net Consolidated Income
503.4
402.0
25%
Majority Net Income
503.3
401.9
25%
Operating Cash Flow*
970.7
892.1
9%
Total Assets
5,352.6
5,313.9
1%
Total Liabilities
2,144.5
1,386.9
55%
Total Stockholders’ Equity
3,208.0
3,927.0
-18%
Majority Stockholders’ Equity
3,207.2
3,925.9
-18%
NET SALES
Sales in the United States
1,886
1,677
Sales in Mexico
2,342
million pesos
Net Sales
OPERATING INCOME
Book Value Per Share ($)**
9.63
11.77
-18%
702
415
432
663
million pesos
OPERATING CASH FLOW*
Current Assets / Current Liabilities (TIMES)
3.53
4.27
Total Liabilities / Total Stockholders’ Equity (TIMES)
0.67
0.35
Total Liabilities / Total Assets (TIMES)
0.40
0.26
Operating Income / Net Sales
27.7%
27.8%
Net Consolidated Income / Net Sales
17.9%
15.9%
25%
597
1.20
593
1.51
892
854
million pesos
Earnings Per Share ($)**
781
Variation
971
1999
2,522
2000
2,817
financial highlights
MAJORITY NET INCOME
402
2000
1999
1998
1997
* Operating Cash Flow= Operating Income + Depreciation y Amortization
** Basis 2000: 332,977,000 shares
Basis 1999: 333,557,000 shares
Figures stated in thousands of Mexican pesos with purchasing power at December 31, 2000
1996
211
280
392
503
million pesos
1
GRUPO
CEMENTOS DE
CHIHUAHUA
letter from the chairman
NET SALES REACHED A RECORD FIGURE OF $2,817.5
MILLION PESOS. 67.4% WAS SOLD IN THE DOMESTIC MARKET
WHILE THE REST WAS GENERATED IN THE U.S. MARKET
In 2000, Mexico’s economic growth was 6.9%, the highest
rose 8.96%, the lowest inflation growth rate in the last six years.
since 1981. Some key factors that influenced the strong
Banco de México’s exchange rate policy of a floating
growth were high oil prices, the highest in the decade,
peso, implemented in 1995, continued. The peso/dollar
export growth and domestic consumption.
exchange rate closed at $9.60 pesos per dollar, showing a
For the first time in more than 20 years, there was no crisis
nominal devaluation of only 0.8%. Mexico’s international
at the end of the federal administration. This was the result
reserves increased by US$2.82 billion, reaching US$33.56
of the application of adequate macroeconomic policies, of
billion at the end of the year.
an appropriate structure in external financing and of an
orderly electoral process.
The construction industry grew 5.0%, mainly as a result of
transportation, urbanization and hydraulic infrastructure
projects.
Total cement production in Mexico was 31.5 million metric
tons, of which 29 million were sold in the Mexican market.
Growth of cement demand in the United States was 1.1%,
a total of 105.2 million metric tons, of which 27.5% was supplied by imports.
The U.S. economy grew 5.0% during the year, the highest
growth obtained since 1984. However, it is necessary to stay
on the alert, since fourth quarter economic growth was only
1.0%, the lowest growth rate since the second quarter of
Mexico’s central bank, Banco de México, continued its
1995. Most economists forecast a substantial slowdown for
implementation of a monetary policy focused on reducing
2001. Consumer price growth posted an increase of 3.4%
inflation. Due to inflationary pressures, resulting mainly from
during the year, the highest since 1993.
the growth of domestic demand, in the fourth quarter Banco
Among the most important results obtained by Grupo
de México applied more drastic measures to intensify mone-
Cementos de Chihuahua during 2000, the following are sig-
tary restriction. In the year, the National Consumer Price Index
nificant:
3
GRUPO
CEMENTOS DE
CHIHUAHUA
letter from the
chairman
GCC invested a total of US$26.8
million in new equipment, which
contributed to increasing
productivity and production capacity
• Net sales reached a record figure of $2,817.5 million
pesos. These registered an increase of 11.7% in real terms.
cement sales volume, 53.6% was sold in the U.S. market.
the resource planning system (ERP) in all our business centers.
This system will allow us to have reliable, fast, and timely
acquisition of concrete production and distribution equipment.
• Ready-mix concrete sales volume in Mexico showed an
information for decision-making. In addition, our clients and
was sold in the domestic market, including cement, ready-
• GCC invested a total of US$26.8 million in new equip-
increase of 37.0%. In the U.S. market, the volume decreased
vendors will have access to our system, via Internet, in order
mix concrete, aggregates, concrete block, gypsum, land and
ment, which contributed to increasing productivity and pro-
9.6%.
to provide better service and reduce the response time so
other sales. The rest, equivalent to US$94.9 million, was sold
duction capacity.
• Sales volume of aggregates rose 39.1%.
that, in this manner, we may reduce the cost of our supply
chain.
in the U.S. market, as cement and ready-mix concrete sales.
• Net cost-bearing debt at the end of the year was $87.1
The Mexico Division increased its sales 17.2%, reaching a
• Operating profit was $781.1 million pesos, an increase of
million pesos, which shows a reduction of 79.4% compared
record figure of $1,899.4 million pesos. This important
As part of the objectives of our quality system, the ISO-
11.3% over 1999. Despite high natural gas prices, the oper-
to the previous year. The reduction in net indebtedness
increase was due to the strong demand generated by both
9002 certification was obtained for the Chihuahua and
ating margin in the year was 27.7%, practically the same as
resulted in net financial expenses of 41.5 million pesos,
public and private works. A key factor was the positive per-
Samalayuca plants.
the margin obtained during 1999.
57.9% lower than in 1999.
formance of ready-mix concrete operations, which showed
• Operating cash flow, defined as operating profit plus
• The Company’s net financial leverage is only 2.7%, pro-
depreciation and amortization was $970.7 million pesos,
viding the financial capacity to continue seeking strategic
showing an 8.8% increase and representing 34.5% of sales.
growth projects for GCC.
lion pesos, which compares favorably with a comprehensive
financing cost of $71.6 million pesos in 1999.
• Net consolidated income was $503.4 million pesos, a figure 25.2% higher than in 1999.
• The Company invested US$23.8 million to improve and
4
in automation and operation control projects, as well as in the
• Total cement sales volume increased 8.7%. Of the total
• Of total sales, 67.4%, equivalent to $1,899.4 million pesos,
• Comprehensive financing income earned was $47.0 mil-
ANNUAL
REPORT
[2000]
• In the United States Division, US$3.0 million were invested
increase operating capacity in the Mexico Division.
Throughout the year, the Company’s sales volumes were as
follows:
• Its cement sales volume in the domestic market rose
14.0%
• In the U.S. market, cement sales volume increased 4.3%.
During the year, exports represented 50.1% of the total volume sold by GCC in that market.
an increase in revenue of 37.1%.
This Division continued to operate without registering any
accidents in the workplace. This is the result of our commitment to implement and use high performance systems that
guarantee the safety of our personnel.
Moreover, and due to the importance that environmental
protection of those areas where GCC operates holds, we
continue to work hard to obtain the ISO-14001 certification
in our business units.
In order to reduce production costs at our cement plants in
Mexico, we have initiated a project to replace the type of fuel
The United States Division posted record figures, in rev-
used in the process, which will allow us to reduce exposure to
enue, of US$94.9 million. These figures were partly the result
fluctuations in prices of natural gas and fuel oil. In addition, the
of the unprecedented sales volumes reached by the plant at
Mexico Division is currently carrying out investment projects
Tijeras, New Mexico.
that will enable it to increase its production capacity of con-
At GCC, we are at the final stages of the implementation of
crete block and aggregates and ready-mix concrete delivery.
5
GRUPO
CEMENTOS DE
CHIHUAHUA
letter from the
chairman
Exports from the
Samalayuca plant
represented 50.1% of the
total cement volume sold by
GCC in the U.S.
CEMENT SALES VOLUME
IN THE DOMESTIC
MARKET INCREASED
14.0%, WHILE IN THE U.S.
THE CEMENT VOLUME
SOLD ROSE 4.3%
TOTAL CEMENT SALES
thousands of metric tons
The year 2000 was very important in terms of acquisitions.
would continue. As a result of this, GCC requested a review
On December 23, the Company signed a US$252 million
of this decision through a NAFTA (North American Free
contract to purchase the plant, cement assets and working
Trade Agreement) panel and also asked the Government of
capital of Dacotah Cement, and on March 16, 2001, the
Mexico to request a review of this resolution through a
acquisition was concluded.
panel in the World Trade Organization.
The Dacotah Cement plant is located in Rapid City in the
To conclude, I would like to recognize all the people who
state of South Dakota. Its production capacity is 1,050,000
work at the GCC companies, for their efforts throughout the
short tons. With this acquisition, GCC increases its cement
year. I thank them for their dedication. Without them, it
production capacity to a total of 3.3 million metric tons.
would not have been possible to achieve the results men-
This acquisition represents a great achievement for Grupo
Cementos de Chihuahua, since Dacotah Cement places us
in a better strategic position to increase our market participation in the U.S. mountain region.
At the present time, Dacotah Cement distributes cement
TOTAL CONCRETE SALES
thousands of cubic meters
tioned above. I invite them to continue participating with
greater enthusiasm, on a day-to-day basis.
In addition, I would like to thank our clients for their preference, as well as our suppliers, creditors and stockholders
for their support.
throughout nine states in the U.S., and has a distribution
network of terminals located in Sioux Falls and Watertown,
South Dakota; Casper, Wyoming; Scottsbluff, Nebraska and
Denver, Colorado.
The U.S. International Trade Commission announced that
the antidumping order against imports of Mexican cement
6
ANNUAL
REPORT
[2000]
FEDERICO TERRAZAS
Chairman of the Board of Directors
7
GRUPO
CEMENTOS DE
CHIHUAHUA
THE ISO-9002 CERTIFICATION
WAS GRANTED TO GCC’S
QUALITY ASSURANCE
PROGRAMS AT THE CHIHUAHUA
AND SAMALAYUCA PLANTS.
FURTHERMORE, WE BEGAN
THE IMPLEMENTATION OF THE
ISO-14001 SYSTEM, RELATIVE TO
THE ENVIRONMENTAL
PROTECTION
9
GRUPO
CEMENTOS DE
CHIHUAHUA
mexico division
THE VOLUME OF CEMENT EXPORTS TO THE UNITED STATES
ROSE 11.9% DUE TO AN INCREASE IN ROAD INFRASTRUCTURE
PR0JECTS
The dynamic growth in the
construction sector led to a 17.2%
revenue increase in the Mexico
Division
10
INFORME
ANUAL
[2000]
In 2000, the dynamic growth in the construction sector led
the Mexican market, compared to 1999. This was due to an
to a 17.2% revenue increase in GCC’s Mexico Division, with
increase in commercial and residential construction and to
sales reaching $1.899 billion pesos. Revenue generated by
concrete street paving. Furthermore, the volume of cement
this Division represented 67.4% of total sales of Grupo
exports to the United States rose 11.9% due to an increase
Cementos de Chihuahua. As is customary, the greater part
in road infrastructure projects.
of revenue in the Division was originated from cement sales,
One of the several achievements accomplished during
specifically 53.7%, and from ready-mix concrete sales,
the year 2000 is the award granted by the National Contest
22.4%. After these two products, in order of importance,
of the Best Work Teams to the maintenance team of the
were concrete block sales, land, aggregates and others.
clinker unit of the Chihuahua plant.
The Mexico Division’s cement sales accounted for 46.4% of
In April, ISO-9002 certification was granted to GCC’s quality
the total volume of cement sold by GCC, together with
assurance programs at the Chihuahua and Samalayuca plants.
ready-mix concrete sales representing 75.7% of total con-
Further recognition was received in December, with the
crete sales sold during the year. The Division registered
approval of the maintenance audits conducted in October
69.5% utilization of its total cement production capacity,
and November, in line with international procedures for this
which amounts to 1.925 million metric tons produced at
norm, indicating the need of follow-up in the certification.
GCC Mexico’s cement plants located in Chihuahua, Ciudad
Also, in the Division’s three cement plants, as well as in its
Juarez and Samalayuca. Moreover, the Mexico Division’s
ready-mix concrete and transport operations, the bases
exports from the Samalayuca Plant accounted for 50.1% of
were set for implementation of the ISO-14001 System, rela-
the total cement sales volume of the United States Division.
tive to environmental protection. This included the coordi-
Cement sales volume in the Mexico Division grew 14.0% in
nation of initial activities, a sensitivity course and personnel
11
GRUPO
CEMENTOS DE
CHIHUAHUA
mexico
division
The ready-mix concrete
and concrete block sales
volumes grew 37.0% and
36.2%, respectively
MEXICO AGGREGATES SALES
training in the system, as well as the development of the
manual, procedures and working instructions.
high sales volumes of 3.5 million metric
Reflecting its safety culture at the workplace, the Division
state of Chihuahua, continued to develop favorably, backed
tons of different types of aggregates,
again registered zero accidents in the year, demonstrating
by commercial construction, and concrete street paving.
surpassing the volumes sold in 1999 by
the results of Grupo Cementos de Chihuahua’s philosophy
This helped ready-mix concrete and concrete block sales
39.1%.
of safety on the job.
volumes to grow 37.0% and 36.2%, respectively, compared
to volume sold in 1999.
The leadership of GCC’s Chuviscar
gypsum in the markets where it parti-
in operations related with the production of cement and
Due to the growth of these markets, in 2000, investments
cipates, made it possible for the
aggregates. Among these investments is the new aggregate
totaling US$8.4 million were made in GCC’s ready-mix con-
Chihuahua city plant to operate at a
production plant in the city of Chihuahua, which will allow
crete operations, mainly in the purchase of transportation
77% rate of utilized production capac-
doubling production of aggregates in the city, as well as the
equipment and in the construction of the new building
ity, the highest figure since it began
development of the new resource planning system (ERP),
housing the general offices. These investments will enable
operations in 1998.
which is being implemented throughout the Company.
the Company to increase its efficiency in ready-mix concrete
In order to reduce production costs in our Mexico cement
12
During the year, GCC achieved record
The ready-mix concrete and concrete block markets, in the
During 2000, the equivalent of US$12.1 million was invested
ANNUAL
REPORT
[2000]
of transportation equipment.
delivery and customer service.
cluded for the fourth stage of the
Construction was also begun on two new concrete block
Cumbres residential development in
manufacture of cement was initiated. This will allow us to
production plants in the cities of Chihuahua and Juarez. This
Chihuahua, and 60% progress was
reduce the GCC’s exposure to fluctuations in the prices of
will allow GCC to continue servicing the growing market for
achieved in the Plaza Cumbres devel-
natural gas and fuel oil.
this product while maintaining its leadership position.
opment. Sales grew 17% compared to
In addition to the investments in the cement and ready-
that will permit an increase in its production capacity of con-
mix concrete operations mentioned above, GCC acquired
crete block and aggregates as well as in ready-mix concrete
and modernized industrial, transportation and information
delivery. Other investments made in the year correspond to
equipment in other business areas. The total investments in
the replacing of equipment in the plants and the acquisition
the Mexico Division were US$23.8 million.
CEMENT EXPORTS
thousands of metric tons
Finally, in 2000, urbanization was con-
plants, the project to replace the fuel products used in the
The Mexico Division is carrying out investment projects
thousands of metric tons
1999 in this real estate area.
13
GRUPO
CEMENTOS DE
CHIHUAHUA
operation centers
CEMENT PLANTS
CONCRETE OPERATIONS
DISTRIBUTION TERMINALS
1
Samalayuca, Chihuahua
1
Chihuahua, Chihuahua
1
El Paso, Texas
2
Chihuahua, Chihuahua
2
Juarez, Chihuahua
2
Albuquerque, New Mexico
3
Juarez, Chihuahua
3
Cuauhtemoc, Chihuahua
3y4
4
Tijeras, New Mexico
4
Delicias, Chihuahua
5
Sioux Falls, South Dakota
5
Rapid City, South Dakota
5
El Paso, Texas
6
Watertown, South Dakota
6
Las Cruces, New Mexico
7
Casper, Wyoming
7
Ruidoso, New Mexico
8
Scottsbluff, Nebraska
8
Alamogordo, New Mexico
Denver, Colorado
TRANSFER STATIONS
1
Moorcroft, Wyoming
2
Brookings, South Dakota
SOUTH DAKOTA
COLORADO
Watertown
Moorcroft
WYOMINGDenver
Brookings
Rapid City
Sioux Falls
Casper
Scottsbluff
NEBRASKA
NUEVO MÉXICO
COLORADO
Albuquerque
Denver
Tijeras
Ruidoso
Alamogordo
Las Cruces
El Paso
NEW MEXICO
Cd. Juárez
Samalayuca
TEXAS
Albuquerque
Tijeras
CHIHUAHUA
Alamogordo
Ruidoso
Chihuahua
Las Cruces
Cd. Juarez
El Paso
TEXAS
Samalayuca
CHIHUAHUA
Chihuahua
15
GRUPO
CEMENTOS DE
CHIHUAHUA
united states division
THE PLANT AT TIJERAS, NEW MEXICO REACHED
UNPRECEDENTED SALES VOLUMES, AS A RESULT OF
IMPORTANT HIGHWAY CONSTRUCTION AND
INFRASTRUCTURE PROJECTS
Rio Grande Materials implemented
a new control system to increase
its operating efficiency
The United States Division posted record sales revenue fig-
metric tons of cement, recorded a historic high. The plant
ures, US$94.9 million, in 2000. This figure represents 32.6%
produced 442,654 metric tons of clinker and 466,236 metric
of the GCC’s total sales revenue, and is 5.7% higher than the
tons of cement, reaching record high production figures.
one obtained in 1999, due to a rise in cement volume sold
The Rio Grande Portland Cement subsidiary invested
in the U.S. market, and to higher prices. In this way, the
US$2.4 million during 2000. This figure includes the process
Division sold 53.6% of total cement volume and 24.3% of
automation project at the Tijeras, New Mexico plant and the
ready-mix concrete volume sold by the Company.
replacement and modernization of the production, trans-
The plant at Tijeras, New Mexico reached unprecedented
sales volumes, as a result of important highway construction
In 2000, we obtained the air quality and the special use
and infrastructure projects. These projects contributed toward
permits for the construction of the cement plant in Pueblo,
a 4.3% growth in cement sales volumes, compared to 1999.
Colorado. We will continue the process to obtain the rest of
Of the U.S. Division’s sales, 80.2% were due to record
cement sales volumes and the rest to ready-mix concrete.
the permits, including the ones related to mining and reclamation.
The plant at Tijeras, New Mexico sold 47.9% of the total
Rio Grande Materials, our concrete subsidiary in the United
cement volume sold in the United States by GCC. The rest
States, experienced a reduction of 6.7% in its revenue and a
was supplied through cement imports from the Samalayuca
decrease of 9.6% in ready-mix concrete sales volumes, as a
plant in Mexico and a minimal part was purchased from a
result of the change in strategy, which consisted in focusing
U.S. producer.
on participating in concrete market segments that require
During the year, cement and clinker production at the
16
INFORME
ANUAL
[2000]
portation and information systems equipment.
Tijeras plant, which has a production capacity of 450,000
higher quality and service levels, at better prices.
This subsidiary implemented a new control system to
17
GRUPO
CEMENTOS DE
CHIHUAHUA
united states
division
We are continuing with the
process automation project
at the Tijeras, New Mexico
plant
increase its operating efficiency through the improvement
In 2000, deposits totaling US$7.0 million were made
of its mixing, inventory, credit and accounts receivable
toward payment of the antidumping tax on Mexican cement
processes. The new system required an investment of
imports in the United States. In addition to the deposits,
US$0.4 million. In addition, Rio Grande Materials invested
provisions of US$10.4 million were also made.
the eighth review.
Nebraska and Denver, Colorado, two transfer stations locat-
Furthermore, on October 5, 2000, the United States
ed in Moorcroft, Wyoming and Brookings, South Dakota,
International Trade Commission announced that the
together with the working capital. GCC will increase its
On March 7, 2000, the United States Department of
antidumping order against Mexican cement imports will con-
annual cement production capacity by approximately
and distribution equipment, in addition to the purchase of
Commerce disclosed the final result of the eighth adminis-
tinue in effect. GCC requested the review of this decision
1,050,000 tons with this acquisition.
computer equipment.
trative review on antidumping taxes on Mexican cement
through a North American Trade Agreement (NAFTA) panel,
The US$252 million transaction includes working capital in
imports into the United States. This review, which includes
and also asked the Mexican government to request a review
the amount of US$18 million and US$69 million in cash. GCC
the period from August 1997 to July 1998, resulted in an
of this resolution through a World Trade Organization panel.
financed part of the purchase with US$183 million in debt,
million .
Two of the U.S. Division subsidiaries, Rio Grande Portland
18
Watertown, South Dakota; Casper, Wyoming; Scottsbluff,
US$0.2 million to replace its ready-mix concrete production
Investments in the United States Division totaled US$3.0
ANNUAL
REPORT
[2000]
41.28%. This margin is lower than the 45.98% margin set by
average weighted margin of 45.98%.
Finally, on December 23, 2000 Grupo Cementos de
and the remaining amount with cash acquired in the trans-
Cement and Rio Grande Materials, are currently in the
In addition, on August 31, 2000, the United States
Chihuahua signed an agreement to purchase a plant and
action.
implementation phase of the resource planning system
Department of Commerce disclosed the preliminary result of
other cement assets of Dacotah Cement in the United
This acquisition is a major achievement for Grupo
(ERP) in all its business centers. This will enable the
the ninth administrative review on antidumping taxes on
States. This transaction was concluded on March 16, 2001,
Cementos de Chihuahua, because Dacotah Cement, which
Company to have reliable, fast and timely information for
Mexican cement imports to the United States. The prelimi-
with the acquisition of the fixed assets which include a
distributes its cement in nine states in the U.S., places GCC
decision making. The transition from the cur rent to the new
nary result of this review, which includes the period from
cement production plant located in Rapid City, South
in a better strategic position to increase the market partici-
system, is expected to conclude in April, 2001.
August 1998 to July 1999 was an average weighted margin of
Dakota, five distribution terminals situated in Sioux Falls and
pation in the mountain region in the United States.
19
GRUPO
CEMENTOS DE
CHIHUAHUA
ON MARCH 16, 2001
GRUPO CEMENTOS DE
CHIHUAHUA CONCLUDED
THE ACQUISITION OF
DACOTAH CEMENT’S
PLANT AND OTHER
CEMENT ASSETS
20
ANNUAL
REPORT
[2000]
board of directors and
executive staff members
CHAIRMAN
POSITION
NAME
Federico Terrazas Torres
Grupo Cementos de Chihuahua Director
Manuel Milán Reyes
Corporate Director
Salvador Terrazas Baeza
B OARD MEMBERS
A LT E R N ATE BOARD MEMBERS
Engineering Director
Francisco Ortega López
Mario de la Garza Caballer o
Cosme Furlong Madero
Administrative Manager
Jorge Hernández Carreón
Armando García Segovia
César Constain Van-Reck
Engineering Manager
Víctor Baylón Sáenz
Francisco Garza Zambrano
Ramiro Villarreal Morales
Financial Planning Manager
Jaime Fernández Horcasitas
Miguel Márquez Prieto
Martha Márquez de Corral
Corporate Treasurer
Martha Rodríguez Rico
Miguel Márquez Villalobos
Luis Márquez Villalobos
Juarez and Samalayuca Plants Director
Carlos Guardiola Gasson
Héctor Medina Aguiar
Jorge Guajardo Touché
Chihuahua Plant Director
Juan Bueno Rascón
Salvador Terrazas Baeza
Federico Terrazas Becerra
Mexico Division Commercial Director
Roberto Moreno Vargas
Enrique G. Terrazas Torres
Alberto Terrazas Seyffert
Mexico Division Concrete Operations Director
Daniel Méndez de la Peña
Federico Terrazas Torres
Luis E. Terrazas Seyffert
United States Division Director
Enrique Escalante Ochoa
Emilio Touché Fares
Sergio Rodríguez Alvarado
United States Division Cement
Ron Hedrick
Lorenzo Zambrano Treviño
Héctor Tamez González
Operations Director
United States Division Cement Sales
S TAT U TO RY AUDITO R S
A LT E R N ATE STAT U TO RY AUDITO R S
and Marketing Director
Humberto Valles Hernández
Américo de la Paz
Tijeras Plant Manager
William C. Webb
Gary Romontio
de la Garza
Luis González Parás
Fernando Elizondo Barragán
23
GRUPO
CEMENTOS DE
CHIHUAHUA
consolidated financial
statements
YEARS ENDED DECEMBER 31, 2000 AND 1999 WITH REPORT OF INDEPENDENT AUDITORS
Report of
Independent
Auditors
25
Consolidated
Balance Sheets
Consolidated
Statements of
Income
26
28
Consolidated
Statements of
Changes in Stockholders’ Equity
Consolidated
Statements of
Changes in
Financial Position
29
31
Notes to
Consolidated
Financial
Statements
32
Investor
Relations
24
INFORME
ANUAL
[2000]
report of independent
auditors
TO THE STOCKHOLDERS OF
GRUPO CEMENTOS DE CHIHUAHUA, S.A. DE C.V. AND SUBSIDIARIES
We have audited the accompanying consolidated balance sheets of Grupo Cementos de Chihuahua, S.A. de C.V. and
subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, changes in
stockholders’ equity and changes in financial position for the years then ended. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements
based on our audits.
The financial statements of some of the subsidiaries were examined by other independent public accountants. The
financial statements of these subsidiaries reflect total assets and operating income that represent 21.4% and 32.5% in
2000 and 21.7% and 35.7% in 1999, respectively, of the related consolidated amounts. Our opinion, insofar as it relates
to the total amounts reported by these subsidiaries, is based solely on the reports of the other independent public
accountants.
We conducted our audits in accordance with auditing standards generally accepted in Mexico. Those standards
require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of
material misstatement and are prepared in conformity with accounting principles generally accepted in Mexico. An audit
includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements.
An audit also includes assessing the accounting principles used and the significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, based on our examinations and on the reports of the other independent public accountants, the
financial statements referred to above present fairly, in all material respects, the consolidated financial position of Grupo
Cementos de Chihuahua, S.A. de C.V. and subsidiaries at December 31, 2000 and 1999, and the consolidated results
of their operations, changes in their stockholders’ equity and changes in their financial position for the years then ended,
in conformity with accounting principles generally accepted in Mexico.
As mentioned in Note 1k to the accompanying financial statements, effective January 1, 2000, the Company adopted
the requirements of the new Mexican accounting Bulletin D-4, Accounting for Income Tax, Asset Tax and Employee Profit
Sharing, issued by the Mexican Institute of Public Accountants. The new Bulletin D-4 requires the recognition of deferred
taxes on all temporary differences in balance sheet accounts for financial and tax reporting purposes. Through
December 31, 1999, deferred taxes were recognized only on temporary differences that were considered to be nonrecurring and that had a known turnaround period of time.
C.P.C. AMÉRICO DE LA PAZ DE LA GARZA
MANCERA, S.C.
MEMBER OF ERNST & YOUNG INTERNATIONAL
Chihuahua, Chihuahua, México February 12, 2001
25
GRUPO
CEMENTOS DE
CHIHUAHUA
CONSOLIDATED BALANCE SHEETS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
(Thousands of Mexican pesos with purchasing power at December 31, 2000)
DECEMBER 31
1999
2000
ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current assets:
Current liabilities:
Cash and cash equivalents
Ps.
652,539
Ps.
629,850
Accounts receivable:
Bank loans and current portion of
long-term debt
Trade, net of allowance for doubtful
Ps.
Suppliers
accounts of Ps. 24,381 and Ps. 25,968 at
165,161
Ps.
165,464
143,169
73,807
133,585
94,545
Total current liabilities
441,915
333,816
Long-term debt
574,433
887,612
Labor obligations
34,720
37,389
Other long-term liabilities
215,329
128,118
Deferred income taxes
878,124
-
2,144,521
1,386,935
Employee profit sharing and
December 31, 2000 and 1999, respectively
425,376
318,963
Tax refunds due and other accounts receivable
65,460
95,745
490,836
414,708
389,276
370,366
26,491
10,052
Inventories
Prepaid expenses
Total current assets
1,559,142
accrued liabilities
1,424,976
Total liabilities
Equity investments
Property, plant and equipment, net
Other assets
54,994
86,030
3,620,653
3,663,672
117,780
139,231
Stockholders’ equity
Capital stock
Additional paid-in capital
Stock premiums
Reserve for repurchase of Company’s own shares
Ps.
5,352,569
Ps.
5,313,909
596,578
596,578
2,045,664
2,045,664
662,402
662,402
94,886
140,088
Retained earnings
2,108,933
1,759,737
Deficit from restatement of stockholders’ equity
(1,980,490)
(1,833,993)
Cumulative effect of deferred taxes
(977,384)
-
Effect of translation of foreign subsidiaries
153,304
153,467
Majority net income
503,260
401,909
Majority stockholders’ equity
3,207,153
3,925,852
Minority stockholders’ equity
895
1,122
3,208,048
3,926,974
Total stockholders’ equity
TOTAL ASSETS
DECEMBER 31
1999
2000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
Ps.
5,352,569
Ps.
5,313,909
See accompanying notes.
26
ANNUAL
REPORT
[2000]
27
GRUPO
CEMENTOS DE
CHIHUAHUA
CONSOLIDATED STATEMENTS OF INCOME GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
(Thousands of Mexican pesos with purchasing power at December 31, 2000)
(Thousands of Mexican pesos with purchasing power at December 31, 2000)
YEAR ENDED
DECEMBER 31
1999
2000
Net sales
Ps.
2,817,498
Ps.
YEAR ENDED
DECEMBER 31
1999
2000
2,521,653
Capital stock
Cost of sales
1,725,503
1,558,716
Balance at beginning and end of year
Gross profit
1,091,995
962,937
Operating expenses
310,923
260,859
Operating income
781,072
702,078
Comprehensive financing (income) cost
(46,986)
71,551
Other expenses, net
249,770
212,118
Ps.
596,578
Ps.
596,578
Additional paid-in capital
Balance at beginning and end of year
2,045,664
2,045,664
662,402
662,402
140,088
70,441
-
34,692
(48,463)
(11,970)
3,261
46,925
94,886
140,088
Stock premiums
Balance at beginning and end of year
Reserve for repurchase of Company’s own shares
Balance at beginning of year
Increase for the year
Income before income taxes,
Repurchase of Company’s own shares
asset tax and employee
Re-placement of Company’s own shares
profit sharing
578,288
418,409
Balance at end of year
Income taxes and asset tax
Employee profit sharing
74,864
3,715
21
12,682
503,403
402,012
143
103
Retained earnings
Balance at beginning of year
Net income
Minority net income
Majority net income
Ps.
Weighted average number of shares outstanding (in thousands)
Earnings per share
503,260
Ps.
332,977
Ps.
1.51
Ps.
1,759,737
1,447,989
Transfer from majority net income
401,909
392,625
Dividends paid
(52,713)
(46,185)
-
(34,692)
2,108,933
1,759,737
(1,833,993)
(1,499,840)
(146,497)
(334,153)
(1,980,490)
(1,833,993)
Reserve for repurchase of Company’s own shares
401,909
Balance at end of year
333,557
Deficit from restatement of stockholders’
1.20
equity
Balance at beginning of year
Result from holding non-monetary assets
BALANCE AT END OF YEAR
See accompanying notes.
28
ANNUAL
REPORT
[2000]
See accompanying notes.
29
GRUPO
CEMENTOS DE
CHIHUAHUA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
(Thousands of Mexican pesos with purchasing power at December 31, 2000)
(Thousands of Mexican pesos with purchasing power at December 31, 2000)
2000
YEAR ENDED
DECEMBER 31
1999
–
–
Net income
(977,384)
–
Items not requiring the use of (providing) resources:
Cumulative effect of deferred taxes
YEAR ENDED
DECEMBER 31
1999
2000
Operating activities
Balance at beginning of year
Effect of year
Ps.
Depreciation and amortization
Balance at end of year
(977,384)
–
Deferred income tax
Result from translation of foreign subsidiaries
Balance at end of year
177,525
(163)
(24,058)
153,304
153,467
Majority net income
Balance at beginning of year
401,909
392,625
Transfer to retained earnings
(401,909)
(392,625)
Majority net income
503,260
401,909
Balance at end of year
503,260
401,909
401,909
190,064
22,234
-
(143)
(103)
714,943
591,870
Accounts receivable
(76,128)
(66,556)
Inventories
(58,010)
(11,908)
Other assets
21,451
(80,630)
Suppliers
69,362
(44,085)
Other accounts payable
30,052
115,815
701,670
504,506
(313,482)
(200,644)
Effect of translation of foreign subsidiaries
153,467
Ps.
189,592
Minority interest
Balance at beginning of year
503,260
Variances:
Resources provided by operating activities
Financing activities
Decrease in short and long-term bank loans
Related parties
Repurchase of Company’s own shares
Re-placement of Company´s own shares
Dividends paid
TOTAL MAJORITY STOCKHOLDERS’ EQUITY
Ps.
3,207,153
Ps.
3,925,852
Resources used in financing activities
-
(507)
(48,463)
(11,970)
3,261
46,925
(52,713)
(46,185)
(411,397)
(212,381)
Investing activities
Equity investments
(31,036)
4,487
Purchase of property, plant and equipment
298,620
209,757
Resources used in investing activities
267,584
214,244
22,689
77,881
629,850
551,969
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
CASH AND CASH EQUIVALENTS AT END OF YEAR
See accompanying notes.
30
ANNUAL
REPORT
[2000]
Ps.
652,539
Ps.
629,850
See accompanying notes.
31
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
1. OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
Important intercompany balances, investments and transactions were eliminated in the consolidation.
During the year Grupo Cementos de Chihuahua, S.A. de C.V. and some of its subsidiaries acquired all the
outstanding common stock of GCC Inversiones y Comercialización, S.A. de C.V., a company engaged in
DESCRIPTION OF THE BUSINESS
Grupo Cementos de Chihuahua, S.A. de C.V. (hereinafter “the Company”) is the holding company whose
the marketing of cement and in promoting investments in affiliated companies.
subsidiaries are engaged primarily in producing and marketing ready-mix concrete and cement.
On June 20, 2000, GCC Dacotah, Inc. was incorporated under the laws of the State of South Dakota, with
The Company is a wholly owned subsidiary of Control Administrativo Mexicano, S.A. de C.V.
an initial capital of U.S.$ 1,000 represented by 1,000 shares with a par value of U.S. one dollar each. Such
company will engage in the production of various types of cement.
On December 1, 1999, GCC Cemento, S.A. de C.V. was created as a result of a spin-off from Cementos de
ACCOUNTING POLICIES AND PRACTICES
The significant accounting policies and practices observed in the preparation of the financial statements
Chihuahua, S.A. de C.V.
are described below:
On August 27, 1999, GCC Ingeniería y Proyectos, S.A. de C.V. was incorporated to carry out and manage
engineering and industrial projects both in Mexico and abroad.
a. Basis of consolidation of financial statements
The accompanying consolidated financial statements include the accounts of Grupo Cementos de
In 1999, the Company acquired a 100% equity interest in the subsidiary Eurotec de México, S.A. de C.V. The
Chihuahua, S.A. de C.V. and its subsidiaries. The consolidated subsidiaries and the Company’s equity
price paid was similar to the book value of the shares acquired.
interest in each are as follows:
In conformity with Mexican accounting principles Bulletin B-15, Transactions in Foreign Currency and Translation of
Financial Statements of Foreign Operations, the effective date of which is January 1, 1998, the Company translated
the financial statements of its foreign subsidiaries as follows:
2000
PERCENTAGE
EQUITY INTEREST
AT DECEMBER 31
1999
99.98
99.98
MEXICAN COMPANIES:
Cementos de Chihuahua, S.A. de C.V.
• The financial statements were restated at December 31, 2000 based on the U.S. consumer price index
(CPI). The current year monetary effect was determined based on the annual inflation factor derived
from the CPI.
• Balance sheet and income statement accounts were translated using the prevailing exchange rate at
the end of the year. Translation adjustments are reflected in a separate stockholders’ equity caption
known as “Effect of translation of foreign subsidiaries.”
Materiales Industriales de Chihuahua, S.A. de C.V.
99.95
99.95
The financial statements for the year ended December 31, 1999 as originally issued have been
Transportadora Rarámuri, S.A. de C.V.
99.96
99.96
reexpressed in constant pesos with purchasing power at December 31, 2000, as follows:
• Figures of the parent company and its Mexican subsidiaries were restated using the 2000 inflation
Concretos Premezclados de Chihuahua, S.A. de C.V.
99.89
99.89
Minera Rarámuri, S.A.
99.98
99.98
factor of 1.0896 derived from the Mexican National Consumer Price Index (NCPI).
Construcentro de Chihuahua, S.A. de C.V.
99.98
99.98
• U.S. dollar amounts reported by foreign subsidiaries were restated using the 2000 U.S. inflation factor
Fincem, S.A. de C.V.
99.99
99.99
of 1.0350. Constant U.S. dollar amounts at December 31, 2000 were translated at the prevailing
100.00
100.00
99.89
99.89
Eurotec de México, S.A. de C.V.
Promotora de Desarrollos Inmobiliarios de Chihuahua, S.A. de C.V.
exchange rate at the end of the reporting period, which was Ps. 9.57 per U.S. dollar.
b. Use of estimates
Vin Concreto de Chihuahua, S.A. de C.V.
99.98
99.98
The preparation of financial statements in conformity with generally accepted accounting principles
GCC Cemento, S.A. de C.V.
99.98
99.98
requires management to make estimates and assumptions that affect the reported amounts of assets
100.00
100.00
and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
99.99
-
and the amounts of revenues and expenses during the reporting period. Actual results could differ from
100.00
100.00
GCC Ingeniería y Proyectos, S.A. de C.V.
GCC Inversiones y Comercialización, S.A. de C.V.
FOREIGN COMPANIES (LOCATED IN THE UNITED STATES):
GCC of America, Inc.
these estimates.
c. Recognition of the effects of inflation
Rio Grande Portland Cement, Corp.
100.00
100.00
The Company recognizes the effects of inflation on financial information as required by Mexican
Rio Grande Materials, Inc.
100.00
100.00
accounting principles Bulletin B-10, Accounting Recognition of the Effects of Inflation on Financial Information,
GCC Dacotah, Inc.
100.00
-
as amended, issued by the Mexican Institute of Public Accountants. Bulletin B-10 requires that all
Mexcement, Inc.
100.00
100.00
financial information presented be expressed in constant pesos with purchasing power at the latest
balance sheet date.
32
ANNUAL
REPORT
[2000]
33
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
The Company elected to use the specific-cost method to restate inventories.
The new Mexican accounting Bulletin C-2, Financial Instruments, will go into effect on January 1, 2001. At the
repurchase of the Company’s owns shares, cumulative effect of deferred taxes and retained earnings
date of the audit report on these financial statements, the Company is determining the impact that this
were restated based on the NCPI.
new pronouncement will have.
The significant inflation accounting concepts and procedures are described below:
Through the year ended December 31, 2000, the Company did not record gains and losses on the future
Net monetary effect
purchase and sale of gas under forward contracts (“forwards”) until the expiration of the related
This represents the effect of inflation on monetary assets and liabilities. The net monetary effect of
contracts.
each year is included in the statement of income under the caption “Comprehensive financing
Whenever, there are significant adverse changes in the market value of commodities which affect
(income) cost”.
Deficit from restatement of stockholders’ equity
Transactions in foreign currency are recorded at the prevailing exchange rate on the day of the related
non-monetary assets. The result from holding non-monetary assets represents the difference
transactions. Exchange differences determined from the date of the transactions to the time of their
between the increase in the specific value of non-monetary assets and the increase in the value of
settlement or valuation at the balance sheet date are charged or credited to income.
such assets based only on inflation.
The Company’s foreign currency position at the end of each year and the exchange rates used to translate
Cash equivalents are stated at cost plus accrued interest, similar to market value.
e. Inventories and cost of sales
foreign currency denominated balances are disclosed in Note 8.
j. Labor obligations
Under Mexican labor law, the Company has a liability for severance payments accruing to workers in
Inventories are stated at estimated replacement cost, which includes only variable manufacturing
certain circumstances. It is the policy to charge termination payments to costs and expenses of the year
expenses (direct-costing method). The stated value of inventories is not in excess of market value. Fixed
in which the decision to dismiss a worker is made. The liability for seniority premiums is recognized
manufacturing expenses incurred in the 2000 and 1999 fiscal years in the amount of Ps. 526,761 and Ps.
periodically on the basis of actuarial computations.
510,094, respectively, are included in cost of sales.
k. Deferred income tax and deferred employee profit sharing
This caption includes land and the development expenses incurred in order to sell the land on a short-
Requirements of the new Mexican accounting Bulletin D-4, Accounting for Income Tax, Asset Tax and Employee Profit
term basis, restated to reflect replacement values based on an appraisal made by independent experts.
Sharing, went into effect on January 1, 2000. The new bulletin modifies the rules with respect to the
Cost of sales represents the estimated replacement cost of inventories at the time of their sale, restated
determination of deferred income tax (deferred taxes). Basically, the new bulletin requires that deferred
in constant pesos at the balance sheet date.
taxes be determined on virtually all temporary differences in balance sheet accounts for financial and tax
f. Equity investments
reporting purposes, using the enacted income tax rate at the time the financial statements are issued.
Equity investments in companies in which the Company owns between 20% and 50% and over which the
Through December 31, 1999, deferred taxes were recognized only on temporary differences that were
Company exercises significant influence are accounted for using the equity method. Investments in
considered to be non-recurring and that had a known turnaround time.
companies in which the Company owns less than 20% are recorded at cost, restated based on the NCPI.
The accumulated effect of these new requirements at the beginning of 2000 is to be applied to
g. Property, plant and equipment
34
forwards, the anticipated effects are recognized in income in the year in which they occur.
i. Exchange differences
This consists of the accumulated monetary position result and of the accumulated result from holding
d. Cash equivalents
ANNUAL
REPORT
[2000]
h. Derivatives
Capital stock, contributed capital derived from the restructuring, stock premium, reserve for the
stockholders’ equity, without restructuring the financial statements of prior years.
Imported plant and equipment are stated at their current estimated value based on the rate of inflation
Income tax for the year ended December 31, 2000, should be charged to results of operations and
in the country of origin and the prevailing exchange rate at the balance sheet date (i.e., specific
represents a liability due and payable in a period of less than one year.
restatement factors).
In conformity with the new bulletin, deferred employee profit sharing should be recognized only on
Machinery and equipment of domestic origin are restated using the NCPI.
temporary differences determined in the reconciliation of current year net income for financial and tax
At December 31, 2000, approximately 71% of machinery and equipment was restated based on specific
reporting purposes, provided there is no indication that the related liability or asset will not be realized
factors.
in the future.
Depreciation is computed on the restated value of fixed assets using the straight-line method based on
Employee profit sharing should be charged to results of operations and represents a liability due and
the estimated useful lives of the assets as determined by management periodically (See Note 5).
payable in a period of less than one year.
Comprehensive financing costs incurred during the building and installation period are capitalized. Such
The new Bulletin D-4 requires that asset tax be considered a tax prepayment and offset against deferred
costs are restated using the NCPI.
income tax.
35
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
4. EQUITY INVESTMENTS
l. Recognition of revenue
Revenues from sales of cement are recognized at the time the product is shipped and billed to the
customer. Revenues from sale of concrete are recognized when the product is delivered at the
The Company’s equity investments consist of the following at December 31:
construction site.
m. Earnings per share
2000
Earnings per share of common stock are computed based on the average weighted number of shares of
1999
common stock outstanding.
Promotora de Hospitales Mexicanos, S.A. de C.V.
Ps.
Mexalit, S.A.
2. RELATED PARTIES
In the years ended December 31, 2000 and 1999, the Company had the following transactions with related
46,871
Ps.
47,210
–
28,905
Promotora de Infraestructura de México, S.A. de C.V.
1,967
3,692
Servicios de Previsión Integral, S.A. de C.V.
4,822
4,822
Other
1,334
1,401
parties:
Ps.
2000
54,994
Ps.
86,030
1999
On March 24, 2000, the subsidiary GCC Cemento, S.A. de C.V. sold the shares of Mexalit, S.A. The sales price
Financing income, net
Ps.
1,299
Ps.
2,232
Other expenses, net
Ps.
9,751
Ps.
6,852
was similar to the market value of the shares.
5. PROPERTY, PLANT AND EQUIPMENT
3. INVENTORIES
Property, plant and equipment consist of the following at December 31:
Inventories consist of the following at December 31:
2000
2000
Buildings
Finished goods
Ps.
Work in process
72,672
1999
1999
Ps.
63,771
Machinery and equipment
Ps.
1,417,674
Ps.
1,398,638
3,645,473
3,764,429
39,192
14,922
Furniture and fixtures
351,227
341,859
Raw materials and supplies
123,925
124,178
Automotive equipment
110,512
109,005
Land held for sale
153,487
167,495
5,524,886
5,613,931
(2,449,599)
(2,447,833)
3,075,287
3,166,098
Ps.
389,276
Ps.
370,366
The allowance for obsolete and slow-moving inventories at December 31, 2000 and 1999 is Ps. 961 and
Accumulated depreciation
Net carrying value
Ps. 71, respectively, and has been deducted from “Raw materials and supplies.”
Land
332,704
336,162
Investment projects
186,489
160,610
26,173
802
Advances to suppliers
Ps.
36
ANNUAL
REPORT
[2000]
3,620,653
Ps.
3,663,672
37
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
At December 31, 2000, the net replacement value of property, plant and equipment based on the NCPI is
7. BANK LOANS
Ps. 3,760,467.
At December 31, 2000, investment projects involve the construction of a cement plant in Pueblo, Colorado,
An analysis of bank loans and long-term debt is as follows:
which is expected to be completed during the first quarter of 2003, the implantation of a new single
information system known a Project GCC “ERP”, and the construction of the so-called “Aggregates” project.
All are expected to be completed in 2001. The total investment is expected to be U.S.$ 170.0 million,
2000
U.S.$ 4.5 million and U.S.$ 6.9 million, respectively.
The Company capitalized in machinery and equipment, the comprehensive financing cost of Ps. 50,519,
which is expected to be amortized in twenty-five years.
Depreciation and amortization charged to operations of the years ended at December 31, 2000 and 1999
LOANS
CURRENCY
INTEREST
RATE
AMOUNT
CURRENT
PORTION OF
LONG-TERM DEBT
LONG-TERM
DEBT
was Ps. 189,592 and Ps. 190,064, respectively.
Depreciation was computed considering the estimated remaining useful lives of the assets determined by
management. Such lives are as follows:
REVOLVING/TERM LOAN
Comerica Bank, N.A.
Dollar
Libor+1.25
Ps.
333,036
Ps.
83,259
Ps.
249,777
Bank, N.A.
Dollar
Libor+0.375%
107,172
23,815
83,357
Chase Bank, A.G.
Dollar
Libor+0.75%
25,987
5,979
20,008
TERM LOANS
The Chase Manhattan
ESTIMATED
REMAINING USEFUL LIFE
DECEMBER 31, 2000
First National Bank
of Maryland
Dollar
Libor+0.375%
11,273
4,509
6,764
years
Banca Serfin, S.A.
Dollar
7.20% - 7.76%
17,182
7,207
9,975
14
years
Banorte, S.A.
Peso
Cetes+2.7
8,815
2,460
6,355
6
years
Bilbao Vizcaya, S.A.
Peso
CPP+1.5
2,514
1,006
1,508
6
years
Banorte, S.A.
Peso
Cetes+2.7
6,450
1,800
4,650
Banamex, S.A
Peso
Cetes+2.25
50,143
7,429
42,714
Banamex, S.A.
Peso
Cetes+ 2.25
57,226
5,920
51,306
Banamex, S.A.
Peso
Cetes+2.6
68,783
12,698
56,085
Banamex, S.A.
Peso
Cetes+2.6
48,743
8,730
40,013
Bital, S.A.
Peso
Tiie+1
2,270
349
1,921
Buildings
32
Machinery and equipment
Furniture and fixtures
Automotive equipment
SECURED BY CAPITAL ASSETS
6. OTHER ASSETS
Other assets consist of the following at December 31:
2000
1999
Ps.
739,594
Ps.
165,161
Ps.
574,433
Goodwill, net of accumulated amortization of
Ps.10,412 and Ps.9,080 at December 31, 2000 and 1999, respectively
Ps.
Preoperating expenses and software licenses
27,940
Ps.
30,562
Slow-moving spare parts inventories
31,606
42,023
9,033
7,396
Intangible asset
18,755
20,436
Other assets
31,490
37,770
Ps.
117,780
Ps.
139,231
Goodwill is being amortized by the straight-line method over a period of 15 to 20 years.
38
ANNUAL
REPORT
[2000]
39
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
Maturities on the long-term debt at December 31, 2000 are as follows:
1999
LOANS
CURRENCY
INTEREST
RATE
AMOUNT
CURRENT
PORTION OF
LONG-TERM DEBT
LONG-TERM
DEBT
AMOUNT
MATURING
YEAR ENDING DECEMBER 31
REVOLVING/TERM LOAN
Comerica Bank, N.A.
2002
Dollar
Libor+1.25
Ps.
529,944
Ps.
86,178
Ps.
443,766
TERM LOANS
The Chase Manhattan
Ps.
164,604
2003
158,522
2004
150,383
2005
49,386
2006
25,761
Thereafter
25,777
Bank, N.A.
Dollar
Libor+0.375%
141,680
25,758
115,922
Chase Bank, A.G.
Dollar
Libor+0.75%
34,576
6,467
28,109
of Maryland
Dollar
Libor+0.375%
17,070
4,877
12,193
Banca Serfin, S.A.
Dollar
7.20% - 7.76%
26,982
8,399
18,583
Banca Serfin, S.A.
Dollar
Libor+1.75
290
290
-
At December 31, 2000, the long-term debt due under the revolving and term loan to Comerica Bank is
guaranteed by the assets of Rio Grande Portland Cement Corp. and Rio Grande Materials Inc.
First National Bank
Ps.
574,433
Bancomer, S.A.
Dollar
7.28%
2,005
2,005
-
Banorte, S.A.
Peso
Cetes+2.7
12,285
2,680
9,605
The bank loans and long-term debt contain restrictive covenants and require that certain financial ratios be
Bilbao Vizcaya, S.A.
Peso
CPP+1.5
3,835
1,097
2,738
maintained. At December 31, 2000 and 1999, all of the related covenants and obligations required by the
Banorte, S.A.
Peso
Cetes+2.7
8,989
1,961
7,028
loan agreements have been fulfilled.
Banamex, S.A
Peso
Cetes+2.25
56,659
2,024
54,635
Banamex, S.A.
Peso
Cetes+ 2.25
88,782
13,836
74,946
Banamex, S.A.
Peso
Cetes+2.6
62,623
9,512
53,111
Banamex, S.A.
Peso
Cetes+2.6
64,503
-
64,503
Bital, S.A.
Peso
Tiie+1
2,853
380
2,473
SECURED BY CAPITAL ASSETS
Ps.
1,053,076
Ps.
165,464
Ps.
8. FOREIGN CURRENCY POSITION
The Company has the following U.S. dollar denominated assets and liabilities at December 31, 2000 and
1999:
887,612
(THOUSANDS OF U.S. DOLLARS)
2000
Current assets
USD
67,401
USD
63,705
Total assets
USD
67,401
USD
63,705
Short-term liabilities
26,011
18,281
Long-term liabilities
64,109
74,622
Total liabilities
90,120
92,903
Net short position
40
ANNUAL
REPORT
[2000]
1999
USD
22,719
USD
29,198
41
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
The exchange rates used to translate the U.S. dollar denominated assets and liabilities to Mexican pesos
The significant assumptions considered in determining the net period cost are as follows at December 31:
at December 31, 2000 and 1999 were Ps. 9.57 and Ps. 9.50, respectively. The exchange rate at February 12,
2001 is Ps. 9.72.
REAL RATES
Machinery and equipment is mostly imported. An analysis is as follows:
2000
2000
1999
AMOUNT
IN FOREIGN
CURRENCY
CURRENCY
AMOUNT
IN FOREIGN
CURRENCY
EXCHANGE
RATE
EXCHANGE
RATE
U.S. dollar
Ps.
118,128
Ps.
9.5700
Ps.
112,374
Ps.
9.5000
German mark
Ps.
34,440
Ps.
4.3420
Ps.
34,864
Ps.
5.0293
Danish crown
Ps.
32,470
Ps.
4.2700
Ps.
34,807
Ps.
4.8247
1999
Discount rate
4.50 %
4.50 %
Rate of pay increases
1.00 %
1.00 %
10. STOCKHOLDERS’ EQUITY
a. Capital stock is variable. The fixed minimum is Ps. 134,960, represented by 337,400,000 shares with no
par value.
b. At a regular meeting held on April 25, 2000, the stockholders declared a cash dividend of Ps. 50,208, at
Ps. 0.15 per share (Ps. 52,713 in constant pesos).
At December 31, 2000 and 1999, foreign currency denominated exports, principally by GCC Cemento, S.A.
de C.V. and Cementos de Chihuahua S.A. de C.V., were U.S.$ 22,902 (thousand) and U.S.$ 22,102 (thousand),
respectively.
c. At a regular meeting held on April 27, 1999, the stockholders declared a cash dividend of Ps. 39,939, at
Ps. 0.12 per share (Ps. 46,185 in constant pesos).
d. On several occasions during the year the Company repurchased its own shares for a total of Ps. 48,463
(7,349,122 shares) and re-placed 621,129 shares, leaving 7,333,993 as treasury shares with a value of Ps.
49,871, which represent 2.1% of the outstanding shares. The balance of the reserve available for the
9. LABOR OBLIGATIONS
repurchase of the Company’s own shares is Ps. 94,886.
e. An analysis of stockholders’ equity, excluding the deficit from restatement of stockholders’ equity and
The Company recognizes the liability for seniority premiums based on actuarial computations, using the
the adjustment for the translation of foreign subsidiaries is as follows:
projected unit-credit method.
The net period cost and the components of the seniority premium plan allowance at December 31, 2000 and
1999 are as follows:
HISTORICAL
2000
Ps.
41,146
TOTAL
1999
Capital stock
Current benefit obligation
DECEMBER 31, 2000
RESTATEMENT
INCREMENT
Ps.
Ps.
134,227
Ps.
462,351
Ps.
596,578
37,101
Additional paid-in capital
462,736
1,582,928
2,045,664
160,634
501,768
662,402
60,000
34,886
94,886
Projected benefit obligation
Ps.
45,221
Ps.
43,026
Stock premium
Unamortized transition liability
Ps.
18,816
Ps.
20,824
Reserve for repurchase of Company’s own shares
Plan assets
Ps.
330
Ps.
252
Unamortized variances in assumptions and experience adjustments
Ps.
2,322
Ps.
4,188
Net projected liability
Ps.
15,965
Ps.
16,953
Additional liability
Ps.
18,755
Ps.
20,436
Net period cost
Ps.
6,232
Ps.
6,102
Intangible asset
Ps.
18,755
Ps.
20,436
Retained earnings
1,170,071
938,862
2,108,933
Cumulative effect of deferred taxes
(897,012)
(80,372)
(977,384)
475,356
27,904
503,260
Net majority income
Total
Ps.
1,566,012
Ps.
3,468,327
Ps.
5,034,339
The unamortized items will be amortized over a period of twelve years for 2000.
42
ANNUAL
REPORT
[2000]
43
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
11. COMPREHENSIVE FINANCING (INCOME) COST
HISTORICAL
Capital stock
Ps.
134,960
DECEMBER 31, 1999
RESTATEMENT
INCREMENT
Ps.
461,618
Comprehensive financing (income) cost consists of the following at December 31:
TOTAL
Ps.
2000
596,578
Additional paid-in capital
462,736
1,582,928
2,045,664
Stock premium
160,634
501,768
662,402
Interest income
Interest expense
Reserve for repurchase of Company’s own shares
60,000
80,088
140,088
Retained earnings
851,349
908,388
1,759,737
Net majority income
354,776
47,133
401,909
Total
Ps.
2,024,455
Ps.
3,581,923
Ps.
Ps.
Exchange differences, net
Net monetary effect
5,606,378
Ps.
(66,153)
1999
Ps.
(44,938)
107,645
143,488
(750)
2,861
(87,728)
(29,860)
(46,986)
Ps.
71,551
In conformity with the Mexican Corporations Act, at least 5% of the net income of each year must be
appropriated to increase the legal reserve. This practice must be continued until the legal reserve
12. SEGMENT INFORMATION
reaches 20% of capital stock issued and outstanding.
f. Effective January 1, 1999, the corporate income tax rate was increased from 34% to 35%. However,
The Company is a Mexican corporation that operates in only one segment, which is the production and
corporate taxpayers have the option of deferring a portion so that the tax payable will represent 30% of
marketing of hydraulic cement and redi-mix concrete.
taxable income (30% in 2000 and 32% in 1999). The earnings on which there is a deferral of taxes must be
The Company’s transactions in the United States are carried out by two wholly owned subsidiaries.
controlled in a so-called “net reinvested tax profit account” (“CUFINRE”). This is basically to clearly
In the following list, the column on Mexico includes all of the domestic transactions.
identify the earnings on which the taxpayer has opted to defer payment of corporate income tax.
If the Company opts for this tax deferral, starting in the year 2000 earnings will be considered to be
2000
distributed first from the “CUFINRE” and any excess will be paid from the “net tax profit account”
UNITED
STATES
ELIMINATIONS
AND OTHERS
ADJUSTEMENTS
CONSOLIDATED
918,104
Ps.
Ps.
(“CUFIN”) so as to pay the 5% deferred tax (5% for 2000 and 3% for 1999).
Any distribution of earnings in excess of the above-mentioned account balances will be subject to
MEXICO
payment of 35% corporate income tax.
In addition, effective January 1, 1999, cash dividends obtained by individuals or residents abroad will be
44
ANNUAL
REPORT
[2000]
NET SALES:
subject to a 5% withholding tax on the amount of the dividend multiplied by 1.5385 (1.515 for dividends
Unaffiliated customers
paid from the determined balance of the “CUFIN” account at December 31, 1998).
Interarea transfers
Ps.
1,899,394
Ps.
717,277
-
(717,277)
2,817,498
-
Ps.
2,616,671
Ps.
918,104
Ps.
(717,277)
Ps.
2,817,498
Pretax income
Ps.
554,385
Ps.
22,919
Ps.
984
Ps.
578,288
Depreciation and amortization
Ps.
137,902
Ps.
51,690
Ps.
-
Ps.
189,592
Total assets
Ps.
4,203,216
Ps.
1,148,369
Ps.
984
Ps.
5,352,569
45
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
1999
UNITED
STATES
MEXICO
ELIMINATIONS
AND OTHERS
ADJUSTEMENTS
YEAR IN WHICH
ASSETS TAX WAS PAID
CONSOLIDATED
Ps.
Interarea transfers
1,620,358
Ps.
605,800
901,295
Ps.
-
-
Ps.
(605,800)
7,510
2000
234
2001
2,521,653
1993
77
2003
-
1994
46
2004
1995
2,618
2005
1996
3,319
2006
1997
514
2007
1998
30
2008
1999
1,525
2009
2000
695
2010
Ps.
2,226,158
Ps.
901,295
Ps.
(605,800)
Ps.
2,521,653
Pretax income
Ps.
406,862
Ps.
15,267
Ps.
(3,720)
Ps.
418,409
Depreciation and amortization
Ps.
143,585
Ps.
46,479
Ps.
-
Ps.
190,064
Total assets
Ps.
4,162,557
Ps.
1,154,935
Ps.
(3,583)
Ps.
5,313,909
1990
Ps.
REFUND
EXPIRATION DATE
1991
NET SALES:
Unaffiliated customers
RESTATED
AMOUNT
Ps.
16,568
d. At December 31, 2000, Grupo Cementos de Chihuahua, S.A. de C.V. and some of its subsidiaries have
13. INCOME TAX, ASSET TAX AND EMPLOYEE PROFIT SHARING
operating tax losses of approximately Ps. 39,087 that may be carried forward against taxable income of
future years. An analysis is as follows:
a. Companies in Mexico are subject to payment of the higher of either corporate income tax or asset tax.
In the year ended December 31, 2000, the Company and its subsidiaries began to determine corporate
income tax and asset tax on a consolidated basis, except for GCC Inversiones y Comercialización, S.A.
de C.V., which will begin to consolidate in 2001.
Various changes in tax consolidation rules went into effect in January 1999. One of the most important
of these changes refers to the reduction in the equity interest in subsidiaries to 60%. The Company does
YEAR IN WHICH
CONSIDERED LOSS
WAS INCURRED
YEAR IN WHICH
CARRYFORWARD
EXPIRES
AMOUNT OF
LOSS RESTATED TO
DECEMBER 31, 2000
ASSETS TAX IN
THE COMPUTATION
OF DEFERRED
INCOME TAX
not expect these changes to have a significant impact on future tax results.
b. The 1.8% asset tax (which is a minimum income tax) is payable on the average value of most assets net
of certain liabilities.
c. An analysis through 2000 of the available asset tax refund that may be requested, restated for inflation,
in future years whenever income tax exceeds the asset tax payable is as follows:
1996
2006
Ps.
1997
2007
27
9
1998
2008
2,637
923
1999
2009
23,297
8,154
2000
2010
13,112
4,589
Ps.
46
ANNUAL
REPORT
[2000]
14
39,087
Ps.
Ps.
5
13,680
47
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
e. An analysis of income tax charged to results of operations of the years ended December 31, 2000 and
1999 is as follows:
g. The major items that gave rise to a difference between the total amount of current year income tax and
the current year deferred tax determined at the statutory rate are as follows:
2000
1999
2000
Current year income tax
Ps.
Current year asset tax
Deferred income tax
50,844
Ps.
2,261
–
1,454
24,020
–
Tax computed on income before income tax
and asset tax (35% rate)
Ps.
202,401
PERMANENT ITEMS:
Total income tax and asset tax
Ps.
74,864
Ps.
3,715
Inflation component
(29,589)
Non-deductible expenses
f. The major temporary differences that gave rise to a deferred income tax liability under the new Mexican
accounting Bulletin D-4 were as follows:
JANUARY 1,
2000
DECEMBER 31,
2000
DEFERRED TAX ASSET:
Liability provisions
2,810
Monetary position result
(30,701)
Effects of restatement and other items
(70,057)
Total income tax
Ps.
74,864
The initial effect of the application of this new accounting pronouncement represented at the beginning
Ps.
25,029
Ps.
46,414
Tax losses from prior years
63,338
13,680
Advances from customers
6,849
19,767
16,200
16,568
Asset tax paid in prior years
of 2000 a decrease in stockholders’ equity and the recognition of a liability of Ps. 897,012 (Ps. 977,384
constant pesos)
h. At December 31, 2000, the Company had the following account balances for tax purposes:
Balance of restated contributed capital account (CUCA), Ps. 2,027,570.
Balance of net tax profit account (CUFIN), Ps. 34,417.
111,416
96,429
DEFERRED TAX LIABILITY:
Balance of net reinvested tax profit account (CUFINRE), Ps. 111,966.
The new Bulletin does non significantly affect the accounting for employee profit sharing.
Fixed assets
873,884
839,677
Employee profit sharing is determined basically on tax results, excluding the inflation component and
Inventories
125,503
128,979
the restatement of depreciation expense.
9,041
5,897
1,008,428
974,553
Prepaid expenses
Deferred income tax liability, net
Ps.
897,012
Ps.
878,124
14. ANTIDUMPING DUTIES
In 1990, the United States Department of Commerce (DOC) imposed an antidumping duty order on imports
of gray portland cement and clinker from Mexico. As a result, since September 1994, Rio Grande Portland
Cement Corp. (RGPC) has been subject to the payment of estimated antidumping duty deposits (which are
expensed as incurred) on imports of gray Portland cement and clinker from Mexico.
The Mexican Government initiated a formal complaint against the United States Government under the
General Agreement on Tariffs and Trade (GAAT) for alleged violations of GATT obligations in the
antidumping case. On July 9, 1992, a dispute settlement panel formed under the auspices of the GATT
determined that the United States violated the GATT antidumping code and its own AntiDumping law, by
imposing antidumping duties on Mexican cement. The panel stated that the United States must revoke the
antidumping order and refund all antidumping duties that have been paid. Although this GATT panel
decision is not independently enforceable under United States law, since November 1992, the United States
and the Mexican Governments have been engaged in consultations seeking a settlement that would include
implementation of the GATT panel recommendations.
48
ANNUAL
REPORT
[2000]
49
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
From October 1995 through April 1997, the DOC performed its Fifth Administrative Review, covering sales
15. COMMITMENTS AND CONTINGENCIES
of imported Mexican cement, made during the period from August 1994 through July 1995. The DOC
published its final determination on April 1997, establishing a dumping margin rate of 73.69%. On June
In 1996, the subsidiary Rio Grande Portland Cement Corp. (RGPC) submitted a plan to the state of New
1997, RGPC requested a review by a NAFTA Panel of the DOC’s final determination on the Review. In June
Mexico, as required in terms of state’s mining act. This plan addresses the proposed use for the plant site
1999, the NAFTA binational panel decided, among other minor issues, that the DOC incorrectly compared
at the conclusion of cement operations and any required reclamation of the land. The estimated plant
sales of both bulk and bagged cement in Mexico with only bulk cement in the United States, and instructed
closure cost is U.S.$4,800,000. At December 31, 2000, the Company has provided U.S.$595,000 for closure
the DOC to recalculate the dumping margin for the fifth review excluding from the comparisons the bagged
costs.
cement in Mexico. In November 1999, the DOC issued the final results of its review pursuant to the Panel’s
instructions, calculating a dumping margin of 44.89% (a decrease from the original 73.69%). The DOC is still
reviewing comments submitted by the parties. Once the DOC finishes its review, it will publish its final
16. DERIVATIVES
findings and will instruct the United States Customs Service to assess antidumping duties in an amount
approved by the DOC.
The Company uses financial instruments to manage well defined risks of adverse changes in the price of
From October 1996 through March 2000, the DOC performed its Sixth, Seventh, Eighth and Ninth
natural gas consumed. The derivatives are not used for speculation or for trading.
Administrative Reviews, covering sales of imported Mexican cement, made during the period from August
The Company periodically enters into natural gas agreements to control the cost of gas used. At December
1995 through July 1999. The DOC published its final determination for the Sixth Review on March 1998,
31, 2000, the Company has entered into the following forward contracts (amounts in U.S. dollars):
establishing a dumping margin rate of 37.49%. The DOC published its final determination for the Seventh
Review in March 1999, establishing a dumping margin rate of 49.58%. The DOC published its final
determination for the eighth review in March 2000, establishing a dumping margin rate of 45.98%. RGPC has
FORWARD CONTRACTS (FIXED PRICE)
requested a review by a NAFTA Panel of the DOC’s final determination on all of these administrative
VOLUME
MMBTU
CONTRACTED
PRICE
FAIR
VALUE
AMOUNT
THOUSANDS
OF DOLLARS
December
100,000
5.02
1.25
125
January
100,000
5.02
8.39
839
interest, will be refunded to RGPC. Should the actual margin be determined to be greater than the initial
February
100,000
5.02
8.29
829
margin, then additional payments, plus interest, will be required.
March
220,000
4.29
7.60
1,672
On August 2, 1999 the International Trade Commission of the United States (ITC) initiated the Sunset Review
Total
520,000
3,465
VOLUME
MMBTU
CONTRACTED
PRICE
FAIR
VALUE
AMOUNT
THOUSANDS
OF DOLLAR
reviews. This deposit rate will remain in effect until the ninth review is completed in March 2001.
In October 2000, the DOC initiated its Tenth Administrative Review, covering sales of imported Mexican
cement, made during the period from August 1999 through July 2000.
MONTH
Should the actual margin on the different administrative reviews be determined to be less than the amount
of antidumping duties already deposited with the U.S. Customs Service, the difference, together with
of the antidumping order on Gray Portland Cement and Clinker from Mexico. The ITC reviewed the potential
effect of revoking the order on the United States cement industry. On October 5, 2000, the ITC voted not to
revoke the order so customs will continue to collect antidumping deposits. GCC requested a review of this
FORWARD CONTRACTS (CAP PRICE)
decision of a NAFTA panel.
RGPC has estimated to the best of its ability, the potential refunds or liabilities for the different
administrative reviews. At the present time RGPC does not have sufficient information available to
responsibly estimate the outcome of the different appeals that have been lodged. During 2000 and 1999
MONTH
RGPC funded an irrevocable trust with U.S.$11,000,000 and U.S.$10,000,000, respectively, for estimated
December
4,167
4.73
1.54
6
antidumping costs and expenses. The purpose of the trust is to pay estimated antidumping duty liabilities
January
4,167
4.73
3.64
15
resulting from prior year reviews. As of December 31, 2000 and 1999, RGPC has accrued an additional
February
4,167
4.73
3.58
15
U.S.$1,494,609 and U.S.$2,428,000, respectively, for estimated antidumping costs. These amounts are
Total
12,501
36
included under long-term liabilities in the accompanying consolidated balance sheets..
50
ANNUAL
REPORT
[2000]
51
GRUPO
CEMENTOS DE
CHIHUAHUA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GRUPO CEMENTOS DE CHIHUAHUA S.A. DE C.V. AND SUBSIDIARIES
December 31, 2000 and 1999
(Thousands of Mexican pesos with purchasing power at December 31, 2000 and thousands of
U.S. dollars, except for per share values and exchange rates)
FORWARD CONTRACTS (TUNNEL PRICE)
VOLUME
MMBTU
CONTRACTED
PRICE
FAIR
VALUE
AMOUNT
THOUSANDS
OF DOLLAR
December
219,500
5.20
1.07
234
December
54,000
5.15
1.02
55
January
130,000
5.20
3.14
408
February
199,000
5.20
2.20
438
49,000
5.15
3.17
MONTH
February
Total
651,500
156
1,292
17. SUBSEQUENT EVENT
On December 23, 2000, Grupo Cementos de Chihuahua, S.A. de C.V., through its subsidiary GCC Dacotah,
Inc., entered into an agreement with the South Dakota State Cement Plant Commission, to acquire the
assets of Dacotah Cement, which produces various types of cement. The agreed price of U.S.$252.3 million
includes working capital of approximately U.S.$87 million. The purchase and transfer of the assets is
expected to be finalized during the first quarter of 2001.
52
ANNUAL
REPORT
[2000]
contents
investor relations
Financial
Highlights
Letter from the
Chairman
Mexico
Division
2
10
United States
Division
Operation
Centers
16
15
Board of
Directors and
Executive Staff
Members
23
Financial
Information
24
Design: A milenio3.com.mx • Photography: Vía 69/Victor Mendiola/Benjamín López • Printer: Wetmore Printing
1
The annual Stockholders’ Meeting of Grupo Cementos de
For additional information regarding the Company or decisions taken
Chihuahua, S.A. de C.V. was held at 5:00 p.m. on April 24, 2001 at the
in the Annual Stockholders‘ Meeting please contact GCC’s Planing
Hotel Westin Soberano located at Barrancas del Cobre 3211
Department at Vicente Suárez y Sexta, Colonia Nombre de Dios,
Chihuahua, Chih., Mexico.
31110, Chihuahua, Chihuahua, Mexico.
Shares representing the capital stock of Grupo Cementos de
TELEPHONE:
Chihuahua, S.A. de C.V. are listed on the Mexican Stock Exchange
(52-1) 442-3210
(BMV) under the ticker symbol GCC.
(52-1) 442-3217
(52-1) 442-3100
FAX:
(52-1) 442-3181
E - MAIL:
jfernandez@gcc.com
larias@gcc.com
HEADQUARTERS OFFICE:
Vicente Suárez y Sexta,
Colonia Nombre de Dios, 31110,
Chihuahua, Chih., Mexico
building
together
TELEPHONE:
(52-1) 442-3210
(52-1) 442-3217
(52-1) 442-3100
FAX:
(52-1) 442-3181
www.gcc.com
ANNUAL REPORT 2000

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