Good morning. Welcome to the CEMEX Fourth Quarter 2013 Conference Call and Video Webcast. My name is Lorraine, and I will be your operator for today. [Operator Instructions] Our hosts for today are Fernando González, Executive Vice President of Finance and Administration; and Maher Al-Haffar, Vice President of Corporate Communications, Public Affairs and Investor Relations. And now I will turn the conference over to your host, Fernando González. Please proceed. Fernando A. González: Thank you, operator. Good day to everyone, and thank you for joining us for our fourth quarter 2013 conference call and video webcast. After Maher and I discuss the results of the quarter, we will be happy to take your questions. During 2013, we continued to deliver. The performance of our regions during the year exceeded our expectations, with the exception of Mexico. For the full year, operating EBITDA grew by 4% on a like-to-like basis to $2.64 billion, after adjusting for onetime effects. Improvement in pricing and volume in most of our regions, the favorable operating leverage affecting the U.S., as well as our continued initiatives to improve our operating efficiency, led to the third consecutive year of EBITDA growth. Operating EBITDA margin on a comparable basis expanded by 0.3 percentage points. During the fourth quarter, our operating EBITDA increased by 6% on a like-to-like basis compared with the same period last year. Consolidated cement, ready-mix and aggregates volumes increased by 4%, 2% and 3%, respectively, during the quarter. All of our regions enjoyed higher cement and aggregate volumes, with the exception of Mexico, where cement volumes were flat. For the full year, aggregates volumes increased by 2% while ready-mix volumes remained flat. Cement volumes declined by 1% in the same period, mainly due to the weakness we experienced in Mexico. During the year, we achieved…

Thank you, Fernando. Hello, everyone. Our operating EBITDA increased by 6% during the quarter on a like-to-like basis, while EBITDA margin remained stable. Operating EBITDA for the full year increased by 4% on a like-to-like basis and adjusting for one-off items. Operating EBITDA margin, also on a comparable basis, increased by 0.3 percentage points. This margin expansion was driven by higher prices in most of our regions, our cost reduction efforts, as well as the continued favorable operating leverage in the United States. Cost of sales plus operating expenses as a percentage of net sales decreased by 1.8 percentage points during the quarter and by 1.3 percentage points during the full year versus the same period last year. The decline includes a reduction in workforce and other cost-reduction initiatives. Our kiln fuel and electricity bill on a per-tonne-of-cement-produced basis increased by 1% during both the fourth quarter and full year 2013 versus the comparable periods in 2012. We continue to increase the use of alternative fuels during 2013. As we have stated in the past, substituting primary fossil fuels with alternative fuels has several advantages. First, they are cheaper. During 2013, we achieved savings of about $135 million by using alternative fuels instead of fossil fuels. This is about 23% of total cement fuel bill in the same period. Second, when using alternative fuels with biomass content, a portion of the CO2 emissions are considered carbon-neutral, reducing the number of emission allowances utilized by some operations. And third, alternative fuels are generally quoted and purchased in local currencies, reducing the volatility of our margins resulting from exchange rate fluctuation. During the quarter, our free cash flow after maintenance CapEx was $216 million compared with $228 million in the same period in 2012. During the quarter, we had higher maintenance CapEx…

Before we go into our Q&A session, as usual, I would like to remind you that any forward-looking statements we make today are based on our current knowledge of the markets in which we operate and, of course, could change in the future due to a variety of factors beyond our control. In addition, unless the context indicates otherwise, all references to pricing initiatives, price increases or decreases refer to our prices and our products. And now we will be happy to take your questions. Operator?

[Operator Instructions] And our first question comes from Carlos Peyrelongue from Bank of America.

Two questions, if I may, first one related to prices. If you could provide some color on the Mexican market. Prices decreased 3% quarter-over-quarter on the fourth quarter. Can you comment on your strategy going forward and also something related to what occurred during the fourth quarter for this decrease in prices. And then the second part would be to the U.S. Prices have been improving. You, I believe, mentioned that you have announced price increases. Can you comment on the size of those price increases in the U.S.? Fernando A. González: Yes. Well, I can start with the first question, Carlos. In the Mexican market, during 2013, the price environment was quite challenging. So we lost some prices during the year. Now what is it that we are doing? After looking at the last quarter behavior on volumes in Mexico, we decided to announce a price increase, valid starting January 1, of about -- I think it's about 8%. So -- and as far as I know, as far as it goes, it seems to be -- to have traction. So again, last year, it was a weak environment for pricing. And last quarter, because of what we saw in volumes, to some extent the acceleration of certain sectors, we decided to increase prices starting January 1. You want take the second one?

Yes, sure. Yes. Carlos, thank you for the question. In the U.S., as you know, we have announced last year 2 pricing increases for this year. The early year pricing increase is phased in over 2 periods, January and April. In January, prices were increased in Colorado and Florida. These are the 2 markets that have exhibited some of the biggest growth in our portfolio. Colorado saw an $8 per metric ton pricing increase in January, Florida is $11 per metric ton in January. We have gotten very good traction on those pricing increases, and we hope that situation will continue for the year. In -- for the spring prices, we've announced a $16.50 pricing increase per metric ton for April for northern California, and for Southern California, where the markets are a little bit weaker, we announced an $11 per metric ton for April. And we're getting also some very good response in those markets. In Texas, we've announced an $11 per metric ton in April. And also there, we're getting -- as you know, that market is sold out and is quite tight, and we're getting very good traction there. On ready-mix prices, those will be increasing locally as contracts expire during the course of the year. I don't know if that's -- and we're very optimistic with the traction that we're seeing for both the January and the April pricing increases.

Okay. That's very promising, great. Very clear. And the last question is related to taxes and to changes on fiscal consolidation. Am I reading it correctly that the total impact you're estimating from these changes in Mexico is an impact on increasing deferred taxes of $709 million? Is that correct? Fernando A. González: $700 million and what?

$709 million. Fernando A. González: Okay. Well, as you know, the -- last year, we had the tax reform in Mexico. And we were still having the impact of the reform done in 2010. And in this new 2014 reform, most of the impact is coming from a type of a retroactive taxation of intercompany dividends. So the amounts that -- the impact, the amount itself it's -- let's say, the adjustments done during 2013 because of the reforms done in Mexico was about $200 million and something. I don't remember the exact amount. But it's around $220 million or so. And the adjustments expected for 2014, and this is according to the guidance we are providing, is around $320 million. So that's, again, because of adjustments of -- due to the tax reform done last year. So that's, more or less, the impact that we will have in 2014. So net-net, the increase compared to 2013 is about $100 million and -- because of the adjustments in Mexican laws and regulations. And then there are some other increases because -- as you can imagine, it's because we do expect income growth during 2014. An additional comment I was going to make is that we shouldn't -- we don't have a reason to think that we should expect any other additional increase to the numbers we're providing for 2014. I'm referring now specifically to adjustments because of Mexico's reforms.

Fernando, on Page 17 of the report, you provide a lot of visibility into your payment of deferred taxes related to consolidation. And in that page, there is 1 item called effects of tax deconsolidation, an increase of $709 million is the that one I was referring to. And therefore, if we compare this total number that you now have in deferred taxes to be paid of $1.9 billion versus the previous quarter, where you had close to $1.2 billion, so the total increase for the next 5 years is $700 million. Is that correct? I understand that, for 2014, its only $128 million, but the total amount increase that you show on Page 17 versus the previous quarter is about $700 million. Is that correct? Or am I doing something wrong? Fernando A. González: No, no, no. You are reading right. That is correct, and I was referring to the specific impact in 2014 only.

And our next question comes from Vanessa Quiroga from Crédit Suisse. Vanessa Quiroga - Crédit Suisse AG, Research Division: My question is regarding the Mexico margins, a follow-up on that. So are there any other initiatives besides price increases that could drive margins higher for your Mexico operation in the -- in 2014 and onwards? And the other question is about the taxes. Is there any measure that you could implement to reveal the tax burden going forward on CEMEX? And if you could give any color -- on the retail side you chose not to adhere to the new integration readings [ph] . Fernando A. González: Okay. Well, on the first part, Vanessa, we always have efforts to continue increasing our productivity and efficiency, and Mexico this year won't be an exception. We don't have the specific value to share. But efforts on additional -- increasing efficiencies and productivity will continue happening. Now as I think we have already commented, main reason why margins in Mexico were affected is the challenging environment in prices. Now regarding taxes, Vanessa, we continue analyzing all options available, and this is no different to what we normally do. We try to understand and to develop the most efficient tax scheme for the company. And as you may know, the reform is done but there might be still additional changes, let's say, miscellaneous or other directives that we need to be prepared and we need to understand and to act accordingly. I don't have any specific measure right now to describe, rather than saying we continue analyzing it. We look forward to have the most tax efficient scheme for the company and we will use all resources. Vanessa Quiroga - Crédit Suisse AG, Research Division: Okay. Fernando, just to be more specific about the Mexico comment regarding initiatives, are there specific measures that you're applying in 2014 that can make us expect margin increases? Or are you referring to your sustained efforts to increase efficiencies? Fernando A. González: The -- as commented, I don't have right now, but I will double check. But part of the savings we did in -- or all of the savings we did in '13 will happen, of course, in '14. They were not a onetime thing. Plus, we do expect additional savings, but I don't have any specific amount to share today. But I will come back to you, Vanessa, if I find that information is material.

And our next question comes from Benjamin Theurer from Barclays.

I have 2 questions, one related to South, Central America. On Panama and the news on the, well, suspension of the current work at the canal expansion. Do you see -- what kind of impact do you see there just because of the overrun on the budget here? So what's the impact there? And what could we expect to see here in terms of that? Despite your expectations, volumes are down already for this year. And then the second one, if we go to the European region here, especially on the projection with Holcim and then obviously, on your guidance, what you have for Germany and Poland, does the guidance include what is expected to hopefully improve from the transaction with Holcim? Or is that pending the approval? And then obviously, the synergies you might get there? Fernando A. González: Okay. Well, in the case of Panama, if I understood correctly, there is this issue between authorities in Panama and the construction company. We are not involved in that issue, and we're not affected because of their issue. We provided the materials. It's almost done, and we are not exposed. And again, there is no information we can provide because we are not part of it and we don't have any inside information on the process. But we don't expect ourselves to be affected because of this specific issue. Now in the case of the potential transaction with Holcim assets in Europe, we are moving forward in the legal process, and we are in collaboration, together with Holcim, with all the requirements done by authorities in order for them to give their recommendation on this transaction, which we currently expect to happen by midyear. So midyear, June, July, we will know the final determination from the European or the different authorities in Europe involved in this transaction. And you were also asking if the guidance includes any benefit of this transaction. It is not included. So once we proceed with the transaction according to the final recommendation from authorities, we will get back to specific benefits of this transaction. But so far, it's not included.

And now we have a question from the webcast.

The question from the webcast is from Michael Plancy [ph] from ING. And the question is why did margins decline so much in Northern Europe and the Mediterranean regions? Fernando A. González: You want to take that?

Sure. Yes, Michael, just very quickly on the Mediterranean. The big reason really is -- I'm sorry, not the Mediterranean, the Northern European, the big reason is the adjustment that we had in 2012 for the pension fund in the U.K., which was approximately $70 million. If you adjust for that, then EBITDA, instead of the reported minus 18%, would be minus 1% and the margin would be essentially flat instead of being slightly -- 1.7 percentage points tighter. On the Mediterranean, it's primarily driven by the CO2 sales that we had in 2002 that are much higher than what we did in 2013. If we adjust for that, for the full year, then the EBITDA would be actually positive 9% and the margin would actually be higher by about 1 percentage point. For the quarter, the difference is even more material. The EBITDA on an adjusted basis instead of being minus 5% would be plus 28%. And the margin instead of being lower by close to 3.5 percentage points would be up by slightly more than 2 percentage points, about 2.3 percentage points higher. I hope that addresses your question.

And our next question comes from Gordon Lee from BTG.

Two quick questions, both on the balance sheet, actually. The first is on the converts, I'm curious, maybe you could describe the mechanics through which you determine what portion of their face value should be debt and what portion should be equity. My assumption would have been that as the stock rises and, therefore, the probability to convert it increases, that you would probably think of it more as equity than debt. But looking at the balance sheet, it would seem like the opposite has happened. So I was wondering why that is the case. And then second, I was wondering if you could just walk us through quickly what you did with the cap calls as far as what impact that will have -- when you will actually get delivery of those 7.7 million CPOs and how that runs through the income statement, that would be great. Fernando A. González: Okay. If I may start with the second question, Gordon. On the cap calls, I'm referring to the cap calls that are due in 2015, March 2015. What we did, and the transaction is already done, it's finished, is that we exchanged the call we made, I think it was in 2010, for a lower-risk security after monetizing the call. We just finished the transaction this week, and we were very fortunate because we did the transaction in a couple of weeks with reasonable values on our ADRs. And we ended up having, let's say, new calls for 7.7 million ADRs at 0 strength[ph] . So what we have now is this specific 7.7 million ADRs or calls-induced ADRs. And of course, we are exposed to the value of the share. Now why is it that we did it? Well, simple, it's a call, it's too much '15 -- sorry, '14, and we thought that we -- it was advisable and prudent to exercise and to monetize this call during this period of time.

And I think there was -- so the first part, Gordon, on the convertibles, the split is actually determined at the issuance of the bonds and does not change as the stock changes -- as the stock price variation takes place over time. So I hope that addresses your question as well.

I was asking whether that split changes over time because in your -- in the press release you say one of the reasons why debt actually increased during the quarter was because of that portion allocated from the convertibles to debt. So will that continue to increase over time?

Let me just -- coupons, you know what, let me get back to you on that, okay? I'd like to -- I would like to research it, and we'll get back to you.

Perfect. That's great. And if I could just have one final quick follow-up, which is on the operational side. This is just out of curiosity. Obviously, given what's been happening in Puerto Rico, which has been widely covered in the press, could you tell us more or less what percentage of your South, Central American and Caribbean EBITDA comes from Puerto Rico? Fernando A. González: It's not relevant.

I mean -- just give us a second to take a look at it. Or what we'll do is that, maybe we'll get back to you on that. It's a fairly small amount, Gordon.

And our next question comes from Yassine Touahri from Exane.

I got 2 questions. My first question would be on the U.S. The increase in sales is approximately equivalent to the increase in EBITDA. It's been quite impressive. Flow-through from sales to EBITDA is nearly 100%[ph] . Would you expect this to continue in 2014? And I'd just like also to understand what's driving this. Is it because you increased prices -- because you have price increases that are higher than cost inflation? Or is this because of your local input [ph]? That will be my first question.

Yes. Would you like me to take that? Fernando A. González: Yes. Go ahead.

Yes. Yassine, that's a very good question. I mean, I think the incremental sales for the quarter were $63 million and the incremental increase in EBITDA was about $64 million, which will give you slightly higher than 100% operating leverage, broadly defined. The reality is that we've over-accrued in the beginning of the year for some compensation. And if you adjust for that over-accrual, we are probably in line with the annual level of operating leverage, which is about 80%. And most of that is, obviously, driven by the success in our pricing and in our volumes and, of course, the operating leverage that is pent up in the business, the capacity utilization operating leverage. And certainly, looking into 2014, we're expecting not a major change from that type of operating leverage.

And my second question would be on Mexico. I know some of the volumes are a little bit better. Could you give us a feeling about the early 2014? What have you seen in January? And I just wanted to make sure that I understood correctly the price increase that you have announced in bulk and bagged cement. You had 8% and 9%? Fernando A. González: Yes. It is right on the amount of price increases for cement, bagged and bulk. And in the case of volumes, what we can comment, January is 1 month, so it might not be that representative of what is happening, but it's also good news. But in the case of infrastructure, which if you remember is about close to 25% of our volume, and we do expect that to increase 10% during the year. And the reason why is because we saw, during the last quarter, an improvement in infrastructure compared to the third quarter. If you remember, last year, we were startled with what we saw. It was delays on investments in infrastructure. But the last quarter, we saw that volumes on this sector improved compared to the previous one. We understand that slightly above of 40% of the budget of the communications and transport ministry were spent in 3 months, from September to November. So that was one of the reasons why things started changing. We have seen, and I suppose other people have seen also, an increased activity in the bidding process for these infrastructure projects. And recently, the communication and transportation ministry has announced that a little bit more than 40% of the 2014 budget for growth[ph] was already in the bidding process. So that's very encouraging. Plus some additional information, you might already have it, that the budget for the communications and transport ministry of 2014 is almost 50% higher than last year. The current pipeline [ph] for instance, for pavings and dams is 40% higher than last year. So all of these are very encouraging signs for the infrastructure sector. And also, as mentioned, for the self-construction sector, there are other positive signs, like remittances, the trend in remittances changing. And so that makes us feel quite confident on the guidance we are providing for 2014 volumes in Mexico.

And have your competitors followed the price increase that you've announced in January? Fernando A. González: I think you should ask our competitors.

Our next question comes from Jacob Steinfeld from JPMorgan. Jacob A. Steinfeld - JP Morgan Chase & Co, Research Division: A bit of a follow-up to the last question. You had mentioned that you expected formal housing sector in Mexico to decline by single digits next year. But I was just -- you also mentioned that you expected subsidy to double, and that you expected higher growth in the country, higher remittances, and clearly, there was a very low base from the largest homebuilders this year. So I'm just trying to tie those comments together. I don't know if you could provide a little bit more color. Fernando A. González: Okay. I think, trying to summarize on about -- on infrastructure, I already commented, as you know. We think it's going to grow double digits because of the things that I mentioned before. Informal housing we think is going to be growing again because of the economic activity in Mexico, plus increasing remittances. That's a change in trend late last year and we think is going to continue happening during the year. And in the case of the formal housing, which account for a little bit less than 20% of the volume, we think it's going to decline low-single digits. Last year was very difficult for this sector. It will tend to stabilize during this year, but will drag the result of the 2014 as a result. The sector still needs time to adopt the new rules. The sector did perform better towards the last part of last year, and that trend should continue. Housing starts are in upward trend since about mid last year, and we do see smaller players in this sector, meaning construction companies, developers taking the lead on certain works. But again, this is going to…

We have time for one last question, and it will come from Aaron Holsberg from Santander.

What is your target debt ratio, covenant debt ratio for the end of the year? And do you think this year you might reach it by actual debt reduction, in addition to growing EBITDA, I mean paying down debt rather than replacing it? Fernando A. González: Debt ratio for the end of the year, given that we are not providing guidance, this is one of those pieces of information that we don't provide as such. And reducing debt, I think, during 2014, most of the deleveraging we're going to have is mainly because of EBITDA growth rather than reducing in significant amounts our balance in debt.

So you're not expecting significant free cash flow? Fernando A. González: No. So again, deleveraging will be mainly or mostly coming from EBITDA growth.

I would now like to turn the call over to Fernando González for closing remarks. Fernando A. González: Okay. Well, thank you very much. And in closing, I would like to thank you, all, for your time and attention, and we look forward to your continued participation in CEMEX. Please feel free to contact us directly or visit our website at any time. Thank you, and good day.

And thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.