We have built a portfolio of assets with sustainable, profitable, long-term growth potential. Looking forward, we will continue to: Focus on our core business of cement, ready-mix concrete, and aggregates Provide our customers with the best value proposition Grow profitably through integrated positions across our industry's value chain Allocate capital effectively Integrate acquisitions quickly and achieve optimal operating standards

Focus on our core business of cement, ready-mix concrete, and aggregates
Our portfolio of cement, ready-mix concrete, and aggregates assets is concentrated in markets that provide sustainable top- and bottom-line growth throughout the economic cycle. Over the past decade, our consolidated revenue and EBITDA have increased at compounded annual growth rates of 19% and 14%, respectively.

We intend to continue geographically diversifying our cement, ready-mix concrete, and aggregates assets and vertically integrating our operations in new and existing markets by acquiring or developing complementary assets along the value chain. By managing our cement, ready-mix concrete, and aggregates assets as one integrated business rather than as distinct businesses, we make them more efficient and profitable.

Provide our customers the best value proposition
We always work to provide superior building solutions in the markets we serve. To this end, we tailor our products and services to suit customers' specific needs-from home construction, improvement, and renovation to agricultural, industrial, and marine/hydraulic applications. Our porous paving concrete, for example, is ideal for sidewalks and roadways because it allows rainwater to filter into the ground, reducing flooding and helping to maintain groundwater levels. Whereas, our significantly less permeable and highly resistant concrete products are well-suited for coastal, marine, and other harsh environments.

We also see abundant opportunities to deepen our customer relationships by focusing on more vertically integrated building solutions rather than separate products. By developing our integrated offerings, we can provide customers with more reliable, higher-quality service and more consistent product quality.

Grow profitably through integrated positions across the value chain
We see ample opportunity for profitable growth, across three avenues in particular: 1) organic growth from our existing portfolio; 2) EBITDA growth from disciplined investments in our existing businesses, which improve our margins and/or increase our production capacity; and 3) the long-term acquisition of new operations in our existing or new markets.

Our potential for growth increases substantially when we look down the cement value chain. Today we estimate that our industry's total value chain produces EBITDA of US$85 billion. In 2007 we generated EBITDA of US$4.59 billion or approximately 5% of our industry's total. Thus, we see substantial long-term opportunity for us to acquire new operations and leverage our existing assets, expertise, and infrastructure to intensify our strategic growth across the value chain.

Allocate capital effectively
We complement the organic growth of our business with strategic acquisitions and capital investments. As a leading industry consolidator, we take a disciplined approach to capital allocation. We evaluate potential acquisitions in light of three investment criteria:

1. The acquisition should provide a return on our investment that is well in excess of our weighted cost of capital.
2. The acquisition should allow us to maintain our financial strength and investment-grade credit quality.
3. Factors that we can influence, in particular the application of our management and turnaround expertise, should principally drive the potential for increasing the acquisition's value.

Our recent acquisition of Rinker meets all of these criteria and is consistent with our business strategy. First, the acquisition will provide a return on our investment that is well in excess of our cost of capital. It also is immediately accretive to our free cash flow.

Second, the acquisition allows us to maintain our financial strength and investment-grade credit quality. The transaction enhances our earnings quality, lowers our weighted average cost of capital (WACC) from 7.9% to 6.8%, and will yield our target return on capital employed of 10% over the medium term.

Third, the acquisition leverages our management expertise, integration skills, and global operations network. The transaction considerably strengthens and further diversifies our positions in the aggregates and ready-mix concrete segments of the industry value chain. The company's strong presence in key regions of the US complements our existing operations, considerably enhancing our ability to serve customers in that market. It also gives us a major position in the growing market of Australia and a small entrée to China. Although this acquisition is based on much more than its potential synergies, we expect to realize approximately US$400 million from 2008 through 2009.

In 2007 we made expansion capital expenditures of US$1.43 billion. During the year, we continued the expansion of the Balcones plant in New Braunfels, Texas in the US; we sustained construction of new kilns at the Yaqui and Tepeaca plants in Mexico; we continued construction of a new cement mill and dry mortar plant at the Port of Cartagena in Spain; we undertook the construction of a new kiln at the Broceni plant in Latvia; we continued building a new grinding facility in Dubai, United Arab Emirates; and we began construction of a new grinding and blending mill at the Port of Tilbury in the United Kingdom. We also announced the construction of a new kiln in Panama and a new cement manufacturing facility in Arizona in the US.

To maintain the flexibility necessary to pursue future growth opportunities, we aim to sustain our strong free cash flow and financial structure by reducing our debt levels, optimizing our borrowing costs and debt maturities, and increasing our access to various capital sources. We remain committed to achieving a net-debt-to-EBITDA ratio of 2.7 times by mid-2009. We intend to make significant progress towards this objective during 2008. We have targeted to achieve a level of close to 3.0 times net debt to EBITDA by December 2008.

Integrate acquisitions quickly and achieve optimal operating standards
We are always looking for ways to improve our productivity and operating efficiency. Toward this end, we have implemented several standardized platforms to reduce our costs, streamline our processes, and extract synergies from our global operations. We have also taken various steps over the past several years to improve our overall product quality and the environmental impact of our operations.

With each acquisition, we have further refined the technological and managerial processes required to integrate new operations into our corporate structure. Consequently, we were able to complete the core post-merger integration process of Rinker in less than six months.

Alignment with investor interests

Employee stock-ownership plan
To better align our executives' interests with those of our stockholders, we began offering executives a new stock-ownership program in 2005. The plan's goal is to move our company's long-term incentives from stock options to programs based on restricted stock, which we believe is more highly valued by our executives and stockholders. As of December 31, 2007, our executives held 99,032,580 restricted CPOs, representing 1.3% of our total CPOs outstanding.

Corporate governance
We are committed to the highest standards of corporate governance. Our company's board of directors is composed of qualified directors who provide appropriate oversight. The requirement of independence of the audit committee members satisfies applicable law, and at least one member of our audit committee meets the requirements of a "financial expert", as defined by the Sarbanes- Oxley Act of 2002 (SOX).

We also have designed and deployed 1) a formal internal process to support the certification by our chief executive officer and our executive vice president of planning and finance of the information that we present in CEMEX's annual report to the US Securities and Exchange Commission; 2) a system to ensure that relevant information reaches senior management in a timely manner; 3) a system for anonymously and confidentially communicating to the audit committee complaints and concerns regarding accounting and audit issues; 4) a process for anonymously and confidentially submitting complaints related to unethical conduct and misuse of assets; and 5) a task force to follow legal requirements and best corporate-governance practices and, when appropriate, propose further improvements. Moreover, we have modified our code of ethics to reflect the requirements of SOX.

We are in compliance with the applicable sections of SOX and have successfully complied with section 404 thereof.