Investment   Financing    

Average forex rate, RP/$ 10.000Equity (in RP) 11.000.000.000

Cost installed capacity ( per ton) $110 Debt  Installed capacity (tons) 20.000 RP debt 2.750.000.000Investment in US$ 2.200.000 US$ debt 8.250.000.000Investment in RP 22.000.000.000 Total 11.000.000.000PPE (in RP) 17.600.000.000  Annual depreciation (RP) 1.760.000.000      

Cemex Enters Indonesia

Assumption:

In year 1 to year 3 Indonesian inflation remained at position 30%, the next year that is year 4 and year 5 start gradually improved at the level of 20%. Along with the improving economy and the inflation rate of Indonesia, cement production began to increase. This is due to the increasing demand for cement products. The production increased gradually that is 30, 40, 50, 60, up to 70%. However, even so, the results of calculations project shows the project is not feasible because the NPV is still negative.

Cost of Capital: CEMEX (Mexico)Risk-free rate 6%   Cemex Beta 1,5

Credit spread 2%Equity premium 7%

Cost of debt 8% Cost of equity 16,500%Cost of debt, after-tax 5,20% % equity 60%% debt 40%   WACC 11,9800%

Cost of Capital: CEMEX INDONESIA

Risk-free rate 33%  Cemex Indonesia 1

Credit Premium 2%Equity premium 7%

Cost of debt in Rupiah 35% Cost of equity 40%Cost of debt, after-tax 24,50% % equity 50%Cost of US$ debt 39%  Cost of US$ debt, after-tax 27,18% 13%% debt 50%   WACC 33,257%

Semen Indonesia Debt Service Schedule

Project Year Year 0 Year 1 Year 2 Year 3Spot Rate (Rp/$) 10.000 12.621 15.930 20.106  Indonesian Loan @ 35% for 8 years (million Rp) Loan Principal 2.750.000 2.654.061 2.524.543 2.349.694Interest Payment (962.500) (928.921) (883.590)Principal Payment   (95.939) (129.518) (174.849)Total Payment   (1.058.439) (1.058.439) (1.058.439)         Cemex Loan @ 10% for 5 years (million US$)Loan Principal 825 689,9 541,2 377,7Interest Payment (82,5) (69,0) (54,1)Principal Payment (135,1) (148,6) (163,5)Total Payment (217,6) (217,6) (217,6) Cemex loan converted to Rp (million Rp)Scheduled @ Rp10,000/$Interest Payment (825.000) (689.867) (541.221)Principal Payment (1.351.329) (1.486.462) (1.635.108)Total Payment (2.176.329) (2.176.329) (2.176.329) Actual (@ current spot rate)Interest Payment (1.041.262) (1.098.949) (1.088.160)Principal Payment (1.705.561) (2.367.915) (3.287.494)Total Payment (2.746.823) (3.466.864) (4.375.654) Cash flow in RP on Cemex Loan (million RP)Total Actual Cash Flow 8.250.000 (2.746.823) (3.466.864) (4.375.654)IRR of cash flow: 39% Foreign Exchange Losses on Cemex Loan (million RP)Forex Loss on Interest: (216.262) (409.082) (546.940)Forex Loss on Principal: (354.232) (881.453) (1.652.385)Total Forex Loss on Debt:   (570.494) (1.290.535) (2.199.325)

Semen Indonesia Pro Forma Income Statement

Project Year Year 0 Year 1 Year 2 Year 3Spot Rate (Rp/$) 10.000 12.621 15.930 20.106Sales Volume 6.000 8.000 10.000Sales Price ($) 58 58 58Sales Price (RP)   732.039 923.933 1.166.128Total Revenue ('000) 4.392.233 7.391.460 11.661.284 Cash costs ('000) (690.000) (1.196.000) (1.943.500) (2.384.640)Additional production costs ('000) (120.000) (208.000) (338.000)Loading costs ('000) (151.456) (262.524) (426.602)Shipping costs ('000)   (757.282) (1.312.621) (2.133.010) (2.982.938)Total (1.718.738) (2.979.146) (4.841.112) (6.396.604) Gross Profit 2.673.495 4.412.314 6.820.172

 License Fees (87.845) (147.829) (233.226)General & Admin Expenses (351.379) (665.231) (1.166.128) (1.793.347)EBITDA 2.234.272 3.599.254 5.420.818  Depreciation & Amortization (1.760.000) (1.760.000) (1.760.000) (1.760.000)EBIT 474.272 1.839.254 3.660.818  Interest on Cemex Debt (825.000) (689.867) (541.221)Forex Losses on Debt (570.494) (1.290.535) (2.199.325) (3.346.341)Interest on Local Debt (962.500) (928.921) (883.590)EBT (1.883.722) (1.070.070) 36.683  Income taxes (30%) 0 0 0 Net Income (RP) (1.883.722) (1.070.070) 36.683 Net Income ($ million)   (149) (67) 2

Capital Budget: Cemex Indonesia (million RP)

Project Year Year 0 Year 1 Year 2 Year 3Spot Rate (Rp/$) 10.000 12.621 15.930EBITDA 2.234.272 3.599.254 5.420.818 Recalculated taxes (@30%) (670.282) (1.079.776) (1.626.246)Net Operating cashflow 1.563.990 2.519.478 3.794.573 Additions to NWC (240.670) (139.028) (436.049)Initial Investment (22.000.000)Terminal Value Free Cash Flow (FCF) (22.000.000) 1.323.320 2.380.450 3.358.524 NPV @ 33.257% ($10.113.055)IRR 14,6%      

Capital Budget: Cemex Indonesia (million RP & million US$)

Project Year Year 0 Year 1 Year 2 Year 3Spot Rate (Rp/$) 10.000 12.621 15.930 20.106 Dividend Remittance

Dividends paid (RP) 0 0 18.341 Withholding tax @ 15% 0 0 (2.751)

Net dividend remitted (RP) 0 0 15.590 Net dividend remitted ($) 0 0 1

 License Fees Remittance

Fees remitted 87.845 147.829 233.226 Withholding tax @ 5% (4.392) (7.391) (11.661)

Net dividend remitted (RP) 83.452 140.438 221.564 Net license fees remitted ($) 6,6 8,8 11,0

 Debt Service Remittance

Promised interest paid ($) 82,5 69,0 54,1 Withholding tax @ 10% (8,25) (6,90) (5,41)Net interest remitted ($) 74,3 62,1 48,7

Principal payments remitted ($) 135,1 148,6 163,5  

Capital Budget: Parent Viewpoint (US$ million) Dividends 0,0 0,0 0,8 License fees 6,6 8,8 11,0 Debt service 209,4 210,7 212,2 Total 216,0 219,6 224,0  Initial Investment (1.925)Terminal Value Free Cash Flow (FCF) (1.925) 216,0 219,6 224,0 NPV @ 17.98% (863,88)

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