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CEMEX 2011 ANNUAL REPORT
transforming
our world for
a better future
next>

Table of contents

  • Page 1
    transforming our world for a better future CEMEX 2011 ANNUAL REPORT next>

  • Page 2
    ... OUR WORLd 12> sELECTEd CONsOLidATEd FiNANCiAL iNFORMATiON 14> COMPANY OVERViEW 17> MANAgEMENT disCUssiON ANd ANALYsis 18> gLOBAL REViEW OF OPERATiONs 22> CAPiTAL MARkET iNiTiATiVEs ANd OThER RELEVANT EVENTs 25> FiNANCiAL sTATEMENTs 105> TERMs WE UsE 106> BOARd OF diRECTORs 107> EXECUTiVE COMMiTTEE...

  • Page 3
    .... For statements of operations accounts, these figures result from translating the local currency amounts into Us dollars at the average exchange rate for the year, which approximates a convenience translation of the Mexican peso results for 2011 and 2010 using the average exchange rates of the...

  • Page 4
    ... the year, we saw favorable volume dynamics in Mexico, Northern Europe, and the south, Central America and the Caribbean region. As a result of our pricing strategy, we have more than covered input cost inflation in our ready-mix concrete and aggregates businesses. however, we have only partially...

  • Page 5
    ... sheet, nurturing world-class human resources, and defining profitable and sustainable strategies; fourth, reshaping our portfolio so that we are in the right businesses in the right markets with the right returns; and fifth, incentivizing our executives to act like owners. lorenzo H. Zambrano...

  • Page 6
    ... Accordingly, key market-oriented functions, such as technology, energy, trading, and procurement, were transferred from our corporate headquarters to these business units-decentralizing authority and increasing accountability at regional levels. CEMEX San Antonio offices in Mexico City < previous...

  • Page 7
    ... to ensure the long-term success of our company. La Yesca Dam in Jalisco and Nayarit, Mexico Two dedicated ready-mix concrete plants installed for construction of the 207-meter wall "Our top management is deeply committed to the core values that have defined CEMEX throughout our history, and that...

  • Page 8
    ..., we are building our employees' understanding of value management through our global training programs. We are also redrawing our compensation system, so our managers are rewarded for the variables they control and the value they create. Panama Canal in Panama 500,000 tons of cement for the third...

  • Page 9
    .... Led by our global Center for Technology and innovation (gCTi) in switzerland, our researchers design advanced building materials that fulfill our customers' increasingly demanding performance requirements. CEMEX recently launched two new global ready-mix concrete brands-Promptis and hidratium...

  • Page 10
    ... France, we addressed the special architectural needs of French soccer star Zinedine Zidane's new sports center, designed in dominant shades of black. In harmony with the architect's concept, CEMEX 15 5 0 05 06 07 08 09 10 11 delivered specialty black Advanci Architectonique ready-mix concrete...

  • Page 11
    ... Mexico-equal to the annual emissions from 900 thousand homes. "We are developing new business solutions, improving our customer focus, and deepening our commitment to sustainability in ways that will improve our bottom line." -Ignacio Madridejos President CEMEX Northern Europe Chelm Cement Plant...

  • Page 12
    ...affordable housing initiative helps low-income families in developing countries to obtain quality concrete housing. Through this program, we not only supply these families with inexpensive, reliable building materials and services, but also assist them to find the right financial solutions to secure...

  • Page 13
    ...CEMEX, S.A.B. DE C.v. AND SuBSIDIARIES in millions of Us dollars, except Adss and per-Ads amounts operatIng results Net sales Cost of sales1, 2 Gross profit Operating expenses2 Operating income Other expenses, net Financial expense Financial income Comprehensive financing result3 income before taxes...

  • Page 14
    ...net of income tax, for the years 2007, 2008, and 2009 in a single line item as "discontinued Operations" (see note 3B to the 2011 Annual Report's Financial statements). 5. in 2000, a dutch subsidiary of CEMEX issued preferred stock for US$1.5 billion in connection with the financing required for the...

  • Page 15
    ... global companies in our industry, with approximately 44,000 employees worldwide. Today, we are strategically positioned in the Americas, Europe, Africa, the Middle East, and Asia. Our operations network produces, distributes, and markets cement, ready-mix concrete, aggregates, and related building...

  • Page 16
    ... professional managers. "This transformation is about capturing the untapped value of our entire company, driving significant change throughout CEMEX-operationally, culturally, and strategically." -Juan Pablo San Agustín Executive Vice President of Strategic Planning and New Business Development...

  • Page 17
    ... with Investor Interests Employee stock-ownership plan To better align our executives' interests with those of our stockholders, we began offering executives a new stockownership program in 2005. The plan moves our company's Quarry rehabilitation efforts in the United kingdom < previous 16 next...

  • Page 18
    ... associated with changes in interest rates, the exchange rates of debt, or both; as an alternative source of financing; and as hedges of: (1) highly probable forecasted transactions and (2) CEMEX's net investments in foreign subsidiaries. Under Mexican Financial Reporting Standards, CEMEX recognizes...

  • Page 19
    ... 2011. The consolidation of the Ready Mix USA joint venture as of August resulted in higher ready-mix concrete and aggregates volumes. On a like-to-like basis for the ongoing operations, both ready-mix concrete and aggregates volumes declined 6% for the year. During the year, construction activity...

  • Page 20
    ... 2011. in France, our operations' ready-mix concrete and aggregates volumes increased 12% and 11%, respectively, for the year. sales volumes for the year were driven by the residential sector, which benefited from economic stimulus plan measures such as social housing, tax incentives, and zero-rate...

  • Page 21
    ..., Germany, Hungary, Ireland, Latvia, Lithuania, Norway, Poland, Sweden, and the United Kingdom 3 Includes operations in Croatia, Egypt, Israel, Spain, and the United Arab Emirates 4 Includes operations in Argentina, Colombia, Costa Rica, Dominican Republic, Guatemala, Nicaragua, Panama, Puerto Rico...

  • Page 22
    .... Our trading operations help us to optimize our worldwide production capacity, deliver excess cement to where it is most needed, and explore new markets without RUM Aquatic Complex in Mayagüez, Puerto Rico "Our commercial strategies will allow us not only to strengthen our market positions, but...

  • Page 23
    ... business lines in Mexico, Spain, and Costa Rica. This platform is implemented in other operations, including the United States, the United Kingdom, Germany, and France, among others. Cement, ready-mix concrete, and aggregates operations are now using one of the most advanced enterprise application...

  • Page 24
    ...'s Chief Financial Officer; Juan Pablo san Agustín, Executive Vice President for strategic Planning and Business development; and Luis hernández, Executive Vice President for Organization and human Resources. These nine executives report directly to CEMEX's Chairman and CEO, Lorenzo h. Zambrano...

  • Page 25
    ...million of senior secured notes On January 4, 2011, CEMEX issued Us$1,000 million aggregate principal amount of U.s. dollar-denominated senior secured notes (the "2018 Notes"). The 2018 Notes will mature in 2018, and will pay a coupon of 9.00% annually. The 2018 Notes were issued at a discount of 99...

  • Page 26
    ...CONsOLidATEd sTATEMENTs OF CAsh FLOWs 30> BALANCE shEETs 31> sTATEMENTs OF OPERATiONs 32> sTATEMENTs OF CAsh FLOWs 33> sTATEMENT OF ChANgEs iN sTOCkhOLdERs' EQUiTY 34> NOTEs TO ThE CONsOLidATEd FiNANCiAL sTATEMENTs Tianjin Express Road in China 123,000 cubic meters of ready-mix concrete < previous...

  • Page 27
    ...the parent company-only and consolidated financial statements referred to above present fairly, in all material respects, the financial position of CEMEX, S.A.B. de C.V. and CEMEX, s.A.B. de C.V. and subsidiaries as of december 31, 2011 and 2010, and the results of their operations, changes in their...

  • Page 28
    consolidated balance sheets CEMEX, S.A.B. DE C.v. AND SuBSIDIARIES (millions of mexican pesos) December 31, notes 2011 2010 assets CURRENT ASSETS Cash and investments Trade receivables less allowance for doubtful accounts Other accounts receivable inventories, net Other current assets Total ...

  • Page 29
    ... statements of operations CEMEX, S.A.B. DE C.v. AND SuBSIDIARIES (millions of mexican pesos, except for earnings (loss) per share) notes 2011 Years enDeD December 31, 2010 2009 Net sales Cost of sales Gross profit Administrative and selling expenses distribution expenses Total operating...

  • Page 30
    consolidated statements of cash flows CEMEX, S.A.B. DE C.v. AND SuBSIDIARIES (millions of mexican pesos) notes 2011 Years enDeD December 31, 2010 2009 OPERATING ACTIVITIES Consolidated net income (loss) discontinued operations Net income (loss) from continuing operations Non-cash items: ...

  • Page 31
    balance sheets CEMEX, S.A.B. DE C.v. (PARENT COMPANy-ONLy) (millions of mexican pesos, except for earnings (loss) per share) December 31, note 25 2011 2010 assets CURRENT AssETs Cash and investments Other accounts receivable Accounts receivable from related parties Total current assets NON - ...

  • Page 32
    statements of operations CEMEX, S.A.B. DE C.v. (PARENT COMPANy-ONLy) (millions of mexican pesos, except for earnings (loss) per share) note 25 2011 Years enDeD December 31, 2010 2009 Equity in income (loss) of subsidiaries and associates Rental income License fees Total revenues and interest in...

  • Page 33
    ... pesos) note 25 2011 Years enDeD December 31, 2010 2009 OPERATING ACTIVITIES Net income (loss) Non-cash items: Depreciation and amortization of assets Amortization of deferred charges Equity in income of subsidiaries and associates Comprehensive financing result income taxes Changes in working...

  • Page 34
    ... of common stock issuance and effects of convertible securities Effects of perpetual debentures Changes in non-controlling interest Balance at december 31, 2010 Currency translation of foreign subsidiaries Effects from available-for-sale investments Deferred income tax recognized directly in equity...

  • Page 35
    ... of the United Mexican States, or Mexico, is a holding company (parent) of entities whose main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX, S.A.B. de...

  • Page 36
    .... In 2011 and 2010, CEMEX restated the financial statements of its subsidiaries in Egypt, Nicaragua and Costa Rica; and in 2009, CEMEX restated the financial statements of its subsidiaries in Egypt, Nicaragua, Latvia and Costa Rica. The amounts in the statements of operations, the statements of cash...

  • Page 37
    ..., in any case, between the foreign exchange rates used by CEMEX and those exchange rates published by the Mexican Central Bank. E) CAsh ANd iNVEsTMENTs (note 4) The balance in this caption is comprised of available amounts of cash and cash equivalents, mainly represented by short-term investments of...

  • Page 38
    ... to the latest purchase price, the average price of the last purchases or the last production cost. CEMEX analyzes its inventory balances to determine if, as a result of internal events, such as physical damage, or external events, such as technological changes or market conditions, certain portions...

  • Page 39
    ... long-term accounts receivable. As a result, advances to suppliers of fixed assets for approximately $204 originally accounted for as property, plant and equipment in 2010, were reclassified to other long-term accounts receivable in the comparative balance sheet and related disclosures. I) BUSINESS...

  • Page 40
    ...prices of CEMEX's products, the development of operating expenses, local and international economic trends in the construction industry, the long-term growth expectations in the different markets, as well as the discount rates and the growth rates in perpetuity applied. CEMEX uses specific after-tax...

  • Page 41
    ...granted for the purchase of non-controlling interests and associates Represent agreements by means of which CEMEX commits to acquire, in case the counterparty exercises its right to sale in a future date at a predefined price formula, the shares of a non-controlling interest in a subsidiary of CEMEX...

  • Page 42
    ... employees' benefits for: a) defined benefit pension plans; b) other postretirement benefits, basically comprised of health care benefits, life insurance and seniority premiums, granted pursuant to applicable law or by Company grant; and c) termination benefits, not associated with a restructuring...

  • Page 43
    ...maturity date; and c) an unilateral option to defer interest payments or preferred dividends for indeterminate periods. P) REVENUE RECOGNITION CEMEX's consolidated net sales represent the value, before tax on sales, of revenues originated by products and services sold by consolidated subsidiaries as...

  • Page 44
    ... includes freight expenses of raw material in plants and delivery expenses of CEMEX's ready-mix concrete business, but excludes freight expenses of finished products between plants and points of sale and freight expenses between points of sales and the customers' facilities, which are included as...

  • Page 45
    ... Mexico, 2) United States, 3) Northern Europe, 4) Mediterranean, 5) South America and the Caribbean, and 6) Asia. Selected financial information by geographic operating segment for 2010 and 2009 has been reclassified as applicable in order to be comparable to the new organization in 2011. The major...

  • Page 46
    ...241) 2010 NET SALES OPERATING EBITDA LEss: DEPRECIATION OPERATING OTHER AND INCOME EXPENSES AMORTIZATION (LOss) , NET FINANCIAL EXPENsE Mexico $ 42,907 United states 31,575 Northern Europe United kingdom 14,320 germany 13,524 France 12,179 Rest of Northern Europe 1 11,677 Mediterranean spain...

  • Page 47
    ...) LESS: RELATED PARTIES NET SALES OPERATING EBITDA LEss: DEPRECIATION OPERATING OTHER AND INCOME EXPENSES AMORTIZATION (LOss) , NET FINANCIAL EXPENsE OTHER FINANCING iTEMs, NET 2009 Mexico $ 42,339 United states 38,472 Northern Europe United kingdom 16,126 germany 16,492 France 13,866 Rest of...

  • Page 48
    ...2010 iNVEsTMENTs IN ASSOCIATES Mexico United states Northern Europe United kingdom germany France Rest of Northern Europe 1 Mediterranean spain Egypt Rest of Mediterranean 2 south America and the Caribbean Colombia Rest of South America and the Caribbean 3 Asia Philippines Rest of Asia 4 Corporate...

  • Page 49
    ... financial statements Net sales by product and geographic segment for the years ended December 31, 2011, 2010 and 2009 were as follows: 2011 CEMENT CONCRETE AGGREGATES OTHERS ELIMINATIONS NET SALES Mexico $ United states Northern Europe United kingdom germany France Rest of Northern Europe...

  • Page 50
    ... financial statements Net sales by product and geographic segment - continued. 2009 CEMENT CONCRETE AGGREGATES OTHERS ELIMINATIONS NET SALES Mexico United states Northern Europe United kingdom germany France Rest of Northern Europe 1 Mediterranean spain Egypt Rest of Mediterranean 2 south America...

  • Page 51
    ... sold to financial institutions under securitization programs for the sale of trade accounts receivable, established in Mexico, the United States, Spain, France and the United Kingdom; the later forms part of the program in France and was initiated in 2011. Under these programs, CEMEX effectively...

  • Page 52
    ... to the consolidated financial statements Allowances for doubtful accounts are established according to the credit history and risk profile of each customer. Changes in the valuation allowance for doubtful accounts in 2011, 2010 and 2009, were as follows: 2011 2010 2009 Allowances for doubtful...

  • Page 53
    ...Múltiple 1 Société des Ciments Antillais Lehigh White Cement Company Ready Mix USA, LLC Other companies Cement Cement Cement Aggregates Aggregates Financing Cement Cement Concrete - Mexico Trinidad Mexico France France Mexico French Antilles United states United States - 49.0 20.0 10.3 33.3 50...

  • Page 54
    ... investments in associates. On February 22, 2010, Ready Mix USA, LLC sold 12 quarries located in Georgia, Tennessee and Virginia and certain other assets to SPO Partners & Co. for US$420. The assets were deemed non-strategic by CEMEX and Ready Mix USA. The proceeds from the sale were partly used...

  • Page 55
    ..., 2011. Under this settlement agreement, CEMEX received compensation for the expropriation of CEMEX Venezuela and administrative services provided after the expropriation in the form of: i) a cash payment of US$240; and ii) notes issued by Petróleos de Venezuela, S.A. ("PDVSA"), with nominal value...

  • Page 56
    ...plants, CEMEX adjusted the related fixed assets to their estimated realizable value and recognized impairment losses (note 2R) in 2011, 2010 and 2009 in the following countries and for the following amounts: 2011 2010 2009 ireland Mexico United kingdom Latvia Colombia Poland germany Thailand United...

  • Page 57
    ... in the statement of operations. Goodwill Goodwill balances by reporting unit as of December 31, 2011 and 2010, were as follows: 2011 2010 United states Mexico Northern Europe United kingdom France Rest of Northern Europe 1 Mediterranean spain United Arab Emirates Egypt south America and the...

  • Page 58
    ... in the development stage of internal-use software, such as professional fees, direct labor and related travel expenses, for $501 in 2011, $30 in 2010 and $161 in 2009. 11A) MAIN ACQUISITIONS AND DIVESTITURES DURING THE REPORTED PERIODS Acquisition of Ready Mix USA, LLC As a result of Ready Mix USA...

  • Page 59
    ...2011 and 2010, CEMEX's discount rates and growth rates in perpetuity used to determine the discounted cash flows in the reporting units with the main goodwill balances, were as follows: REPORTING UNITS DISCOUNT RATES 2011 2010 GROWTH RATES 2011 2010 United States Spain Mexico Colombia France United...

  • Page 60
    ...96,965 Bank loans Loans in Mexico, 2011 to 2014 $ Loans in foreign countries, 2011 to 2018 syndicated loans, 2011 to 2014 - 499 - 499 2,217 27,985 83,741 113,943 Notes payable Notes payable in Mexico, 2012 to 2017 Medium-term notes, 2012 to 2020 Other notes payable, 2012 to 2025 Total bank loans...

  • Page 61
    ...the Financing Agreement, in order to continue improving its debt maturities profile and avoid incremental interest costs. On April 5, 2011, CEMEX, S.A.B. de C.V. closed the offering of US$800 aggregate principal amount of Floating Rate Senior Secured Notes due in 2015 (the "April 2011 Notes"), which...

  • Page 62
    ...statements On March 4, 2011, a CEMEX subsidiary closed a private exchange transaction of approximately â,¬119 aggregate principal amount of its 6.277% Perpetual Debentures for approximately US$125 ($1,491) aggregate principal amount of new 9.25% U.S. Dollar-Denominated Senior Secured Notes due 2020...

  • Page 63
    ... case to the permitted negotiated amounts and other exceptions, CEMEX is limited in its ability to incur new debt, grant guarantees, engage in acquisitions and/or joint ventures, declare and pay cash dividends and make other cash distributions to stockholders. Furthermore, the Financing Agreement...

  • Page 64
    ... to the consolidated financial statements As of December 31, 2011 and 2010, taking into account the Financing Agreement and its amendment thereto, the modifications to the credit contracts and the waivers obtained, CEMEX, S.A.B. de C.V. and its subsidiaries were in compliance with the restrictive...

  • Page 65
    ... conversion rate as of December 31, 2011 was 79.5411 ADS per each 1 thousand dollars principal amount of such notes. iii. Mandatorily convertible securities due in 2019 In December 2009, CEMEX, S.A.B. de C.V. completed its offer to exchange CBs issued in Mexico with maturities between 2010 and 2012...

  • Page 66
    ...(Us$320) in 2011, $849 (Us$67) in 2010 and $2,160 (Us$141) in 2009. As of december 31, 2011 and 2010, pursuant to net balance settlement agreements, cash deposits in margin accounts that guaranteed obligations through derivative financial instruments were offset with the fair value of the derivative...

  • Page 67
    ... of US$189 and US$196, respectively, negotiated to exchange floating for fixed rates in connection with agreements entered into by CEMEX for the acquisition of electric energy in Mexico (note 19C). As of December 31, 2011 and 2010, the fair value of the swap represented assets of approximately US$52...

  • Page 68
    ...and former employees in April 2008, as described in note 19C. The fair value of such guarantee, net of deposits in margin accounts, represented liabilities of approximately US$4 ($56) in 2011 and US$95 ($1,174) in 2010. Changes in the fair value were recognized in the statements of operations within...

  • Page 69
    ...$9,578, respectively, of the non-current portion of taxes payable recognized beginning in 2009 as a result of changes to the tax consolidation regime in Mexico (note 15D). Approximately $693 in 2011 and $501 in 2010 are included within current taxes payable in its corresponding table. 2 3 4 As of...

  • Page 70
    ... periodically the amounts offered by the pension plan to the employee's individual accounts, not retaining any remaining liability as of the balance sheet date. Defined benefit pension plans As of December 31, 2011, except for the transitional amortization described in note 2M, the approximate...

  • Page 71
    ... to the consolidated financial statements As of December 31, 2011 and 2010, plan assets were measured at their estimated fair value at year end and consisted of: 2011 2010 Cash investments in corporate bonds investments in government bondss Total fixed-income securities investment in marketable...

  • Page 72
    ...benefits for Mexico were 7.0% in 2011 and 2010, for Puerto Rico and the United States were 4.7% in 2011 and 2010, and for the United Kingdom were 7.4% in 2011 and 2010. 15. Income taXes A) INCOME TAXES FOR THE PERIOD The amounts for income taxes included in the statements of operations in 2011, 2010...

  • Page 73
    ... breakdown of changes in consolidated deferred income taxes during 2011, 2010 and 2009 were as follows: 2011 2010 2009 deferred income tax charged to the statements of operations deferred income tax in stockholders' equity 2 Reclassification to other captions in the balance sheet Change in deferred...

  • Page 74
    ...2011 % 2010 % 2009 % Consolidated statutory tax rate Non-taxable dividend income Other non-taxable income 1 Expenses and other non-deductible items Non-taxable sale of marketable securities and fixed assets Difference between book and tax inflation Other tax non-accounting benefits Foreign exchange...

  • Page 75
    .... As a result, CEMEX reduced its estimated tax payable by approximately $2,911 against a credit to "Retained earnings." Changes in the Parent Company's tax payable associated with the tax consolidation in Mexico in 2011 and 2010 were as follows: 2011 2010 • • • Balance at the beginning of...

  • Page 76
    ... to the consolidated financial statements 16. stocKHolDers' eQuItY The balances of consolidated stockholders' equity exclude investments in shares of CEMEX, s.A.B. de C.V. held by subsidiaries of approximately $129 (17,334,881 CPOs) in 2011, $220 (16,668,156 CPOs) in 2010 and $187 (16,107,081 CPOs...

  • Page 77
    ... stock and/or additional paid-in capital. For the years ended December 31, 2011, 2010 and 2009, the translation effects of foreign subsidiaries included in the statement of changes in stockholders' equity were as follows: 2011 2010 2009 Foreign currency translation adjustment 1 Foreign exchange...

  • Page 78
    ... application of IFRS in Mexico. The different SPVs were established solely for purposes of issuing the perpetual debentures and were included in CEMEX's consolidated financial statements. As of december 31, 2011 and 2010, the detail of CEMEX's perpetual debentures, giving effect to the exchange...

  • Page 79
    ... financial statements 17. eXecutIVe stocK-baseD compensatIon CEMEX has a long-term compensation program providing for the grant of CEMEX's CPOs to a group of executives, pursuant to which, new CPOs are issued under each annual program over a 4 year period. By agreement with the executives...

  • Page 80
    ... for sale for an approximate period of 4 years from the exercise date. d) special program From June 2001 through June 2005, a CEMEX subsidiary in the United States granted to a group of its employees a stock option program to purchase CEMEX ADSs. The options granted have a fixed exercise price...

  • Page 81
    ... effect of the number of shares resulting from the executives' stock option programs is determined under the inverse treasury method. In connection with the restricted CPO grants under the long-term compensation program initiated in 2009, as well as the convertible securities, the total amount...

  • Page 82
    ...cement plants' electricity needs in Mexico during such year. This agreement is for CEMEX's own use and there is no intention of trading in energy by CEMEX. In 2007, CEMEX Ostzement GmbH ("COZ"), CEMEX's subsidiary in Germany, entered into a long-term energy supply contract with Vattenfall Europe New...

  • Page 83
    ... consolidated financial statements D) COMMITMENTS FROM EMPLOYEE BENEFITS In some countries, CEMEX has self-insured health care benefits plans for its active employees, which are managed on cost plus fee arrangements with major insurance companies or provided through health maintenance organizations...

  • Page 84
    ... a lawsuit in the District Court in Düsseldorf, Germany, against CEMEX Deutschland AG, CEMEX's subsidiary in germany, and other german cement companies originally seeking approximately â,¬102 (Us$132 or $1,843) in respect of damage claims by 28 entities relating to alleged price and quota fixing by...

  • Page 85
    ... 8, 2010, the European Commission ("EC") informed CEMEX that it has decided to initiate formal proceedings in respect of possible anticompetitive practices in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom, which include CEMEX...

  • Page 86
    ... consolidated financial statements • In October 2009, CEMEX Corp., one of CEMEX's subsidiaries in the United States, and other cement and concrete suppliers were named as defendants in several purported class action lawsuits alleging price fixing in Florida. The purported class action lawsuits...

  • Page 87
    ... FEC and Kendall Krome quarries, in the Lake Belt area in South Florida, which were granted in 2002 to CEMEX Construction Materials Florida, LLC ("CEMEX Florida"), one of CEMEX's subsidiaries in the United States. The judge ruled that there were deficiencies in the procedures and analysis undertaken...

  • Page 88
    ... financial statements • In August 2005, a lawsuit was filed against a subsidiary of CEMEX Colombia and other members of the Asociación Colombiana de Productores de Concreto, or ASOCRETO, a union formed by all the ready-mix concrete producers in Colombia. The lawsuit claimed that CEMEX...

  • Page 89
    ...companies in Mexico. In the ordinary course of business, CEMEX extends financing to Empresas ICA in connection with the purchase of CEMEX's products, on the same credit conditions that CEMEX awards to other customers. Mr. José Antonio Fernández Carbajal, a member of the board of directors of CEMEX...

  • Page 90
    ..., S.A. CEMEX Jamaica Neoris N.V. 1 2 3 4 5 Mexico spain United states Costa Rica Nicaragua Egypt Colombia Panama Dominican Republic Puerto Rico France Philippines Philippines Thailand Malaysia United kingdom germany Austria Croatia Czech Republic Poland Hungary ireland israel Latvia United Arab...

  • Page 91
    ... 2012. In preparing its opening IFRS balance sheet, based on IFRS 1, "First time adoption of IFRS" ("IFRS 1"), CEMEX has adjusted the amounts previously reported in financial statements prepared under MFRS. A description of how the transition from MFRS to IFRS has affected CEMEX's financial position...

  • Page 92
    ... United Arab Emirates, Croatia, guatemala, Panama, Dominican Republic, Costa Rica and Nicaragua that have already adopted IFRS prior to CEMEX, S.A.B. de C.V. at the same carrying amounts as in the IFRS financial statements of those subsidiaries after adjustments to homologate the group´s accounting...

  • Page 93
    ...permitted by IFRS 1, in its opening balance sheet under IFRS as of January 1, 2010, CEMEX applied the fair value as deemed cost exemption to mineral reserves, as well as certain buildings and major machinery and equipment located in several countries. The appraisal reports prepared on these items as...

  • Page 94
    ... retained earnings in the opening balance sheet, decreasing the balance of intangible assets and other deferred charges under IFRS as of January 1, 2010. h) Fair value of the Financing Agreement As described in note 12A, CEMEX entered into a Financing Agreement with its major creditors, by means of...

  • Page 95
    ... of the United Mexican States, or Mexico, is a holding company (parent) of entities whose main activities are oriented to the construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other construction materials. CEMEX, S.A.B. de...

  • Page 96
    ... of December 31, 2011 and 2010, the line item "Cash and investments" of the Parent Company in the balance sheet for $4,103 and $195, respectively refer to the CBs reserve (note 12A); and In 2009, the effects of the exchange of CBs for mandatorily convertible securities (note 12B), which represented...

  • Page 97
    ... financing costs associated with the extinguished debt were recognized immediately in the statement of operations. Goodwill of the Parent Company refers to a portion of the reporting unit in Mexico (note 11). During the last quarter of 2011, 2010 and 2009, the Parent Company performed its annual...

  • Page 98
    ... US$788, were used to repay indebtedness under the Financing Agreement. On January 11, 2011, the Parent Company closed the offering of US$1 billion aggregate principal amount of its 9.0% senior secured notes due in 2018 (the "January 2011 Notes"), which were issued at 99.364% of face value, and are...

  • Page 99
    ... the conversion rate as of December 31, 2011 was 79.5411 ADS per 1 thousand principal amount of such notes. iii. Mandatory convertible securities due 2019 In December 2009, the Parent Company completed its offer to exchange CBs issued in Mexico with maturities between 2010 and 2012, into mandatorily...

  • Page 100
    ... payable to CEMEX International Finance Co. bears interest at market rates and matures in 2028. The loss on financial instruments during 2009 mainly refers to results incurred in hedging transactions with related parties using foreign currency options. As of December 31, 2010, the Parent Company...

  • Page 101
    ... As a result, the Parent Company reduced its estimated tax payable by approximately $2,911 against a credit to "Retained earnings." Changes in the Parent Company's tax payable associated with the tax consolidation in Mexico in 2011 and 2010 were as follows: 2011 2010 Balance at the beginning of the...

  • Page 102
    ... to the parent company-only financial statements As of December 31, 2011, the estimated payment schedule of taxes payable resulting from changes in the tax consolidation regime in Mexico was as follows: 2011 2012 2013 2014 2015 2016 2017 and thereafter $ $ 693 693 1,998 2,111 1,773 5,142 12...

  • Page 103
    ... the financial reporting and the corresponding tax basis of assets and liabilities, give rise to permanent differences between the approximate statutory tax rate and the effective tax rate presented in the Parent Company's statements of operations. As of december 31, 2011, 2010 and 2009, these...

  • Page 104
    ... on January 1, 2005, Mexican companies with investments in entities incorporated outside of Mexico whose income tax liability is less than 75% of the income tax that would be payable in Mexico, are required to pay taxes in Mexico on net passive income, such as dividends, royalties, interest, capital...

  • Page 105
    .... Under IFRS, investments in subsidiaries and associates in the separate financial statements of the holding companies are recognized at cost or fair value at the reporting date. After transition to IFRS, the Parent Company elected to recognize such investments at cost. For 2011 and 2010, equity in...

  • Page 106
    ...represents 10 CPOs. The CEMEX Adss are listed on the New York stock Exchange. Euribor (Euro interbank Offered Rate) is the rate at which interbank term deposits in euros are being offered within the euro zone between prime banks. Free cash flow CEMEX defines it as operating EBITDA minus net interest...

  • Page 107
    ... a member of the board) auDIt commIttee Roberto Zambrano Villarreal President José Manuel Rincón gallardo Alfonso Romo garza Rafael Rangel sostmann corporate practIces commIttee dionisio garza Medina President Bernardo Quintana isaac José Antonio Fernández Carbajal Rafael Rangel sostmann fInance...

  • Page 108
    ..., Joaquín Estrada has held several executive positions, including head of operations in Egypt and spain, as well as head of Trading for Europe, the Middle East, and Asia. he is currently President of CEMEX Asia, and is also responsible for the company's global Trading area. Joaquín graduated with...

  • Page 109
    ... years in the building materials industry. since then he has held several senior positions in the company's operations in Florida and the Eastern region of the United states. Before joining CEMEX he headed the ready-mix concrete and concrete products divisions of Rinker in the UsA and Australia. he...

  • Page 110
    ... contact [email protected] From the Us: 1 877 7CX NYsE From other countries : (212) 317-6000 Fax : (212) 317-6047 Web address www.cemex.com headquarters Av. Ricardo Margáin Zozaya 325 66265 san Pedro garza garcía, N.L. México Phone : (52-81) 8888-8888 Fax : (52-81) 8888-4417 Mexico City office...

  • Page 111
    ...the SEC and the BMV and/or CNBV. This annual report also includes statistical data regarding the production, distribution, marketing and sale of cement, ready-mix concrete, clinker and aggregates. We generated some of this data internally, and some was obtained from independent industry publications...