Cemex 1997 Annual Report Download - page 76

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70
Based on the above, and on the fact that the assessments do not fulfill all legal requirements and do not comply
with substantive and procedural requirements of the tax laws, the Company believes that such claims will be
nullified once the legal proceedings before the courts are concluded.
C) ANTI-DUMPING DUTIES
In 1990, the United States Department of Commerce (DOC) imposed an anti-dumping duty order on imports of
clinker from Mexico. As a result, certain subsidiaries of the Company, as importers of record, have been subject to
the payment of estimated anti-dumping duty deposits on imports of gray portland cement and clinker from Mexico
since April 1990. The order is likely to continue for an indefinite period, although under the new World Trade
Organization rules, it will be reviewed by the U.S. government not later than July 2001 to determine whether the
conditions for imposing the order still exist. The Company has defended itself and its subsidiaries in this matter
and will continue to do so through the available means in order to determine the actual dumping margins within
each period of the administration reviews carried out by the DOC.
As of December 31, 1997, the Company has accrued a liability of US dollars 51 million, including accrued interest,
for the difference between the amount of the anti-dumping duties paid on imports and the latest findings by the
DOC in its administrative reviews for all of the review periods, except for one review period, for which the Company
believes the DOC determination will not ultimately serve as the basis for anti-dumping duty assessments.
As of December 31, 1997, except for the first and third administrative review periods, there has been no final
determination of anti-dumping margin for any of the review periods and final results could vary from the amounts
recorded in the consolidated financial statements.
D) LEASES
The Company has entered into various noncancellable operating leases, primarily for the lease of operating
facilities, cement storage and distribution facilities and certain transportation and other equipment, which require
annual rental payments plus the payment of certain operating expenses of certain of the facilities. Future minimum
annual rentals due under such leases are summarized as follows:
Thousands of
Year ending December 31, U.S. dollars
1998 24,841
1999 23,010
2000 20,873
2001 19,282
2002 15,405
2003 and thereafter 115,955
219,366
Rental expense for the years ended December 31, 1997 and 1996, was US dollars 22 and 23 million, respectively.
E) PLEDGED ASSETS
At December 31, 1997, there are liabilities amounting to US dollars 43 million secured by property, plant and
equipment.