Cemex 1999 Annual Report Download - page 58

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Certain condensed financial information of the balance sheets and income statements of the acquired companies
during 1999, for the periods mentioned above, are presented below:
a) ASSIUT c) CEMPASA e) APO
Total assets $ 4,071,075 636,775 3,583,730
Total liabilities 2,712,115 254,312 1,180,891
Stockholders’ equity 1,358,960 382,463 2,402,839
Net sales $ 137,686 91,195 617,044
Operating income 15,392 20,099 111,070
Net (loss) income (7,200) (17,728) 73,217
8.- PROPERTY, MACHINERY AND EQUIPMENT
During 1999, through the analysis of the economic and market conditions prevailing in the countries where the
Company operates, the marketing plans, as well as the future production needs, the Company decided to fully stop
operations in 4 operating cement assets located in Mexico and Colombia, as well as the partial closing of other 4
operating cement assets located in the same countries, this in order to avoid a production overload. Based on this
analysis, the Company estimated that the expected future cash flows to be generated by such assets would not be
sufficient to recover their book value.
As a result of the above and according to the guidelines established in Bulletin C-6 “Property, Machinery and
Equipment”, during 1999, the Company determined an impairment provision of approximately US dollars 63.1 million
($600.1 million), which is reflected in the consolidated income statement under the caption Other Expenses, net. As
of December 31, 1999, the assets subject to impairment described above are valued at their estimated realizable value,
net from the expenses estimated for their disposal and, their depreciation has been suspended. The remaining book
value of these assets is approximately $313 million and it is the Company’s intention to dispose of those that were
completely closed. The impact of having suspended depreciation of these assets on the 1999 results was
approximately $30.2 million.
The Company continues with the assesment process of its subsidiaries’ fixed assets, therefore, the possibility of future
provisions for impairment of assets exists, additional to those recognized in 1999.
In 1998, the Company sold a cement plant of its Spanish subsidiary and its related assets for approximately US dollars
260 million ($2,577 million), resulting in a gain in the consolidated income statement of approximately $325.5
million. The sale included the ready-mix concrete, mortar and aggregates operations related to that plant.
9.- DEFERRED CHARGES
Deferred charges are summarized as follows:
1999 1998
CONSOLIDATED PARENT CONSOLIDATED PARENT
Excess of cost over book value
of subsidiaries and affiliated
companies acquired $ 24,341,809 3,670,942 23,032,628 1,832,167
Terminal installation costs and
other intangibles 59,125 — 45,890 —
Deferred financing costs 532,666 365,448 415,753 383,375
Others 3,434,052 1,274,666 2,936,326 1,111,560
Accumulated amortization (5,096,870) (1,025,781) (4,230,191) (1,090,319)
$ 23,270,782 4,285,275 22,200,406 2,236,783
As of December 31, 1999, as a result of the acquisitions made by the Company during 1999 (see note 7), goodwill
increased approximately US dollars 249 million ($2,368 million), in relation to the prior year.
10.- SHORT-TERM BANK LOANS AND NOTES PAYABLE
Short-term debt is summarized by currency as of December 31, 1999 and 1998, as follows:
CONSOLIDATED
1999 RATE 1998 RATE
US Dollars $ 7,823,221 5.4% - 10.8% 10,238,479 5.8% - 10.0%
Euros 882,465 3.5% - 4.1% — —
Egyptian Pounds 674,049 10.5% — —
Philippine Pesos 226,710 13.0% - 15.7% 196,334 16.8%
Spanish Pesetas 183,782 3.8% 381,717 3.9% - 5.8%
Colombian Pesos 5,438 19.8% 143,845 19.8%
$ 9,795,665 10,960,375
A total of 98% of the short-term debt of the Parent Company is denominated in US dollars in 1999 and 1998.