Cemex 2009 Annual Report Download - page 47

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45
4. SELECTED FINANCIAL INFORMATION BY GEOGRAPHIC OPERATING SEGMENT AND DISCONTINUED OPERATIONS
4A) Geographic operating segments
Operating segments are defined as the components of an entity oriented to the production and sale of goods and services, which are subject to risks and
benefits different from those associated with other business segments. CEMEX operates principally in the construction industry segment through the
production, distribution, marketing and sale of cement, ready-mix concrete and aggregates.
CEMEX operates geographically on a regional basis. Each regional manager supervises and is responsible for all the business activities in the countries
comprising the region. These activities refer to the production, distribution, marketing and sale of cement, ready-mix concrete and aggregates. The country
manager, who is one level below the regional manager in the organizational structure, reports his business unit operating results, including all the operating
sectors, to the regional manager. CEMEX’s management internally evaluates the results and performance of each country and region for decision-making
purposes, following a vertical integration approach. According to this approach, in the daily operations, management allocates economic resources on a
country basis rather than on an operating component basis.
The main indicator used by CEMEX’s management to evaluate the performance of each country is operating EBITDA, which CEMEX defines as operating
income plus depreciation and amortization. This indicator, which is presented in the selected financial information by geographic operating segment, is
consistent with the information used by CEMEX’s management for decision-making purposes. The accounting policies applied to determine the financial
information by geographic operating segment are consistent with those described in note 3. CEMEX recognizes sales and other transactions between
related parties based on market values.
Selected income statement information by geographic operating segment for the years ended December 31, 2008 and 2007 has been modified as a result
of the presentation of discontinued operations. Information for the years ended December 31, 2009, 2008 and 2007 was as follows:
Net sales Operating Operating
(including Related Consolidated income depreciation Operating
2009 related parties) parties net sales (loss) and amortization EBITDA
North America
Mexico $ 42,339 (730) 41,609 13,965 1,878 15,843
United States 38,472 – 38,472 (6,731) 8,505 1,774
Europe 2
Spain 11,308 (127) 11,181 1,836 911 2,747
United Kingdom 16,126 – 16,126 (481) 1,001 520
Rest of Europe 46,532 (1,454) 45,078 2,827 2,388 5,215
Central and South America and the Caribbean 3
Colombia 6,766 (2) 6,764 2,662 406 3,068
Rest of Central and South America and the Caribbean 14,031 (1,710) 12,321 3,002 1,129 4,131
Africa and Middle East 4
Egypt 8,371 – 8,371 3,335 311 3,646
Rest of Africa and Middle East 6,425 – 6,425 715 322 1,037
Asia 5
Philippines 3,867 (287) 3,580 1,180 327 1,507
Rest of Asia 2,566 – 2,566 81 148 229
Others 6 8,334 (3,026) 5,308 (6,551) 2,987 (3,564)
Total $ 205,137 (7,336) 197,801 15,840 20,313 36,153