Cemex 2009 Annual Report Download - page 53

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In March 2008, CEMEX announced the sale, through a subsidiary, of 119 million of CPOs of AXTEL, S.A.B. de C.V. (“AXTEL”), which represented 9.5%
of the equity capital of AXTEL for approximately $2,738, recognizing a net gain of approximately $1,463 in 2008 within “Other expenses, net.” The sale
represented approximately 90% of CEMEX’s position in AXTEL, which had been part of the Company’s investments in associates.
In June 2009, CEMEX sold its 49% interest in an aggregates joint venture in Wyoming to Martin Marietta Materials, Inc., as well as three quarries
located in Nebraska, Wyoming and Utah in the United States for approximately US$65 and recognized a loss related to the sale of these assets of
approximately US$64.
10B) Other investments and non-current accounts receivable
As of December 31, 2009 and 2008, other investments and non-current accounts receivable are summarized as follows:
2009 2008
Non-current portion of valuation of derivative financial instruments $ 6,512 8,002
Non-current accounts receivable and other assets 13,987 15,314
Investments in private funds 532 493
$ 21,031 23,809
In 2009 and 2008, “Non-current accounts receivable and other assets” include approximately $6,147 and $6,877, respectively, corresponding to CEMEX’s
net investment in its expropriated assets in Venezuela (note 12A), $156 in 2009 and $98 in 2008 of the remaining portion of CPOs of AXTEL, as well as $916
in 2009 of an investment restricted for acquisitions in cement, concrete and/or aggregates businesses, and $1,011 in 2009 resulting from the settlement of
derivative instruments associated with the perpetual debentures, which will be used to pay coupons under such instruments (notes 13C and 17D).
In 2009, 2008 and 2007, proceeds were contributed to private funds for US$5 ($65), US$1 ($14) and US$4 ($44), respectively.
11. PROPERTY, MACHINERY AND EQUIPMENT
As of December 31, 2009 and 2008, consolidated property, machinery and equipment consisted of:
2009 2008
Land and mineral reserves $ 83,568 82,299
Buildings 65,285 67,029
Machinery and equipment 253,797 260,538
Construction in progress 18,433 17,663
Accumulated depreciation and depletion (162,220) (157,248)
$ 258,863 270,281
Changes in property, machinery and equipment in 2009, 2008 and 2007, excluding the discontinued operations in Australia (note 4B), were as follows:
2009 2008 2007
Cost of property, machinery and equipment at beginning of period $ 427,529 403,967 340,265
Accumulated depreciation and depletion at beginning of period (157,248) (153,953) (138,840)
Net book value at beginning of period 270,281 250,014 201,425
Capital expenditures 8,307 22,554 21,885
Capitalization of comprehensive financing result 347 609 68
Total additions 8,654 23,163 21,953
Disposals 1 (4,040) (5,084) (509)
Reclassifications 2 3,603 (11,656) –
Contribution and sale to associates 3 – (4,588) –
Additions through business combinations 733 98 41,821
Depreciation and depletion for the period (15,963) (15,611) (14,522)
Impairment losses (503) (1,045) (64)
Foreign currency translation and inflation effects 4 (3,902) 34,990 (90)
Cost of property, machinery and equipment at end of period 421,083 427,529 403,967
Accumulated depreciation and depletion at end of period (162,220) (157,248) (153,953)
Net book value at end of period $ 258,863 270,281 250,014
1 In 2008, includes approximately $4,200 of the carrying amount of fixed assets sold in Italy and Spain (note 12A).
2 In 2008, includes the reclassification to “Other non-current assets” for the expropriation of assets in Venezuela for $8,053 and the reclassification of fixed assets of Austria
and Hungary as assets held for sale to the item of “Other non-current accounts receivable” for $3,603 (note 12A).
3 Refers to the contribution and sale of assets to Ready Mix USA, LLC detailed in note 10A.
4 The effects presented in this caption refer to fluctuations in exchange rates for the period between the functional currency of the reporting unit and the peso, and, until
December 31, 2007, to the restatement adjustment to constant pesos.
During 2009, in connection with impairment tests conducted considering certain triggering events, such as the closing of ready-mix plants resulting from
adjusting the supply to current demand conditions and the transferring of installed capacity to more efficient plants, among other factors, impairment losses
in machinery and equipment were recognized in Puerto Rico for $282, the United States for $154 and other countries for $67. In 2008, considering the same
factors, impairment losses were recognized in the United States for $511, Poland for $322 and other countries for $212. In 2007, impairment losses were
mainly attributable to idle assets in the United Kingdom, Mexico and Philippines. The related assets were adjusted to their estimated realizable value.