Cemex 2009 Annual Report Download - page 56

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54
CEMEX’s consolidated income statements for the years ended December 31, 2008 and 2007 include the results of CEMEX Venezuela for the seven-month
period ended July 31, 2008 and for the year ended December 31, 2007, respectively. For balance sheet purposes, as of December 31, 2009 and 2008, the
investment of CEMEX in Venezuela was presented within “Other investments and non current accounts receivable” (note 10B). As of December 31, 2009
and 2008, the net book value of CEMEX’s investment in Venezuela was approximately $6,147 and $6,877, respectively, corresponding to CEMEX’s equity
interest of approximately 75.7%.
Based on MFRS, significant disposals should be treated as discontinued operations in the income statement for all the periods presented. For the years ended
December 31, 2008 and 2007, including the recognition of Australia as a discontinued operation, CEMEX measured the materiality of CEMEX Venezuela
during each period presented, considering a threshold of 5% of consolidated net sales, operating income, net income and total assets. Considering the
results of the quantitative tests, CEMEX concluded that the nationalized Venezuelan operations did not reach the materiality thresholds to be classified
as discontinued operations. The results of CEMEX’s quantitative tests for the seven-month period ended July 31, 2008 (unaudited) and for the year ended
December 31, 2007 were as follows:
July 31, 2008 2007
Net sales 3.2% 3.0%
CEMEX consolidated from continuing operations $ 134,836 228,152
CEMEX Venezuela 4,286 6,823
Operating income 4.8% 4.3%
CEMEX consolidated from continuing operations $ 16,003 31,610
CEMEX Venezuela 2 775 1,358
Net income 0.1% 3.2%
CEMEX consolidated from continuing operations $ 10,557 26,657
CEMEX Venezuela 11 852
Total assets 2.1% 2.1%
CEMEX consolidated $ 525,756 542,314
CEMEX Venezuela 11,010 11,515
In addition, as of December 31, 2007, CEMEX Venezuela was the holding entity of several of CEMEX’s investments in the region, including the operations
in the Dominican Republic and Panama, as well as CEMEX’s non-controlling investment in Trinidad. Before the nationalization of its assets in Venezuela, in
April 2008, CEMEX concluded the transfer of all material non-Venezuelan investments to CEMEX España, S.A. for approximately US$355 plus US$122 of
net debt, having distributed all accrued profits from the non-Venezuelan investments to the stockholders of CEMEX Venezuela amounting to approximately
US$132.
As of July 31, 2008 (unaudited), the condensed balance sheet of CEMEX’s operations in Venezuela was as follows:
July 31, 2008
Current assets $ 2,532
Non-current assets 8,478
Total assets 11,010
Current liabilities 2,753
Non-current liabilities 1,384
Total liabilities 4,137
Total net assets 6,873
Non-controlling interest (1,507)
CEMEX’s interest in total net assets 1 $ 5,366
The following table presents condensed selected income statement information for CEMEX’s operations in Venezuela for the seven-month period ended
July 31, 2008 (unaudited) and for the year ended December 31, 2007:
July 31, 2008 2007
Sales $ 4,286 6,823
Operating income 2 775 1,358
Net income $ 11 852
1 Changes in the net investment between July 31, 2008 and December 31, 2009 and 2008 are attributable to foreign currency fluctuations.
2 Operating income in these tables excludes the margin realized in related-party transactions; therefore, it is not directly comparable to selected financial information from
the “Venezuela” segment presented in note 4A.