Cemex 2012 Annual Report Download - page 69

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Notes to the
consolidated
financial
statements
69
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CEMEX has significant balances of property, machinery and equipment. As of December 31, 2012 and 2011, the consolidated
balances of property, machinery and equipment, net, represented approximately 44.3% and 43.1%, respectively, of CEMEX’s total
consolidated assets. As a result of impairment tests conducted on several CGUs considering certain triggering events, mainly: a)
the closing and/or reduction of operations of cement and ready-mix concrete plants resulting from adjusting the supply to current
demand conditions; and b) the transferring of installed capacity to more ecient plants, for the years ended December 31, 2012,
2011 and 2010, CEMEX adjusted the related fixed assets to their estimated value in use in those circumstances in which the
assets would continue in operation based on estimated cash flows during the remaining useful life, or to their realizable value,
in case of permanent shut down, and recognized impairment losses (note 2K) during 2012, 2011 and 2010 in the following
countries and for the following amounts:
2012 2011 2010
Ireland $ 64 790 91
Mexico 203 101 138
United Kingdom – 84 –
Latvia 38 68 –
Colombia – 46 –
Poland 3 29 76
Germany 128 21 103
Thailand – 15 136
United States 71 11 500
Other countries 35 84 117
$ 542 1,249 1,161
As of December 31, 2012, there were no items of property, machinery and equipment related to CGUs that due to impairment
indicators, such as the reduction of operations and/or the extended economic slowdown in the respective country, were subject to
impairment tests and presented relative impairment risk in that their value in use exceeded by only 10% or less their respective
carrying amounts. As of December 31, 2011, the CGU that presented relative impairment risk was as follows:
2011
Excess of value in use Average remaining
Country Related assets over carrying amount Discount rate useful life
United States Machinery and equipment $ 105 10.7% 21 years
As of December 31, 2011, in connection with the items of property, machinery and equipment mentioned in the table above that
presented relative impairment risk, the impairment charges resulting from the sensitivity analysis that would have resulted from
a reasonable independent change in each of the relevant variables used to determine the related assets’ value in use would have
been as follows:
2011
Sensitivity analysis impact of described change in assumptions
Excess of value in use Recognized Remaining useful
Country over carrying amount impairment losses Discount rate + 1pt live – 10%
United States $ 105 – (105) –
As of December 31, 2011, CEMEX believed that the estimated useful lives of the assets subject to the impairment test above
were reasonable. With respect to the discount rate, such rate is linked to the global cost of capital, which may increase in the
future, subject to economic conditions in the respective country.