Cemex 2013 Annual Report Download - page 26

1. Cost of sales includes depreciation, amortization and depletion
of assets involved in production, and expenses related to storage in
producing plants, as well as, beginning in 2008, freight expenses of
raw material in plants and delivery expenses of CEMEX’s ready-mix
concrete business.
2. For the periods ending December 31, 2002 through 2007, the
expenses related to the distribution of the company’s products were
classified as selling expenses on the income statement. In 2001, such
expenses were recognized partially as part of cost of sales.
3. Other financial (expense) income, net, includes financial income,
realized and unrealized gains and losses from financial instruments,
foreign exchange results and the effects of net present value on
assets and liabilities.
4. In October 2009, we completed the sale of our Australian opera-
tions for approximately A$2,020 million (approx. US$1,700 million).
The consolidated income statements present the results of opera-
tions of the Australian assets, net of income tax, for the years 2007,
2008, and 2009 in a single line item as “Discontinued Operations”.
5. In 2000, a Dutch subsidiary of CEMEX issued preferred stock
for US$1.5 billion in connection with the financing required for the
CEMEX, Inc. (formerly Southdown) acquisition. After redemptions
of preferred stock made during the life of this transaction, the out-
standing amount of preferred stock included as minority interest as
of December 31, 2001 and 2002, was US$900 million and US$650
million, respectively. In October 2003, CEMEX early redeemed the
total outstanding amount of the preferred stock.
6. In 1998, a subsidiary of CEMEX in Spain issued US$250 million
of capital securities. In April 2002, through a tender offer, US$184
million of capital securities were redeemed. The balance outstanding
as of December 31, 2002 and 2003, was US$66 million and was
liquidated during 2004. This transaction was recorded as minority
interest during its tenure.
7. As of December 31, 2006, 2007, 2008, 2009, 2010, 2011,
2012 and 2013, non-controlling interest includes US$1,250 million,
US$3,065 million, US$3,020 million, US$3,045 million, US$1,320
million, US$938 million, US$473 million and US$477 million, respec-
tively, of aggregate notional amounts of perpetual debentures issued
by consolidated entities. For accounting purposes, these debentures
represent equity instruments (see note 20D to the 2013 Annual
Report’s Financial Statements).
8. The number of ADSs outstanding represents the total ADS equivalent
units outstanding at the close of each year, stated in millions of ADSs,
and includes the total number of ADS equivalents issued by CEMEX in
underlying derivative transactions, and excludes the total number of
ADS equivalents issued by CEMEX and owned by subsidiaries. Each ADS
listed on the New York Stock Exchange represents 10 CPOs.
9. Our shareholders approved stock splits in 2005 and 2006. As
a result, each of our existing CPOs was surrendered in exchange
for two new CPOs. The proportional equity interest participation
of the stockholders in CEMEX’s common stock did not change as
a result of the stock splits mentioned above. The number of our
ADSs outstanding did not change as a result of the stock splits in
the year 2005. Instead, the ratio of CPOs to ADSs was modified
so that each ADS represented 10 new CPOs. As a result of the
stock split approved during 2006, one additional ADS was issued
in exchange for each existing ADS, each ADS representing 10 new
CPOs. Earnings per ADS and the number of ADSs outstanding for
the years ending December 31, 2001 through 2005, have been
adjusted to make the effect of the stock splits retroactive for the
correspondent years. In the Financial Statements, these figures are
presented on a per-share basis (see note 22 to the 2013 Annual
Report’s Financial Statements).
10. For purposes of the selected financial information for the
periods ended December 31, 2003 through 2013, the earnings
(losses)-per-ADS amounts were determined by considering the
year end balance number of ADS equivalent units outstanding
during each year, i.e., 630.4, 665.8, 691.9, 718.4, 743.2, 838.1,
896.8, 1,104, 1,108.5, 1,117 million and 1,170 million, respec-
tively. These numbers of ADSs outstanding were not restated
retroactively to give effect to stock dividends occurring during
the period, as it would be required under MFRS and IFRS for their
disclosure in the financial statements.
11. Dividends declared at each year’s annual stockholders’ meeting
for each period are reflected as dividends for the preceding year.
We did not declare a dividend for the years 2008, 2009, 2010,
2011 and 2012. Instead, at our 2009, 2010, 2011, 2012 and
2013 annual shareholders’ meetings, CEMEX’s stockholders
approved a capitalization of retained earnings. New CPOs issued
pursuant to the capitalization were allocated to shareholders on a
pro-rata basis. As a result, shares equivalent to approximately 335
million CPOs, 384 million CPOs, 401 million CPOs, 419 million
CPOs and 437 million CPOs were issued and paid during 2009,
2010, 2011, 2012 and 2013, respectively. CPO holders received
one new CPO for each 25 CPOs held, and ADS holders received
one new ADS for each 25 ADSs held. There was no cash distribu-
tion and no entitlement to fractional shares. (See note 20A to the
2013 Annual Report’s Financial Statements).
12. Please refer to page 165 for the definition of terms.
13. In 2010, 2011, 2012 and 2013, other financial obligations
include the liability components associated with CEMEX’s financial
instruments convertible into CEMEX’s CPOs, liablities secured with
accounts receivable, as well as CEMEX’s capital leases (see note 16B
to the 2013 Annual Report’s Financial Statements). Prior to 2010,
there were no significant transactions concerning capital leases or
convertible financial instruments.
14. Beginning in 2005, free cash flow is calculated after maintenance
capital expenditures only.
(A) In November 2008, the CNBV issued regulations requiring reg-
istrants whose shares are listed on the MSE to begin preparing their
consolidated financial statements using International Financial Re-
porting Standards (“IFRS”), as issued by the International Accounting
Standards Board (“IASB”), no later than January 1, 2012 and to stop
using Mexican Financial Reporting Standards (“MFRS”). In connection
with this requirement, CEMEX’s consolidated financial statements as
of December 31, 2013, 2012 and 2011 and for the years ended
December 31, 2013, 2012, 2011 and 2010, were prepared in
accordance with IFRS as issued by the IASB.
(B) As a consequence of the IFRS migration, as described in the para-
graph (A) above, certain accounting differences were raised from the
adoption as compared with MFRS. The most significant differences
within the financial statements were: 1) Derecognition of financial
assets and liabilities due to securitization programs; 2) Application of
accounting guidelines in financial instruments; 3) Certain reclas-
sification between line items in order to comply with presentation
requirements; 4) Effects on property, machinery and equipment,
mostly related to the fair value application on IFRS 1 and the hyper-
inflationary economies threshold change; 5) Application of IFRS 1
exemption on pensions and other post retirement benefits; 6) Effects
of all differences on the balance sheet that impacted the deferred
income taxes; 7) Change in the recognition method of the uncertain
tax positions; 8) In 2011, Ready Mix USA, LLC, was consolidated in
March 31, 2011, thus four additional months within the statement
of operation in comparison to MFRS.
(C) CEMEX’s consolidated balance sheets as of December 31, 2012
and 2011 and its consolidated statements of operations for the years
ended December 31, 2012 and 2011 reflect the adoption of the
amendments to IAS 19 and IFRIC 20 beginning on January 1, 2013.
The effects were not significant. (See note 2 to the 2013 Annual
Report’s Financial Statements).
Notes to selected consolidated financial information
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