Cemex 2013 Annual Report Download - page 64
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Please find page 64 of the 2013 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to the consolidated financial statements
4) Selected nancial information by geographic operating segment
CEMEXappliesIFRS8,
OperatingSegments
(“IFRS8”),forthedisclosureofitsoperatingsegments,whicharedenedasthecomponents
ofanentitythatengageinbusinessactivitiesfromwhichtheymayearnrevenuesandincurexpenses,whoseoperatingresultsareregularly
reviewedbytheentity’stopmanagementtomakedecisionsaboutresourcestobeallocatedtothesegmentsandassesstheirperformance,
andforwhichdiscretenancialinformationisavailable.
CEMEX’s main activities are oriented to the construction industry segment through the production, distribution, marketing and sale of
cement,ready-mixconcrete,aggregatesandotherconstructionmaterials.CEMEXoperatesgeographicallyonaregionalbasis.Beginningin
April2011,CEMEX’soperationswerereorganizedintosixgeographicalregions,eachunderthesupervisionofaregionalpresident:1)Mexico,
2)UnitedStates,3)NorthernEurope,4)Mediterranean,5)SouthAmericaandtheCaribbean(“SAC”),and6)Asia.Eachregionalpresident
supervisesandisresponsibleforallthebusinessactivitiesinthecountriescomprisingtheregion.Theseactivitiesrefertotheproduction,
distribution,marketingandsaleofcement,ready-mixconcrete,aggregatesandotherconstructionmaterials,theallocationofresources
andthereviewoftheirperformanceandoperatingresults.AllregionalpresidentsreportdirectlytoCEMEX’sChiefExecutiveOfcer.The
countrymanager,whoisonelevelbelowtheregionalpresidentintheorganizationalstructure,reportstheperformanceandoperatingresults
ofitscountrytotheregionalpresident,includingalltheoperatingsectors.CEMEX’stopmanagementinternallyevaluatestheresultsand
performanceofeachcountryandregionfordecision-makingpurposesandallocationofresources,followingaverticalintegrationapproach
considering: a) that the operating components that comprise the reported segment have similar economic characteristics; b) that the
reportedsegmentsareusedbyCEMEXtoorganizeandevaluateitsactivitiesinitsinternalinformationsystem;c)thehomogeneousnature
oftheitemsproducedandtradedineachoperativecomponent,whichareallusedbytheconstructionindustry;d)theverticalintegrationin
thevaluechainoftheproductscomprisingeachcomponent;e)thetypeofclients,whicharesubstantiallysimilarinallcomponents;f)the
operativeintegrationamongcomponents;andg)thatthecompensationsystemofaspeciccountryisbasedontheconsolidatedresultsof
thegeographicsegmentandnotontheparticularresultsofthecomponents.Inaccordancewiththisapproach,inCEMEX’sdailyoperations,
managementallocateseconomicresourcesandevaluatesoperatingresultsonacountrybasisratherthanonanoperatingcomponentbasis.
BasedonIFRS8andconsideringthenancialinformationthatisregularlyreviewedbyCEMEX’stopmanagement,eachofthesixgeographic
regions inwhichCEMEXoperatesand thecountriesthatcomprisesuchregionsrepresentreportableoperating segments.However,for
disclosurepurposesinthenotestothenancialstatements,consideringsimilarregionalandeconomiccharacteristicsand/orthefactthat
certaincountriesdonotexceedthematerialitythresholdsincludedinIFRS8tobereportedseparately,suchcountrieshavebeenaggregated
andpresentedassinglelineitemsasfollows:a)“RestofNorthernEurope”ismainlycomprisedofCEMEX’soperationsinIreland,theCzech
Republic,Austria,Poland,HungaryandLatvia,aswellastradingactivitiesinScandinaviaandFinland;b)“RestofMediterranean”ismainly
comprisedofCEMEX’soperationsinCroatia,theUnitedArabEmiratesandIsrael;c)“RestofSouthAmericaandtheCaribbean”or“Restof
SAC”ismainlycomprisedofCEMEX’soperationsinCostaRica,Panama,PuertoRico,theDominicanRepublic,Nicaragua,Jamaicaandother
countriesintheCaribbean,Guatemala,andsmallready-mixconcreteoperationsinArgentina;andd)“RestofAsia”ismainlycomprisedof
CEMEX’soperationsinThailand,Bangladesh,ChinaandMalaysia.Thesegment“Others”refersto:1)cementtrademaritimeoperations,
2)NeorisN.V.,CEMEX’ssubsidiaryinvolvedin thedevelopmentofinformationtechnology solutions,3)theParentCompanyandother
corporateentities,and4)otherminorsubsidiarieswithdifferentlinesofbusiness.
ThemainindicatorusedbyCEMEX’smanagementtoevaluatetheperformanceofeachcountryis“OperatingEBITDA,”representingoperating
earningsbeforeotherexpenses,net,plusdepreciationandamortization,consideringthatsuchamountrepresentsarelevantmeasurefor
CEMEX’smanagementasanindicatoroftheabilitytointernallyfundcapitalexpenditures,aswellasawidelyacceptednancialindicator
tomeasureCEMEX’s abilityto serviceor incurdebt(note16).OperatingEBITDAshould notbeconsidered asanindicatorofCEMEX’s
nancialperformance,asanalternativetocashow,asameasureofliquidity,orasbeingcomparabletoothersimilarlytitledmeasuresof
othercompanies.Thisindicator,whichispresentedintheselectednancialinformationbygeographicoperatingsegment,isconsistentwith
theinformationusedbyCEMEX’smanagementfordecision-makingpurposes.Theaccountingpoliciesappliedtodeterminethenancial
informationbygeographicoperatingsegmentareconsistentwiththosedescribedinnote2.CEMEXrecognizessalesandothertransactions
betweenrelatedpartiesbasedonmarketvalues.
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