Cemex 2012 Annual Report Download - page 100

Notes to the
consolidated
financial
statements
100
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• On November 10, 2010, the Colombian tax authority notified CEMEX Colombia of a proceeding in which the Colombian tax
authority rejected certain tax losses taken by CEMEX Colombia in its 2008 year-end tax return. In addition, the Colombian
tax authority assessed an increase in taxes to be paid by CEMEX Colombia in the amount of approximately 43 billion
Colombian pesos (US$24 or $308) and imposed a penalty in the amount of approximately 69 billion Colombian pesos
(US$39 or $501), both amounts as of December 31, 2012. The Colombian tax authority argues that CEMEX Colombia is
limited in its use of prior year tax losses to 25% of such losses per subsequent year. CEMEX believes that the tax provision
that limits the use of prior year tax losses does not apply in the case of CEMEX Colombia because the applicable tax law was
repealed in 2006. Furthermore, CEMEX believes that the Colombian tax authority is no longer able to review the 2008 tax
return because the time to review such return has already expired pursuant to Colombian law. The Colombian tax authority
issued an ocial settlement on July 27, 2011, which confirmed its position in the special request. The ocial settlement
was appealed by CEMEX on September 27, 2011. On July 31, 2012, the Colombian tax authority notified CEMEX Colombia
of the resolution confirming the ocial liquidation. In November 2012, CEMEX Colombia appealed the ocial assessment.
CEMEX believes it has adequately reserved for this proceeding. Nonetheless, CEMEX is not able to assess the likelihood of
an adverse result or potential damages which could be borne by CEMEX Colombia, but if adversely resolved, this proceeding
could have a material adverse impact on CEMEX’s liquidity and financial position.
• On April 1, 2011, the Colombian Tax Authority notified CEMEX Colombia of a special proceeding (requerimiento especial) in
which the Colombian Tax Authority rejected certain deductions taken by CEMEX Colombia in its 2009 year-end tax return.
The Colombian Tax Authority assessed an increase in taxes to be paid by CEMEX Colombia in the amount of approximately
$90 billion Colombian Pesos (approximately US$51 or $655) and imposed a penalty in the amount of approximately $144
billion Colombian Pesos (approximately US$81 or $1,041). The Colombian Tax Authority argues that certain expenses are not
deductible for fiscal purposes because they are not linked to direct revenues recorded in the same fiscal year, without taking
into consideration that future revenue will be taxed with income tax in Colombia. CEMEX Colombia responded to the special
proceeding notice on June 25, 2011. On December 15, 2011, the Colombian Tax Authority issued its final determination,
which confirmed the information in the special proceeding. CEMEX Colombia appealed the final determination on February
15, 2012 and it is expected to have a response from the Tax Authorities no later than February, 2013. At this stage, CEMEX
is not able to assess the likelihood of an adverse result or potential damages which could be borne by CEMEX Colombia,
but if adversely resolved, this proceeding could have a material adverse impact on CEMEX’s liquidity and financial position.
20) Stockholders’ equity
As of December 31, 2012 and 2011, stockholders’ equity excludes investments in CPOs of CEMEX, S.A.B. de C.V. held by
subsidiaries of approximately $229 (18,028,276 CPOs) and $129 (17,334,881 CPOs), respectively, which were eliminated
within “Other equity reserves.” The increase in the number of CPOs held by subsidiaries during 2012 relates to CPOs received by
subsidiaries as a result of the recapitalization of retained earnings as described below.
20A) Common stock and additional paid-in capital
As of December 31, 2012 and 2011, the breakdown of common stock and additional paid-in capital was as follows:
2012 2011
Common stock $ 4,139 4,135
Additional paid-in capital 113,929 109,309
$ 118,068 113,444