Cemex 2012 Annual Report Download - page 73

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Notes to the
consolidated
financial
statements
73
< previous I contents I next >
15C) Analysis of goodwill impairment
As of December 31, 2012 and 2011, goodwill balances allocated by operating segment were as follows:
2012 2011
United States $ 109,326 117,867
Mexico 6,369 6,369
Northern Europe
United Kingdom 4,552 4,647
France 3,451 3,690
Rest of Northern Europe 1 297 420
Mediterranean
Spain 8,660 9,549
United Arab Emirates 1,371 1,383
Egypt 231 231
South America and the Caribbean
Colombia 5,510 5,628
Dominican Republic 201 214
Rest of South America and the Caribbean 2 733 775
Asia
Philippines 1,389 1,513
Others
Other operating segments 3 354 388
$ 142,444 152,674
1 This caption refers to the operating segments in the Czech Republic and Latvia.
2 This caption refers to the operating segments in the Caribbean, Argentina, Costa Rica and Panama.
3 This caption is primarily associated with Neoris N.V., CEMEX’s subsidiary in the information technology and software development business.
CEMEX is engaged in the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other
construction materials. The geographic operating segments reported by CEMEX (note 4) represent CEMEX’s groups of CGUs to
which goodwill has been allocated for purposes of testing goodwill for impairment. Correspondingly, each of CEMEX’s geographic
operating segments is comprised of CEMEX’s operations in a country. Each country or operating segment is, in turn, comprised
of a lower level of cash-generating units, which are not larger than an operating segment, identified by CEMEX as geographical
zones within the country in which all main business activities are conducted. For purposes of goodwill impairment tests, all cash-
generating units within a country are aggregated, as goodwill is allocated at that level. In order to arrive at these conclusions,
CEMEX evaluated: a) that after the acquisition, goodwill is allocated at the level of the reportable operating segment and represents
the lowest level within CEMEX at which goodwill is monitored for internal management purposes and reflects the way CEMEX
manages its operations and allocates resources; b) that the cash-generating units that comprise the reported segment have similar
economic characteristics; c) that the reported segments are used by CEMEX to organize and evaluate its activities in its internal
information systems; d) the homogeneous nature of the items produced and traded in each cash-generating unit, which are all
used by the construction industry; e) the vertical integration in the value chain of the products comprising each component; f) the
type of clients, which are substantially similar in all components; g) the operative integration among components; and h) that the
compensation system of a specific country is based on the consolidated results of the geographic operating segment and not on
the particular results of the components. Considering materiality for disclosure purposes, in note 15C, certain balances of goodwill
were presented for Rest of Northern Europe or Rest of South America and the Caribbean, but this does not represent that goodwill
was tested at a level higher than for operations in an individual country.