building a STRONGER foundation - Cemex

More documents

Recommendations

Info

CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES Notes to the Consolidated Financial Statements – (Continued) As of December 31, 2010, 2009 and 2008 (Millions of Mexican pesos) In addition, a deferred charge for an amount of Ps215 was recognized by the seller under U.S. GAAP and is being amortized over the estimated useful life of the asset beginning in 2009. The amortization expense recognized for U.S. GAAP purposes in the statement of operations as of December 31, 2010 and 2009 was Ps2 and Ps21, respectively. Of the total net income tax expense of approximately Ps2,531 in 2010, income tax benefit of approximately Ps3,420 in 2009 and income tax expense of approximately Ps7,861 in 2008, included in the reconciliation of net income (loss) to U.S. GAAP, income tax expense of approximately Ps559 in 2010, income tax benefit of approximately Ps2,421 in 2009 and income tax expense of approximately Ps2,657 in 2008, are related to deferred income taxes. Current Income Taxes In addition to the reconciling items mentioned above related to deferred income taxes, according to MFRS D-4, current income taxes are presented in the income statement. For U.S. GAAP purposes, current income taxes generated by items recognized directly in equity are recognized in equity, considering also intra-period tax allocation. The reconciliation of net income (loss) to U.S. GAAP for the years ended December 31, 2010, 2009 and 2008, includes a tax expense of approximately Ps4,883, a tax benefit of approximately Ps3,353 and a tax expense of approximately Ps5,091, respectively, for the reclassification of current income taxes from net income (loss) under MFRS to equity under U.S. GAAP. In connection with changes to the tax consolidation regime in Mexico (notes 2N and 15A) under MFRS based on Interpretation 18, during 2010 and 2009, CEMEX recognized a credit of approximately Ps2,911 and a charge of approximately Ps2,245 against retained earnings, respectively, for the partial cancellation in 2010 and the initial recognition in 2009 of the liability portion related to: a) the difference between the sum of the equity of the controlled entities for tax purposes and the equity for tax purposes of the consolidated entity; b) dividends from the controlled entities for tax purposes to CEMEX, S.A.B. de C.V.; and c) other transactions between the companies included in the tax consolidation that represented the transfer of resources within the group. Under U.S. GAAP, the tax effects of a new tax law enactment are recognized in the income statement for the period, therefore, the credit in 2010 and the charge in 2009 to retained earnings mentioned above were reclassified to income tax expense in the statements of operations for the years ended December 31, 2010 and 2009, respectively. Employees' Statutory Profit Sharing (“ESPS”) Until December 31, 2007, for purposes of U.S. GAAP, CEMEX recorded a deferred tax liability related to ESPS in Mexico using the asset and liability method at the statutory rate of 10%. As mentioned in note 2M, beginning January 1, 2008, deferred ESPS under MFRS is calculated and recognized under the asset and liability method. As a result, the reconciling item as of December 31, 2007 under U.S. GAAP was eliminated in the reconciliation of net income (loss) to U.S. GAAP in the year 2008. (d) Accounting for Uncertainty in Income Taxes Pursuant to ASC 740 under U.S. GAAP, CEMEX defines the confidence level that a tax position taken or expected to be taken must meet in order to be recognized in the financial statements. ASC 740-10-25-6 requires that the tax effects of a position must be recognized only if it is “more-likely-than-not” to be sustained based on its technical merits as of the reporting date. In making this assessment, CEMEX has assumed that the tax authorities will examine each position and have full knowledge of all relevant information. Each position has been considered on its own, regardless of its relation to any other broader tax settlement. The more-likely-than-not threshold represents a positive assertion by management that CEMEX is entitled to the economic benefits of a tax position. If a tax position is not considered more-likely-than-not to be sustained, no benefits of the position are to be recognized. Moreover, the more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. If during any period after recognition the threshold ceases to be met, the previously recorded benefit must be derecognized. Likewise, the benefit of a tax position that initially fails to meet the more-likely-than-not threshold should be recognized in a subsequent period if changing facts and circumstances enable the position to meet the threshold, the matter is effectively settled through negotiation or litigation with the tax authorities, or the statute of limitations has expired. A summary of the beginning and ending amount of unrecognized tax benefits recorded under U.S. GAAP as of December 31, 2010, 2009 and 2008, excluding interest and penalties, is as follows: 2010 2009 2008 Balance of tax positions under U.S. GAAP at beginning of year .................... Ps 20,333 13,930 11,198 Additions for tax positions of prior years......................................................... 3,687 2,368 2,217 Additions for tax positions of current year ...................................................... 765 5,110 2,126 Reductions for tax positions related to prior years and other items.................. (2,240) (306) (3,639) Settlements....................................................................................................... (81) (187) (123) Expiration of the statue of limitations.............................................................. (4,195) (236) (24) Foreign currency translation effects................................................................. (1,009) (346) 2,175 Balance of tax positions under U.S. GAAP at end of year............................... Ps 17,260 20,333 13,930 Balance of tax positions under MFRS at end of year....................................... Ps 10,940 9,024 5,474 F-66
CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES Notes to the Consolidated Financial Statements – (Continued) As of December 31, 2010, 2009 and 2008 (Millions of Mexican pesos) CEMEX’s policy is to recognize interest and penalties related to unrecognized tax benefits as part of the income tax in the consolidated statements of operations. Final balance for interest and penalties accrued under MFRS and U.S. GAAP was Ps1,055 and Ps1,981, respectively, as of December 31, 2010, and was Ps1,108 under MFRS and Ps3,064 under U.S. GAAP as of December 31, 2009. Interest and penalties expense (benefit) related to unrecognized tax benefits recorded in the consolidated statements of operations for the years ended December 31, 2010, 2009 and 2008 is as follow: Years MFRS U.S. GAAP 2010 .............................................................................................................................................. Ps (53) (1,006) 2009 .............................................................................................................................................. (15) 154 2008 .............................................................................................................................................. 695 1,341 Tax examinations can involve complex issues, and the resolution of issues may span multiple years, particularly if subject to negotiation or litigation. Although CEMEX believes its estimates of the total unrecognized tax benefits are reasonable, uncertainties regarding the final determination of income tax audit settlements and any related litigation could affect the amount of total unrecognized tax benefits in future periods. It is difficult to estimate the timing and range of possible changes related to the uncertain tax positions, as finalizing audits with the income tax authorities may involve formal administrative and legal proceedings. Accordingly, it is not possible to reasonably estimate the expected changes to the total unrecognized tax benefits over the next 12 months, although any settlements or statute of limitations expirations may result in a significant increase or decrease in the total unrecognized tax benefits, including those positions related to tax examinations being currently conducted. CEMEX files income tax returns in multiple jurisdictions and is subject to examination by income taxing authorities throughout the world. CEMEX’s major tax jurisdictions and the years open for examination are as follows: Country Years Mexico................................................................................................................................................................................. 2005 – 2010 United States........................................................................................................................................................................ 2005 – 2010 Spain.................................................................................................................................................................................... 2006 – 2010 United Kingdom .................................................................................................................................................................. 2006 – 2010 (e) Employee Benefits Severance payments Under U.S. GAAP, post-employment benefits for former or inactive employees, including severance payments, which are not part of a restructuring event, are accrued over the employees' service lives. Beginning January 1, 2005, under MFRS, severance payments that are not part of a restructuring event are accrued over the employees' service lives according to actuarial computations, in a manner similar to U.S. GAAP. For the years ended December 31, 2010, 2009 and 2008, the reconciling item refers to the amortization of the cumulative initial effect from the accounting change under MFRS recognized as of January 1, 2005 as part of the unrecognized net transition obligation. Based on the adoption of amended MFRS D-3, as of January 1, 2008, such cumulative initial effect is amortized over a maximum period of 5 years. In addition, all unamortized actuarial gains and losses were amortized immediately in the results of 2008 under MFRS. Pension and other postretirement benefits In connection with employee pension and other postretirement benefits under MFRS, until December 31, 2007, CEMEX determined the costs of these benefits based on the obligations’ net present value, and the actuarial results which exceed the greater of 10% of the fair value of the plan assets and 10% of the present value of the plan obligations, the prior service cost and the transition liability, are amortized to the operating results over the employees’ estimated active service life (note 2M), as permitted by ASC 715, Compensation – Retirement Benefits Defined Benefit Plans - Pensions, under U.S. GAAP. Resulting from the adoption of amended MFRS D-3 as of January 1, 2008, the prior service cost and transition liability accrued as of December 31, 2007, should be amortized to the income statement over a maximum period of five years, while actuarial results are amortized normally over the employees’ estimated active service lives following the corridor method. The reconciliation of net income (loss) to U.S. GAAP in 2010, 2009 and 2008 includes the reversal of the additional amortization expense recognized under MFRS of approximately Ps36, Ps104 and Ps104, respectively. For the reconciliation of stockholders' equity to U.S. GAAP, based on ASC 715, CEMEX recognizes the funded status (benefits obligation less fair value of plan assets) of defined benefit pension and other postretirement plans as a net asset or liability and recognizes any changes in that funded status in the year in which the changes occur against other comprehensive income ("OCI") within stockholders’ equity under U.S. GAAP to the extent those changes are not included in the net periodic cost. F-67
Page 1:
CEMEX 2010 20F REPORT building a ST
Page 4 and 5:
Securities registered or to be regi
Page 6 and 7:
Qualitative and Quantitative Market
Page 9 and 10:
INTRODUCTION CEMEX, S.A.B. de C.V.
Page 11 and 12:
As a result of the foregoing transa
Page 13 and 14:
In the U.S., the recession was long
Page 15 and 16:
The Financing Agreement contains ev
Page 17 and 18:
The Financing Agreement restricts u
Page 19 and 20:
During 2009, we reduced the aggrega
Page 21 and 22:
The instruments governing our debt
Page 23 and 24:
On the legislative front, during th
Page 25 and 26:
Our operations in South America, Ce
Page 27 and 28:
the depositary to vote the CPOs und
Page 29 and 30:
Beginning in 2008, MFRS B-10 has el
Page 31 and 32:
(1) Cost of sales includes deprecia
Page 33 and 34:
Item 4 - Information on the Company
Page 35 and 36:
As a condition to closing the RMC a
Page 37 and 38:
Provide our customers with the best
Page 39 and 40:
In connection with the implementati
Page 41 and 42:
In 2010, as a result of our efforts
Page 43 and 44:
In addition, we are one of the worl
Page 45 and 46:
(2) Our cement raw materials operat
Page 47 and 48:
Our Corporate Structure We are a ho
Page 49 and 50:
Cement in Mexico is sold principall
Page 51 and 52:
Aggregates. Our aggregates operatio
Page 53 and 54:
Beginning on June 30, 2008, Ready M
Page 55 and 56:
Products and Distribution Channels
Page 57 and 58:
On December 26, 2008, we sold our C
Page 59 and 60:
Ready-Mix Concrete. Our ready-mix c
Page 61 and 62:
Aggregates. In 2010, we reduced fix
Page 63 and 64:
Our Operating Network in France Des
Page 65 and 66:
In April 2006, we initiated an expa
Page 67 and 68:
Our Operating Network in Colombia P
Page 69 and 70:
Our Operations in Nicaragua Overvie
Page 71 and 72:
Our Operations in the United Arab E
Page 73 and 74:
Our Trading Operations In 2010, we
Page 75 and 76:
On December 10, 2010, after receivi
Page 77 and 78:
To prevent, control and remediate e
Page 79 and 80:
As required by the directive, each
Page 81 and 82:
For the 2010 fiscal year, CEMEX wil
Page 83 and 84:
Separately, the government of Venez
Page 85 and 86:
and CEMEX was required by August 11
Page 87 and 88:
January 1, 2008, however, under MFR
Page 89 and 90:
foreign subsidiaries. These instrum
Page 91 and 92:
Valuation reserves on accounts rece
Page 93 and 94:
Stage 1. Communication to the organ
Page 95 and 96:
Year Ended December 31, 2010 Compar
Page 97 and 98:
Geographic Segment 89 Variations in
Page 99 and 100:
United Kingdom Our domestic cement
Page 101 and 102:
ended December 31, 2010, Africa and
Page 103 and 104:
Operating Income. For the reasons m
Page 105 and 106:
Our comprehensive financing result
Page 107 and 108:
The following tables present select
Page 109 and 110:
Mexico Our domestic cement sales vo
Page 111 and 112:
As a result of the decreases in dom
Page 113 and 114:
For the year ended December 31, 200
Page 115 and 116:
South America, Central America and
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
On August 14, 2009, we entered into
Page 123 and 124:
As of December 31, 2010, we had U.S
Page 125 and 126:
Our Perpetual Debentures As of Dece
Page 127 and 128:
The Financing Agreement, as amended
Page 129 and 130:
In 1999, CEMEX entered into an agre
Page 131 and 132:
Our Equity Derivative Forward Contr
Page 133 and 134:
As of December 31, 2009 and 2010, C
Page 135 and 136:
In addition, we have entered into f
Page 137 and 138:
Private Cash Tender Offer to Holder
Page 139 and 140:
Name, Position (Age) Experience Jai
Page 141 and 142:
Name, Position (Age) Experience Ram
Page 143 and 144:
Tomás Milmo Santos (46) Has been a
Page 145 and 146:
Set forth below are the names of th
Page 147 and 148:
Consolidated ESOP Information Stock
Page 149 and 150:
Item 7 - Major Shareholders and Rel
Page 151 and 152:
The following table sets forth the
Page 153 and 154:
Item 10 - Additional Information Ar
Page 155 and 156:
exempt from registration pursuant t
Page 157 and 158:
Our board of directors shall prepar
Page 159 and 160:
Under our by-laws, shareholders rep
Page 161 and 162:
On June 2, 2008, CEMEX, through one
Page 163 and 164:
Exchange Controls See “Item 3 —
Page 165 and 166:
The gross amount of any dividends p
Page 167 and 168:
We have agreed to pay some of the o
Page 169 and 170:
Item 16G - Corporate Governance Sec
Page 171 and 172:
Item 17 - Financial Statements Not
Page 173 and 174:
4.17 Debenture Purchase Agreement,
Page 175 and 176:
4.27.3 Amendment No. 1 to U.S.$525,
Page 177 and 178:
4.41.4 Accession Letter, dated Janu
Page 179 and 180:
4.57 Amended and Restated Dealer Ma
Page 181:
SIGNATURES CEMEX, S.A.B. de C.V. he
Page 184 and 185:
The Board of Directors and Stockhol
Page 186 and 187:
CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
Page 188 and 189:
CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
Page 190 and 191:
1. DESCRIPTION OF BUSINESS CEMEX, S
Page 192 and 193:
C) USE OF ESTIMATES CEMEX, S.A.B. D
Page 194 and 195:
J) IMPAIRMENT OF LONG LIVED ASSETS
Page 196 and 197:
Contingencies and commitments (note
Page 198 and 199: CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
Page 200 and 201: V) CONCENTRATION OF CREDIT CEMEX, S
Page 206 and 207: Net sales by product and geographic
Page 208 and 209: 4. CASH AND INVESTMENTS CEMEX, S.A.
Page 222 and 223: II. Equity forwards in third party
Page 224 and 225: 14. EMPLOYEE BENEFITS Defined contr
Page 232 and 233: 17. EXECUTIVE STOCK-BASED COMPENSAT
Page 234 and 235: 18. EARNINGS (LOSS) PER SHARE CEMEX
Page 236 and 237: D) CONTRACTUAL OBLIGATIONS CEMEX, S
Page 246 and 247: Reconciliation of stockholders’ e
Page 258 and 259: (k) Other U.S. GAAP Adjustments Def
show all

building a STRONGER foundation - Cemex

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?