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Business Combinations, Discontinued Operations, Sale of Other Disposal Groups and Selected Financial Information by Reportable Segment and Line of Business

12 Months Ended

Dec. 31, 2020

Text block [abstract]

Business Combinations, Discontinued Operations, Sale of Other Disposal Groups and Selected Financial Information by Reportable Segment and Line of Business

5)	BUSINESS COMBINATIONS, DISCONTINUED OPERATIONS, SALE OF OTHER DISPOSAL GROUPS AND SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

5.1)	BUSINESS COMBINATIONS

In January 2020 and April 2020 a subsidiary of CEMEX in Israel acquired a

ready-mix

business from Netivei Noy for an amount in shekels equivalent to $33. As of December 31, 2020, based on the preliminary valuation of the fair values of the assets acquired and liabilities assumed, the net assets of Netivei Noy amounted to $33 and goodwill was determined in the amount of $2.

In August 2018, a subsidiary of CEMEX in the United Kingdom acquired all the shares of the

ready-mix

producer Procon Readymix Ltd for an amount in pounds sterling equivalent to $22. The net assets of Procon amounted to $10 and goodwill was determined in the amount of $12.

5.2)	DISCONTINUED OPERATIONS

On August 3, 2020, through a subsidiary in the United Kingdom, CEMEX concluded the sale to Breedon Group plc of certain assets for an amount in Pounds equivalent to $230, including $30 of debt. The assets sold consisted of 49

ready-mix

plants, 28 aggregate quarries, four depots, one cement terminal, 14 asphalt plants, four concrete products operations, as well as a portion of CEMEX’s paving solutions business in the United Kingdom. CEMEX retained significant operations in the United Kingdom related with the production and sale of cement,

ready-mix

concrete, aggregates, asphalt and paving solutions. As of December 31, 2019, the assets and liabilities associated with this segment under negotiation in the United Kingdom were presented in the statement of financial position within the line items of “Assets held for sale,” including a proportional allocation of goodwill of $47, and “Liabilities directly related to assets held for sale,” respectively. Moreover, for purposes of the statements of operations for the period from January 1 to August 3, 2020, including in 2020 a loss on sale of $57 net of the proportional allocation of goodwill mentioned above, and the years ended December 31, 2019 and 2018 the operations related to this segment are presented net of tax in the single line item “Discontinued operations.”

On March 6, 2020, CEMEX concluded the sale to Eagle Materials Inc. of its U.S. subsidiary Kosmos Cement Company (“Kosmos”), a partnership with a subsidiary of Buzzi Unicem S.p.A. in which CEMEX held a 75% interest, for a total consideration of $665, of which the proceeds to CEMEX were $499. The assets sold consisted of Kosmos’ cement plant in Louisville, Kentucky, as well as related assets which include seven distribution terminals and raw material reserves. As of December 31, 2019, the assets and liabilities associated with this sale in the United States were presented in the statement of financial position within the line items of “assets held for sale,” including a proportional allocation of goodwill of $291, and “liabilities directly related to assets held for sale,” respectively. Moreover, CEMEX’s statements of operations present the operations related to this segment from January 1 to March 6, 2020, including in 2020 a gain on sale of $14 net of the proportional allocation of goodwill mentioned above, and for the years ended December 31, 2019 and 2018, respectively, net of income tax in the single line item “Discontinued operations.”

On June 28, 2019, after obtaining customary authorizations, CEMEX concluded with several counterparties the sale of its

ready-mix

and aggregates business in the central region of France for an aggregate price in euro equivalent to $36. CEMEX’s operations of these disposed assets in France for the period from January 1 to June 28, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations,” including in 2019 a gain on sale of $17 net of a proportional allocation of goodwill related to this reporting segment of $8.

On May 31, 2019, CEMEX concluded the sale of its aggregates and

ready-mix

assets in the North and North-West regions of Germany to GP Günter Papenburg AG for a price in euro equivalent to $97. The assets divested in Germany consisted of four aggregates quarries and four

ready-mix

facilities in North Germany, and nine aggregates quarries and 14

ready-mix

facilities in North-West Germany. CEMEX’s operations of these disposed assets for the period from January 1 to May 31, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations,” including in 2019 a gain on sale of $59.

On March 29, 2019, CEMEX closed the sale of assets in the Baltics and Nordics to the German building materials group Schwenk for a price in euro equivalent to $387. The Baltic assets divested consisted of one cement production plant in Broceni with a production capacity of approximately 1.7 million tons, four aggregates quarries, two cement quarries, six

ready-mix

plants, one marine terminal and one land distribution terminal in Latvia. The assets divested also included CEMEX’s 37.8%

non-controlling

interest in Akmenes Cementas AB owner of a cement production plant in Akmene in Lithuania with a production capacity of approximately 1.8 million tons, as well as the exports business to Estonia. The Nordic assets divested consisted of three import terminals in Finland, four import terminals in Norway and four import terminals in Sweden. CEMEX’s operations of these disposed assets for the period from January 1 to March 29, 2019 and for the year ended December 31, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations,” including in 2019 a gain on sale of $66.

On March 29, 2019, CEMEX signed a binding agreement with Çimsa Çimento Sanayi Ve Ticaret A.Ş. to divest CEMEX’s white cement business, except for Mexico and the U.S., for an initial price of $180 subject to adjustments, including its Buñol cement plant in Spain and its white cement customer list. The transaction is pending for approval from regulators. CEMEX currently expects it could close this divestment during the first quarter of 2021. As of December 31, 2020, and 2019 the assets and liabilities associated with the white cement business were presented in the Statement of Financial Position within the line items of “Assets and liabilities directly related to assets held for sale”, as correspond. CEMEX’s operations of these assets in Spain for the years ended December 31, 2020, 2019 and 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations.”

On September 27, 2018, CEMEX concluded the sale of its construction materials operations in Brazil (the “Brazilian Operations”) through the sale to Votorantim Cimentos N/NE S.A. of all the shares of CEMEX’s Brazilian subsidiary Cimento Vencemos Do Amazonas Ltda, consisting of a fluvial cement distribution terminal located in Manaus, Amazonas province, as well as the operation license for a price of $31. CEMEX’s Brazilian Operations for the period from January 1 to September 27, 2018 are reported in the statements of operations, net of income tax, in the single line item “Discontinued operations” net of a gain on sale of $12.

As of December 31, 2020, the following table presents condensed combined information of the statement of financial position for the assets held for sale in Spain, as mentioned above:


		2020
Current assets	$		4
Non-current assets			103

Total assets of the disposal group			107
Current liabilities			—
Non-current liabilities			—

Total liabilities directly related to disposal group			—

Total net assets of disposal group	$		107

In addition, the following table presents condensed combined information of the statements of operations of CEMEX’s discontinued operations previously mentioned in: a) the United Kingdom for the period from January 1 to August 3, 2020 and for the years ended December 31, 2019 and 2018; b) the United States related to Kosmos for the period from January 1 to March 6, 2020 and for the years ended December 31, 2019 and 2018; c) France for the period from January 1 to June 28, 2019 and for the year ended December 31, 2018; d) Germany for the period from January 1 to May 31, 2019 and for the year ended December 31, 2018; e) the Baltics and Nordics for the period from January 1 to March 29, 2019 and for the year ended December 31, 2018; f) Spain for the years ended December 31, 2020, 2019 and 2018; and g) Brazil for the period from January 1 to September 27, 2018:


		2020			2019			2018
Revenues	$		189			572			868
Cost of sales and operating expenses			(184	)		(534	)		(792	)
Other income (expenses), net			(5	)		1			(1	)
Financial expenses, net and others			—			—			(2	)

Earnings before income tax			—			39			73
Income tax			(75	)		(6	)		(7	)

Result of discontinued operations			(75	)		33			66
Net disposal result			(45	)		55			11

Net result of discontinued operations	$		(120	)		88			77

5.3)	SELECTED FINANCIAL INFORMATION BY REPORTABLE SEGMENT AND LINE OF BUSINESS

Reportable segments represent the components of CEMEX that engage in business activities from which CEMEX may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s top management to make decisions about resources to be allocated to the segments and assess their performance, and for which discrete financial information is available. CEMEX operates geographically and by business on a regional basis.

Beginning April 1, 2020 and for subsequent periods, the geographical regions Europe and Asia, Middle East and Africa (“AMEA”) were merged and reorganized under a single regional president and was denominated Europe, Middle East, Africa and Asia (“EMEAA”). For the reported periods, the Company’s operations were organized in four geographical regions, each under the supervision of a regional president, as follows: 1) Mexico, 2) United States, 3) EMEAA and 4) South, Central America and the Caribbean (“SCA&C”). The accounting policies applied to determine the financial information by reportable segment are consistent with those described in note 3.

Considering similar regional and economic characteristics and/or materiality, certain countries have been aggregated and presented as single line items as follows: a) “Rest of EMEAA” refers mainly to CEMEX’s operations and activities in Poland, the Czech Republic, Croatia, Egypt and the United Arab Emirates; b) “Rest of SCA&C” refers mainly to CEMEX’s operations and activities in Costa Rica, Puerto Rico, Nicaragua, Jamaica, the Caribbean, Guatemala and El Salvador, excluding the operations of Trinidad Cement Limited (“TCL”); and c) “Caribbean TCL” refers to TCL’s operations mainly in Trinidad and Tobago, Jamaica, Guyana and Barbados. The segment “Others” refers to: 1) cement trade maritime operations, 2) Neoris N.V., CEMEX’s subsidiary involved in the business of information technology solutions, 3) the Parent Company, other corporate entities and finance subsidiaries, and 4) other minor subsidiaries with different lines of business.

Selected information of the consolidated statements of operations by reportable segment for the years 2020, 2019 and 2018, excluding the share of profits of equity accounted investees by reportable segment that is included in the note 14.1, was as follows:


2020		Revenues (including intragroup transactions)		Less: Intragroup transactions			Revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		2,812		(134	)		2,678		931			148		783			(46	)		(31	)		(4	)
United States			3,994		(1	)		3,993		747			440		307			(1,350	)		(53	)		(20	)
EMEAA
United Kingdom			739		—			739		88			67		21			(73	)		(9	)		(77	)
France			795		—			795		76			49		27			(1	)		(12	)		3
Germany			489		(37	)		452		67			28		39			(3	)		(2	)		(3	)
Spain			319		(16	)		303		25			39		(14	)		(195	)		(3	)		(9	)
Philippines 1			398		—			398		118			46		72			(1	)		2			2
Israel			754		—			754		115			28		87			—			(4	)		1
Rest of EMEAA			959		(16	)		943		149			81		68			(27	)		(5	)		(22	)
SCA&C
Colombia 2			404		—			404		86			25		61			(14	)		(5	)		(13	)
Panama 2			80		(7	)		73		12			16		(4	)		(19	)		(1	)		1
Caribbean TCL 3			251		(7	)		244		65			22		43			(9	)		(6	)		(8	)
Dominican Republic			229		(11	)		218		84			8		76			(5	)		(1	)		4
Rest of SCA&C 2			508		(17	)		491		124			19		105			(41	)		(2	)		15
Others			957		(472	)		485		(227	)		101		(328	)		5			(645	)		20

Continuing operations			13,688		(718	)		12,970		2,460			1,117		1,343			(1,779	)		(777	)		(110	)
Discontinued operations			189		—			189		14			9		5			(5	)		—			—

Total	$		13,877		(718	)		13,159		2,474			1,126		1,348			(1,784	)		(777	)		(110	)


2019		Revenues (including intragroup transactions)		Less: Intragroup transactions			Revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		2,897		(105	)		2,792		969			159		810			(48	)		(36	)		(1	)
United States			3,780		—			3,780		629			392		237			(22	)		(64	)		(13	)
EMEAA
United Kingdom			749		—			749		119			69		50			(2	)		(11	)		(17	)
France			869		—			869		94			48		46			(4	)		(11	)		—
Germany			439		(25	)		414		65			28		37			3			(3	)		(4	)
Spain			319		(25	)		294		16			34		(18	)		(8	)		(2	)		2
Philippines 1			458		—			458		117			38		79			1			6			4
Israel			660		—			660		89			23		66			—			(2	)		1
Rest of EMEAA			958		(14	)		944		132			71		61			(7	)		(7	)		26
SCA&C
Colombia 2			504		—			504		90			29		61			(21	)		(4	)		(3	)
Panama 2			181		(2	)		179		48			17		31			(9	)		(1	)		—
Caribbean TCL 3			248		(8	)		240		56			23		33			(2	)		(6	)		(4	)
Dominican Republic			245		(17	)		228		84			9		75			(1	)		—			—
Rest of SCA&C 2			511		(17	)		494		107			20		87			(60	)		(3	)		(6	)
Others			1,104		(579	)		525		(237	)		85		(322	)		(167	)		(567	)		(56	)

Continuing operations			13,922		(792	)		13,130		2,378			1,045		1,333			(347	)		(711	)		(71	)
Discontinued operations			572		—			572		89			51		38			1			—			—

Total	$		14,494		(792	)		13,702		2,467			1,096		1,371			(346	)		(711	)		(71	)


2018		Revenues (including intragroup transactions)		Less: Intragroup transactions			Revenues		Operating EBITDA			Less: Depreciation and amortization		Operating earnings before other expenses, net			Other expenses, net			Financial expense			Other financing items, net
Mexico	$		3,302		(91	)		3,211		1,217			148		1,069			(33	)		(32	)		(3	)
United States			3,614		—			3,614		686			369		317			(18	)		(53	)		(11	)
EMEAA
United Kingdom			773		—			773		117			67		50			(7	)		(12	)		(22	)
France			895		—			895		91			50		41			(47	)		(13	)		—
Germany			429		(75	)		354		37			28		9			(8	)		(3	)		(4	)
Spain			334		(47	)		287		13			33		(20	)		(16	)		(3	)		3
Philippines 1			448		—			448		93			36		57			(3	)		(2	)		(4	)
Israel			630		—			630		87			21		66			—			(3	)		(1	)
Rest of EMEAA			1,090		(51	)		1,039		157			72		85			(12	)		(6	)		(5	)
SCA&C
Colombia 2			524		—			524		97			29		68			6			(7	)		(22	)
Panama 2			222		—			222		66			17		49			(3	)		(1	)		—
Caribbean TCL 3			254		(5	)		249		58			19		39			(15	)		(3	)		(2	)
Dominican Republic			218		(16	)		202		61			10		51			(1	)		(1	)		2
Rest of SCA&C 2			590		(20	)		570		133			21		112			(7	)		(3	)		14
Others			1,247		(734	)		513		(228	)		62		(290	)		(132	)		(580	)		53

Continuing operations			14,570		(1,039	)		13,531		2,685			982		1,703			(296	)		(722	)		(2	)
Discontinued operations			868		—			868		147			71		76			(1	)		(2	)		—

Total	$		15,438		(1,039	)		14,399		2,832			1,053		1,779			(297	)		(724	)		(2	)

CEMEX’s operations in the Philippines are mainly conducted through CEMEX Holdings Philippines, Inc. (“CHP”), a Philippine company whose shares trade on the Philippines Stock Exchange. As of December 31, 2020 and 2019, there is a

non-controlling

interest in CHP of 22.16% and 33.22% of its ordinary shares (note 21.4).

CEMEX Latam Holdings, S.A. (“CLH”), a company incorporated in Spain, trades its ordinary shares on the Colombian Stock Exchange. CLH is the indirect holding company of CEMEX’s operations in Colombia, Panama, Costa Rica, Guatemala, Nicaragua and El Salvador. At year end 2020 and 2019, there is a

non-controlling

interest in CLH of 7.63% and 26.83%, respectively, of its ordinary shares, excluding shares held in CLH’s treasury (note 21.4).

3	The shares of TCL trade on the Trinidad and Tobago Stock Exchange. As of December 31, 2020 and 2019, there is a non-controlling interest in TCL of 30.17% of its ordinary shares in both years (note 21.4).

Debt by reportable segment is disclosed in note 17.1. As of December 31, 2020 and 2019, selected statement of financial position information by reportable segment was as follows:


2020		Equity accounted investees		Other segment assets		Total assets		Total liabilities		Net assets by segment			Additions to fixed assets 1
Mexico	$		—		3,837		3,837		1,523		2,314			144
United States			146		12,296		12,442		2,490		9,952			284
EMEAA
United Kingdom			6		1,507		1,513		1,368		145			55
France			53		999		1,052		585		467			62
Germany			4		412		416		357		59			24
Spain			—		1,023		1,023		230		793			22
Philippines			—		761		761		158		603			82
Israel			—		769		769		507		262			28
Rest of EMEAA			9		1,172		1,181		417		764			51
SCA&C
Colombia			—		1,105		1,105		514		591			14
Panama			—		295		295		78		217			3
Caribbean TCL			—		493		493		258		235			16
Dominican Republic			—		158		158		66		92			2
Rest of SCA&C			—		333		333		162		171			7
Others			292		1,568		1,860		9,754		(7,894	)		1

Total			510		26,728		27,238		18,467		8,771			795
Assets held for sale and related liabilities (note 13.1)			—		187		187		6		181			—

Total consolidated	$		510		26,915		27,425		18,473		8,952			795


2019		Equity accounted investees		Other segment assets		Total assets		Total liabilities		Net assets by segment			Additions to fixed assets 1
Mexico	$		—		3,910		3,910		1,443		2,467			199
United States			143		13,755		13,898		2,440		11,458			398
EMEAA
United Kingdom			6		1,556		1,562		1,225		337			67
France			50		928		978		460		518			38
Germany			4		397		401		353		48			25
Spain			—		1,190		1,190		185		1,005			34
Philippines			—		689		689		141		548			84
Israel			—		611		611		429		182			33
Rest of EMEAA			11		1,168		1,179		435		744			65
SCA&C
Colombia			—		1,187		1,187		428		759			25
Panama			—		337		337		105		232			10
Caribbean TCL			—		542		542		236		306			21
Dominican Republic			—		193		193		66		127			8
Rest of SCA&C			—		381		381		164		217			18
Others			267		1,199		1,466		10,392		(8,926	)		8

Total			481		28,043		28,524		18,502		10,022			1,033
Assets held for sale and related liabilities (note 13.1)			—		839		839		37		802			—

Total consolidated	$		481		28,882		29,363		18,539		10,824			1,033

1	In 2020 and 2019, the column “Additions to fixed assets” includes capital expenditures, which comprises acquisitions of property, machinery and equipment as well as additions of assets for the right-of-use, for combined amounts of $795 and $1,033, respectively (note 15).

Revenues by line of business and reportable segment for the years ended December 31, 2020, 2019 and 2018 were as follows:


2020		Cement		Concrete		Aggregates		Others		Eliminations			Revenues
Mexico	$		2,001		628		172		587		(710	)		2,678
United States			1,599		2,255		954		481		(1,296	)		3,993
EMEAA
United Kingdom			201		274		314		229		(279	)		739
France			—		647		340		8		(200	)		795
Germany			210		202		69		116		(145	)		452
Spain			233		83		24		25		(62	)		303
Philippines			398		—		—		3		(3	)		398
Israel			—		623		195		113		(177	)		754
Rest of EMEAA			643		363		80		34		(177	)		943
SCA&C
Colombia			294		119		34		64		(107	)		404
Panama			67		14		4		4		(16	)		73
Caribbean TCL			245		5		7		15		(28	)		244
Dominican Republic			185		15		5		38		(25	)		218
Rest of SCA&C			458		32		9		24		(32	)		491
Others			—		—		—		959		(474	)		485

Continuing operations			6,534		5,260		2,207		2,700		(3,731	)		12,970
Discontinued operations			68		28		55		53		(15	)		189

Total	$		6,602		5,288		2,262		2,753		(3,746	)		13,159


2019		Cement		Concrete		Aggregates		Others		Eliminations			Revenues
Mexico	$		2,009		798		196		445		(656	)		2,792
United States			1,608		2,189		917		332		(1,266	)		3,780
EMEAA
United Kingdom			227		310		290		246		(324	)		749
France			—		720		355		4		(210	)		869
Germany			192		184		62		43		(67	)		414
Spain			228		86		23		18		(61	)		294
Philippines			457		—		—		2		(1	)		458
Israel			—		554		166		78		(138	)		660
Rest of EMEAA			609		378		89		28		(160	)		944
SCA&C
Colombia			363		176		53		51		(139	)		504
Panama			141		49		15		12		(38	)		179
Caribbean TCL			241		9		5		9		(24	)		240
Dominican Republic			194		27		8		25		(26	)		228
Rest of SCA&C			448		48		11		18		(31	)		494
Others			—		—		—		1,107		(582	)		525

Continuing operations			6,717		5,528		2,190		2,418		(3,723	)		13,130
Discontinued operations			229		110		154		85		(6	)		572

Total	$		6,946		5,638		2,344		2,503		(3,729	)		13,702


2018		Cement		Concrete		Aggregates		Others		Eliminations			Revenues
Mexico	$		2,302		898		210		642		(841	)		3,211
United States			1,584		2,088		850		393		(1,301	)		3,614
EMEAA
United Kingdom			237		325		300		281		(370	)		773
France			—		735		353		9		(202	)		895
Germany			186		197		56		136		(221	)		354
Spain			250		70		19		17		(69	)		287
Philippines			444		—		3		2		(1	)		448
Israel			—		521		159		110		(160	)		630
Rest of EMEAA			656		416		94		205		(332	)		1,039
SCA&C
Colombia			353		189		55		92		(165	)		524
Panama			171		71		23		14		(57	)		222
Caribbean TCL			245		10		5		13		(24	)		249
Dominican Republic			178		27		9		24		(36	)		202
Rest of SCA&C			510		63		14		24		(41	)		570
Others			—		—		—		1,285		(772	)		513

Continuing operations			7,116		5,610		2,150		3,247		(4,592	)		13,531
Discontinued operations			420		219		236		144		(151	)		868

Total	$		7,536		5,829		2,386		3,391		(4,743	)		14,399