Exhibit 2

CEMEX, S.A.B. DE C.V.

Separate Financial Statements

December 31, 2022, 2021 and 2020

(With Independent Auditor’s Report Thereon)

INDEX TO THE PARENT COMPANY-ONLY FINANCIAL STATEMENTS

CEMEX, S.A.B. de C.V. (Parent Company-Only):

 

Statements of Operations for the years ended December 31, 2022, 2021 and 2020			1
Statements of Comprehensive Income (Loss) for the years ended December 31, 2022, 2021 and 2020			2
Statements of Financial Position as of December 31, 2022 and 2021			3
Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020			4
Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, 2021 and 2020			5
Notes to the Financial Statements			6
Independent Auditors’ Report – KPMG Cárdenas Dosal, S.C.			40

Exhibit 2

CEMEX, S.A.B. de C.V. (PARENT COMPANY-ONLY)

Statements of Operations

(Millions of Pesos)

 

				For the years ended December 31,
		Notes		2022				2021				2020
Revenues		3.14, 4		$	88,866				79,989				59,610
Cost of sales		3.15, 5			(59,077	)			(51,880	)			(28,101	)
Gross profit					29,789				28,109				31,509
Operating expenses		3.15, 6			(18,040	)			(13,857	)			(19,024	)
Operating earnings before other income (expenses), net					11,749				14,252				12,485
Other income (expenses), net		7			(921	)			4,287				(714	)
Operating earnings					10,828				18,539				11,771
Financial expense		8.1, 18			(9,319	)			(13,180	)			(14,230	)
Financial income and other items, net.		8.2			2,545				5,084				3,766
Foreign exchange results					(439	)			2,441				(3,904	)
Share of profit of equity accounted investees		14			12,577				2,028				(29,748	)
Net income (loss) before income tax					16,192				14,912				(32,345	)
Income tax		21			1,149				272				(217	)
NET INCOME (LOSS)				$	17,341				15,184				(32,562	)

The accompanying notes are part of these Parent Company-only financial statements.

 

1

CEMEX, S.A.B. de C.V. (PARENT COMPANY-ONLY)

Statements of Comprehensive Income (Loss)

(Millions of Pesos)

 

				For the years ended December 31,
		Notes		2022				2021				2020
NET INCOME (LOSS)				$	17,341				15,184				(32,562	)
Items that will be reclassified subsequently to the statement of operations
Results from derivative financial instruments designated as cash flow hedges		18.4			2,105				776				(259	)
Items that will not be reclassified subsequently to the statement of operations
Currency translation effects and results on equity of subsidiaries		3.3			(12,153	)			3,998				17,537
Results from derivative financial instruments designated as net investment hedge		18.4			(561	)			123				1,144
Net actuarial gains (losses) from remeasurements of defined benefit pension plans		20			(33	)			(9	)			—
Income tax recognized directly in other comprehensive income		21.2			519				48				(261	)
Total items of other comprehensive (loss) income for the period					(10,123	)			4,936				18,161
TOTAL COMPREHENSIVE INCOME (LOSS)				$	7,218				20,120				(14,401	)

The accompanying notes are part of these Parent Company-only financial statements.

 

2

CEMEX, S.A.B. de C.V. (PARENT COMPANY-ONLY)

Statements of Financial Position

(Millions of Pesos)

 

				As of December 31,
		Notes		2022				2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents		9		$	2,652				4,556
Trade accounts receivable, net		10			4,243				3,672
Other accounts receivable		11			1,508				1,460
Inventories		12			1,121				767
Accounts receivable from related parties		19.1			2,976				1,688
Other current assets		13			531				430
Total current assets					13,031				12,573
NON-CURRENT ASSETS
Equity accounted investees		14.2			355,529				362,425
Other investments and non-current accounts receivable		15			1,765				1,390
Accounts receivable from related-parties long term		19.1			677				1,046
Property, machinery and equipment, net and assets for the right-of-use, net		16			51,399				49,664
Total non-current assets					409,370				414,525
TOTAL ASSETS				$	422,401				427,098
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Other current financial obligations		18.2		$	2,498				2,542
Trade payables					6,963				7,162
Current accounts payable to related parties		19.1			65,599				59,590
Other current liabilities		17			9,944				7,354
Total current liabilities					85,004				76,648
NON-CURRENT LIABILITIES
Non-current debt		18.1			128,027				141,592
Other non-current financial obligations		18.2			1,412				1,705
Pensions and other post-employment benefits		20			557				119
Non-current accounts payable to related parties		19.1			59				72
Deferred income tax liabilities		21.2			1,668				3,555
Other non-current liabilities					901				1,948
Total non-current liabilities					132,624				148,991
TOTAL LIABILITIES					217,628				225,639
STOCKHOLDERS’ EQUITY
Common stock and additional paid-in capital		22.1			105,572				105,572
Other equity reserves and subordinated notes		3.13			32,894				46,921
Retained earnings		22.2			66,307				48,966
TOTAL STOCKHOLDERS’ EQUITY					204,773				201,459
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY				$	422,401				427,098

The accompanying notes are part of these Parent Company-only financial statements.

 

3

CEMEX, S.A.B. de C.V. (PARENT COMPANY-ONLY)

Statements of Cash Flows

(Millions of Pesos)

 

				Years ended December 31,
		Notes		2022				2021				2020
OPERATING ACTIVITIES
Net income (loss)				$	17,341				15,184				(32,562	)
Adjustments for:
Depreciation of property, machinery and equipment		5, 6, 16			2,373				282				2,397
Share of profit of equity accounted investees		14			(12,577	)			(2,028	)			29,748
Financial items, net					7,213				5,655				14,368
Income taxes		21.1			(1,149	)			(272	)			217
Results from the sale of assets		7			(1	)			(50	)			6
Result from sale of emission allowances		7			—				(4,210	)			—
Changes in working capital, excluding income taxes					9,578				10,297				(14,188	)
Cash flow provided (used in) by operating activities					22,778				24,858				(14	)
Financial expense paid					(9,867	)			(8,255	)			(12,219	)
Income taxes paid		21.1			(138	)			(470	)			(435	)
Net cash flows provided by (used in) operating activities					12,773				16,133				(12,668	)
INVESTING ACTIVITIES
Equity accounted investees		14.2			73				(262	)			9,172
Proceeds from the sale of emission allowances		7			826				12,508				—
Purchase of emission allowances		7			(826	)			(8,298	)			—
Purchase of property, machinery and equipment		16			(3,397	)			(2,529	)			(2,045	)
Non-current leases with related parties					(625	)			—				—
					(3,949	)			1,419				7,127
FINANCING ACTIVITIES
Issuances of subordinated notes		22.3			—				19,786				—
Coupons paid on subordinated notes		22.1			(1,096	)			(268	)			—
Non-current related parties, net		19.1			925				(995	)			(35	)
Derivative financial instruments		18.4			684				(841	)			270
Proceeds from new debt instruments		18.1			39,947				84,333				138,921
Debt repayments		18.1			(47,113	)			(119,222	)			(119,600	)
Other financial obligations, net		18.2			(853	)			(1,318	)			(10,718	)
Shares repurchase program		22.1			(2,296	)			—				(1,894	)
Shares in trust for future deliveries under share-based compensation		22.4			(733	)			—				—
Non-current leases paid to related parties					57				—				—
Other financial expenses paid in cash		18.1			(250	)			(280	)			(274	)
Net cash flows (used in) provided by financing activities					(10,728	)			(18,805	)			6,670
Increase (decrease) in cash and cash equivalents					(1,904	)			(1,253	)			1,129
Cash and cash equivalents at beginning of period					4,556				5,809				4,680
CASH AND CASH EQUIVALENTS AT END OF PERIOD		9		$	2,652				4,556				5,809
Changes in working capital, excluding income taxes:
Trade accounts receivable, net		10		$	(571	)			517				(323	)
Other accounts receivable		11			(48	)			(313	)			(54	)
Inventories		12			(354	)			3,007				(303	)
Current related parties, net		19.1			8,160				9,758				(15,481	)
Trade payables					(199	)			(3,648	)			1,774
Other current liabilities		17			2,590				976				199
Changes in working capital, excluding income taxes				$	9,578				10,297				(14,188	)

The accompanying notes are part of these Parent Company-only financial statements.

 

4

CEMEX, S.A.B. de C.V. (PARENT COMPANY-ONLY)

Statements of Changes in Stockholders’ Equity

For the years ended December 31, 2022, 2021 and 2020

(Millions of Pesos)

 

		Notes		Common stock				Additional paid-in capital				Other equity Reserves and subordinated notes				Retained earnings				Total stockholders’ equity
Balance as of December 31, 2019				$	4,172				141,925				1,534				28,705				176,336
Comprehensive income (loss), net					—				—				18,161				(32,562	)			(14,401	)
Restitution of retained earnings		22.1			—				(37,639	)			—				37,639				—
Share–based compensation		22.1			—				—				563				—				563
Own shares purchased under share repurchase program		22.1			(5	)			(986	)			(903	)			—				(1,894	)
Balance as of December 31, 2020				$	4,167				103,300				19,355				33,782				160,604
Comprehensive income (loss), net					—				—				4,936				15,184				20,120
Issuance of subordinated notes		22.3			—				—				19,786				—				19,786
Coupons paid on subordinated notes		22.3			—				—				(604	)			—				(604	)
Share–based compensation		22.4			—				—				1,553				—				1,553
Own shares purchased under share repurchase program		22.1			(3	)			(1,892	)			1,895				—				—
Balance as of December 31, 2021				$	4,164				101,408				46,921				48,966				201,459
Comprehensive income (loss), net					—				—				(10,123	)			17,341				7,218
Coupons paid on subordinated notes		22.3			—				—				(1,079	)			—				(1,079	)
Share–based compensation		22.4			—				—				895				—				895
Transfer of employees’ rights and obligations		2, 20			—				—				(691	)			—				(691	)
Shares in trust for future deliveries under share-based compensation		22.4			—				—				(733	)			—				(733	)
Own shares purchased under share repurchase program		22.1			—				—				(2,296	)			—				(2,296	)
Balance as of December 31, 2022				$	4,164				101,408				32,894				66,307				204,773

The accompanying notes are part of these Parent Company-only financial statements.

 

5

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

1)	DESCRIPTION OF BUSINESS

CEMEX, S.A.B. de C.V., originated in 1906, is a publicly traded variable stock corporation (sociedad anónima bursátil de capital variable) organized under the laws of the United Mexican States, or Mexico, and is the parent company of entities whose main activities are oriented to the construction industry, through the production, marketing, sale and distribution of cement, ready-mix concrete, aggregates and other construction materials and services, including urbanization solutions. In addition, CEMEX, S.A.B. de C.V. performs significant business and operational activities in Mexico.

The shares of CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange (“MSE”) as Ordinary Participation Certificates (“CPOs”) (Certificados de Participación Ordinaria) under the symbol “CEMEXCPO.” Each CPO represents two series “A” shares and one series “B” share of common stock of CEMEX, S.A.B. de C.V. In addition, CEMEX, S.A.B. de C.V.’s shares are listed on the New York Stock Exchange (“NYSE”) as American Depositary Shares (“ADSs”) under the symbol “CX.” Each ADS represents ten CPOs.

The terms “CEMEX, S.A.B. de C.V.” and/or the “Parent Company” used in these accompanying notes to the financial statements refer to CEMEX, S.A.B. de C.V. without its consolidated subsidiaries. The terms the “Company” or “CEMEX” refer to CEMEX, S.A.B. de C.V. together with its consolidated subsidiaries.

The issuance of these financial statements was authorized by CEMEX, S.A.B. de C.V.´s management on February 16, 2023. These financial statements will be submitted for approval to the Annual General Ordinary Shareholders’ Meeting of CEMEX, S.A.B. de C.V. on March 23, 2023.

 

2)	RELEVANT EVENT DURING THE PERIOD AND AS OF THE ISSUANCE DATE OF THE FINANCIAL STATEMENTS

On January 1, 2022, a group of employees of CEMEX Operaciones México, S.A. de C.V., a subsidiary of CEMEX, S.A.B. de C.V., was transferred to the Parent Company. Concerning such transfer, CEMEX, S.A.B. de C.V. acquired the rights and obligations related to the employees; additionally, CEMEX, S.A.B. de C.V. acquired certain assets necessary for the functions of such employees.

Corporate reorganization

On August 1, 2021, CEMEX, S.A.B. de C.V., formalized a corporate reorganization of some operational activities in Mexico (“corporate reorganization”) pursuant to which CEMEX, S.A.B. de C.V. transferred certain activities related to the production of cement, ready-mix concrete, and aggregates to its subsidiaries CEMEX Operaciones México, S.A. de C.V. and CEMEX Concretos, S.A. de C.V. CEMEX, S.A.B. de C.V. in conjunction with its subsidiaries CEMEX Concretos, S.A. de C.V. and Proveedora Mexicana de Materiales, S.A. de C.V., continues to carry out activities related to the commercialization, promotion, and sale of cement and ready-mix concrete products to customers. In addition, on August 1, 2021, CEMEX Operaciones México, S.A. de C.V., entered into an agreement contract to supply CEMEX, S.A.B. de C.V. of the products, which it will commercialize following the corporate restructuring. CEMEX, S.A.B. de C.V., recognized assets and liabilities transfer at their book value as it is a transaction between common control entities. CEMEX, S.A.B. de C.V. accounted for any difference between the price and the book value in stockholders’ equity (note 14.1).

 

3)	SIGNIFICANT ACCOUNTING POLICIES

 

3.1)	BASIS OF PRESENTATION AND DISCLOSURE

CEMEX, S.A.B. de C.V.’s financial statements as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020, were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Separate financial statements

The parent company-only financial statements of CEMEX, S.A.B. de C.V. presented herein constitute the separate financial statements of a parent company as defined by International Accounting Standard 27 - Separate Financial Statements (“IAS 27”). Separate Financial Statements reflect the Parent Company’s unconsolidated financial position, financial performance, cash flows and changes in stockholders’ equity as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020. The consolidated financial statements of CEMEX, S.A.B. de C.V. and its subsidiaries were issued separately.

Presentation currency and definition of terms

During the reported periods, the presentation currency of the financial statements was the Mexican Peso. When reference is made to Pesos or “$” it means Mexican Pesos, except when specific reference is made to a different currency. The amounts in the financial statements and the accompanying notes are stated in millions, except when references are made to earnings per share and/or prices per share. When reference is made to “US$” or “Dollars,” it means Dollars of the United States of America (“United States”). When reference is made to “€” or “Euros,” it means the currency in circulation in a significant number of European Union (“EU”) countries. When reference is made to “£” or “Pounds,” it means British Pounds sterling. Previously reported Peso amounts of prior years are not restated unless the transactions in other currencies are still outstanding, in which case those are restated using the closing exchange rates as of the reporting date. Amounts reported in Pesos should not be construed as representations that such amounts, represent those Pesos or Dollars or could be converted into Pesos or Dollars at the rate indicated. As of December 31, 2022 and 2021, translations of Pesos into Dollars and Dollars into Pesos, were determined for statement of financial position amounts using the closing exchange rate of $19.50 and $20.50, respectively, and for statements of operations amounts, using the average exchange rates of $20.03, $20.43 and $21.58 Pesos per Dollar for 2022, 2021 and 2020, respectively. When the amounts between parentheses are the Peso and the Dollar, the amounts were determined by translating the Euro amount into Dollars using the closing exchange rates at year-end and then translating the Dollars into Pesos as previously described.

 

6

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Statements of operations

CEMEX, S.A.B. de C.V. includes the line item titled “Operating earnings before other income (expenses), net” considering that it is subtotal relevant for the determination of CEMEX’s “Operating EBITDA” (Operating earnings before other income (expenses), net plus depreciation and amortization) as described below in this note. The line item “Other income (expenses), net” consists primarily of revenues and expenses not directly related to CEMEX, S.A.B. de C.V.’s main activities or which are of a non-recurring nature, including impairment losses of long-lived assets, non-recurring sales of emission allowances, results on disposal of assets and restructuring costs, among others (note 7). Under IFRS, the inclusion of certain subtotals such as “Operating earnings before other income (expenses), net” and the display of the statement of operations vary significantly by industry and company according to specific needs.

Considering that it is a relevant measure used by management to review operating performance and for decision-making purposes, as well as an indicator used by CEMEX, S.A.B. de C.V.’s creditors of its ability to internally fund capital expenditures and to measure its ability to service or incur debt under financing agreements, for purposes of note 18, CEMEX, S.A.B. de C.V. presents “Operating EBITDA” (operating earnings before other income (expenses), net, plus depreciation and amortization). Operating EBITDA is not a measure of financial performance, an alternative to cash flows, or a measure of liquidity under IFRS. Moreover, Operating EBITDA may not be comparable to other similarly titled measures of other companies.

Statements of cash flows

During 2021, except for the cash and cash equivalents received and disclosed in the statements of cash flows, the effects of the corporate reorganization as described in note 14.1, did not represent sources or uses of cash in the operating, investing or financing activities. In addition, the statements of cash flows exclude the following transactions that did not represent sources or uses of cash:

Financing activities:

 

•

In 2022, 2021 and 2020, the increases in other financing obligations in connection with lease contracts negotiated during those years for $746, $438 and $723, respectively (note 18.2).

Investing activities:

 

•

In 2022, 2021 and 2020, in connection with the leases negotiated during the year, the increases in assets for the right-of-use related to lease contracts for $746 (US$38), $438 (US$21) and $723 (US$36), respectively (note 16.2).

Newly issued IFRS adopted in the reported periods

Beginning January 1, 2022, CEMEX, S.A.B. de C.V. adopted prospectively IFRS amendments that did not result in any material impact on its results or financial position, and which are explained as follows:

 

Standard		Main topic
Amendment to IAS 37, Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts—Cost of Fulfilling a Contract		Clarifies that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract.’ Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts.
Amendments to IAS 16, Property, Plant and Equipment –Proceeds before Intended Use		Clarifies the standard to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Annual improvements (2018-2020 cycle): IFRS 1, First-time Adoption of IFRS – Subsidiary as a First-time Adopter		The amendment permits a subsidiary to measure cumulative translation differences using the amounts reported by its parent, based on the parent’s date of transition to IFRSs.
Annual improvements (2018-2020 cycle): IFRS 9, Financial Instruments – Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities		The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in assessing whether to derecognize a financial liability. An entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf.
Amendments to IFRS 3, Business Combinations – Reference to the conceptual framework		Update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations.

 

3.2)	USE OF ESTIMATES AND CRITICAL ASSUMPTIONS

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. These assumptions are reviewed on an ongoing basis using available information. Actual results could differ from these estimates. The items subject to significant estimates and assumptions by management include impairment tests of long-lived assets, recognition of deferred income tax assets and uncertain tax positions, the measurement of financial instruments at fair value, the assets and liabilities related to employee benefits, legal proceedings and provisions regarding assets retirements obligations and environmental liabilities. Significant judgment is required by management to appropriately assess the amounts of these concepts.

 

7

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

3.3)	FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are recorded in the functional currency at the exchange rates prevailing on the dates of their execution. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the statement of financial position date, and the resulting foreign exchange fluctuations are recognized in earnings, except for exchange fluctuations arising from: 1) foreign currency indebtedness associated with the acquisition of foreign entities; and 2) fluctuations associated with related parties’ balances denominated in foreign currency, whose settlement is neither planned nor likely to occur in the foreseeable future and as a result, such balances are of a permanent investment nature. These fluctuations are recorded against “Other equity reserves,” as part of the foreign currency translation adjustment (note 3.12) until the disposal of the foreign net investment, at which time, the accumulated amount is recognized through the statement of operations as part of the gain or loss on disposal.

The financial statements of foreign subsidiaries, as determined using their respective functional currency, are translated to U.S. Dollars and then to Pesos at the closing exchange rate for the statement of financial position and at the closing exchange rates of each month within the period for the statement of operations. The functional currency is that in which each consolidated entity primarily generates and expends cash. The corresponding translation effect is included within “Other equity reserves” and is presented in the statement of other comprehensive income for the period as part of the foreign currency translation adjustment (note 3.12) until the disposal of the net investment in the foreign subsidiary.

Considering its integrated activities, for purposes of functional currency, CEMEX, S.A.B. de C.V. is considered to have two divisions, one related with its financial and holding company activities, in which the functional currency is the Dollar for all assets, liabilities and transactions associated with these activities, and another division related with the CEMEX, S.A.B. de C.V.’s operating activities in Mexico, in which the functional currency is the Peso for all assets, liabilities and transactions associated with these activities.

The most significant closing exchange rates for the statement of financial position and the approximate average exchange rates (as determined using the closing exchange rates of each month within the period) for the statement of operations in respect to the primary functional currencies to the Peso as of December 31, 2022, 2021 and 2020, were as follows:

 

		2022								2021								2020
Currency		Closing				Average				Closing				Average				Closing				Average
Dollar			19.50				20.03				20.50				20.43				19.89				21.58
Euros			0.9344				0.9522				0.8789				0.8467				24.3065				24.6985
British Pound Sterling			0.8266				0.8139				0.7395				0.7262				27.1981				27.8121

 

3.4)	CASH AND CASH EQUIVALENTS (note 9)

The balance in this caption is comprised of available amounts of cash and cash equivalents, mainly represented by highly liquid short-term investments, which are readily convertible into known amounts of cash, and which are not subject to significant risks of changes in their values, including overnight investments, which yield fixed returns and have maturities of less than three months from the investment date. These fixed-income investments are recorded at cost plus accrued interest. Accrued interest is included in the statement of operations as part of “Financial income and other items, net.”

When applicable, the amount of cash and cash equivalents in the statement of financial position includes restricted cash and investments to the extent that any restriction will be lifted in less than three months from the reporting date, comprised of deposits in margin accounts that guarantee certain obligations, except when contracts contain provisions for net settlement, in which case, these restricted amounts of cash and cash equivalents are offset against the liabilities that CEMEX, S.A.B. de C.V. has with its counterparties. When the restriction period is greater than three months, any restricted balance of cash and investments is not considered cash equivalents and is included within short-term or long-term “Other accounts receivable,” as appropriate.

 

3.5)	FINANCIAL INSTRUMENTS

Classification and measurement of financial instruments

The financial assets that meet both of the following conditions and are not designated as at fair value through profit or loss: a) are held within a business model whose objective is to hold assets to collect contractual cash flows, and b) its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are classified as “Held to collect” and measured at amortized cost. Amortized cost represents the Net Present Value (“NPV”) of the consideration receivable or payable as of the transaction date. This classification of financial assets comprises the following captions:

 

•

Cash and cash equivalents (notes 3.4 and 9).

 

•

Trade receivables, other current accounts receivable and other current assets (notes 10, 11 and 13). Due to their short-term nature, CEMEX, S.A.B. de C.V. initially recognizes these assets at the original invoiced or transaction amount less expected credit losses, as explained below.

 

•

Trade receivables sold under securitization programs, in which certain residual interest and continued involvement in the trade receivables sold is maintained in the case of failure to collect, do not qualify for derecognition and are maintained in the statement of financial position (notes 10 and 18.2).

 

•

Investments and non-current accounts receivable (note 15). Subsequent changes in effects from amortized cost are recognized in statement of operations as part of “Financial income and other items, net.”

 

8

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Classification and measurement of financial instruments - continued

Certain strategic investments are measured at fair value through other comprehensive income within “Other equity reserves” (notes 3.12 and 15). CEMEX, S.A.B. de C.V. does not maintain financial assets “Held to collect and sell” whose business model has the objective of collecting contractual cash flows and then selling those financial assets.

The financial assets that are not classified as “Held to collect” or that do not have strategic characteristics fall into the residual category of held at fair value through the statement of operations as part of “Financial income and other items, net,” (notes 8.2 and 15).

Debt instruments and other financial obligations are classified as “Loans” and measured at amortized cost (notes 18.1 and 18.2). Interest accrued on financial instruments is recognized within “Other current liabilities” against financial expense. During the reported periods, CEMEX, S.A.B. de C.V. did not have financial liabilities voluntarily recognized at fair value or associated with fair value hedge strategies with derivative financial instruments.

Derivative financial instruments are recognized as assets or liabilities in the statement of financial position at their estimated fair values, and the changes in such fair values are recognized in the statement of operations within “Financial income and other items, net” for the period in which they occur, except in the case of hedging instruments as described below (notes 8.2 and 18.4).

Impairment of financial assets

Impairment losses of financial assets, including trade accounts receivable, are recognized using the Expected Credit Loss model (“ECL”) for the entire lifetime of such financial assets on initial recognition, and at each subsequent reporting period, even in the absence of a credit event or if a loss has not yet been incurred, considering for their measurement past events and current conditions, as well as reasonable and supportable forecasts affecting collectability. For purposes of the ECL model of trade accounts receivable, CEMEX, S.A.B. de C.V. segments its accounts receivable in a matrix by type of client or homogeneous credit risk and days past due and determines for each segment an average rate of ECL, considering actual credit loss experience generally over the last 12 months and analyses of future delinquency, which is applied to the balance of the accounts receivable. The average ECL rate increases in each segment of days past due until the rate is 100% for the segment of 365 days or more past due.

Costs incurred in the issuance of debt or borrowings

Direct costs incurred in debt issuances or borrowings, as well as debt refinancing or non-substantial modifications to debt agreements that did not represent an extinguishment of debt by considering that the holders and the relevant economic terms of the new instrument are not substantially different to the replaced instrument, adjust the carrying amount of the related debt and are amortized as interest expense as part of the effective interest rate of each instrument over its maturity. These costs include commissions and professional fees. Costs incurred in the extinguishment of debt, as well as debt refinancing or modifications to debt agreements, when the new instrument is substantially different from the old instrument according to a qualitative and quantitative analysis, are recognized in the statement of operations as incurred.

Leases (notes 3.8, 16 and 18.2)

At the inception of a contract, CEMEX, S.A.B. de C.V. assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if at inception of the contract, conveys the right to control the use of an identified asset for a period in exchange for consideration, based on IFRS 16, Leases (“IFRS 16”). to assess whether a contract conveys the right to control the use of an identified asset.

Pursuant to IFRS 16, leases are recognized as financial liabilities against assets for the right-of-use, measured at their commencement date as the net present value (“NPV”) of the future contractual fixed payments, using the interest rate implicit in the lease or, if that rate cannot be readily determined, CEMEX, S.A.B. de C.V.’s incremental borrowing rate. CEMEX, S.A.B. de C.V. determines its incremental borrowing rate by obtaining interest rates from its external financing sources and makes certain adjustments to reflect the term of the lease, the type of the asset leased and the economic environment in which the asset is leased.

CEMEX, S.A.B. de C.V. does not separate the non-lease component from the lease component included in the same contract. Lease payments included in the measurement of the lease liability comprise contractual rental fixed payments, less incentives, fixed payments of non-lease components and the value of a purchase option, to the extent that option is highly probable to be exercised or is considered a bargain purchase option. Interest incurred under the financial obligations related to lease contracts is recognized as part of the “Financial expense” line item in the statement of operations.

At commencement date or upon modification of a contract that contains a lease component, CEMEX, S.A.B. de C.V. allocates the consideration in the contract to each lease component based on their relative stand-alone prices. CEMEX, S.A.B. de C.V. applies the recognition exception for lease terms of 12 months or less and contracts of low-value assets and recognizes the lease payment of these leases as rental expense in the statement of operations over the lease term. CEMEX, S.A.B. de C.V. defined the lease contracts related to office and computer equipment as low-value assets.

The lease liability is measured at amortized cost using the effective interest method as payments are incurred and is remeasured when: a) there is a change in future lease payments arising from a change in an index or rate, b) if there is a change in the amount expected to be payable under a residual guarantee, c) if the Parent Company changes its assessment of whether it will exercise a purchase, extension or termination option, or d) if there is a revised in-substance fixed lease payment. When the lease liability is remeasured, an adjustment is made to the carrying amount of the asset for the right-of-use or is recognized within “Financial income and other items, net” if such asset has been reduced to zero.

 

9

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Hedging instruments (note 18.4)

A hedging relationship is established to the extent the entity considers, based on the analysis of the overall characteristics of the hedging and hedged items, that the hedge will be highly effective in the future and the hedge relationship at inception is aligned with the entity’s reported risk management strategy (note 18.4). The accounting categories of hedging instruments are: a) cash flow hedge, b) fair value hedge of an asset or forecasted transaction, and c) hedge of a net investment in a subsidiary.

In cash flow hedges, the effective portion of changes in fair value of derivative instruments are recognized in stockholders’ equity within other equity reserves and are reclassified to earnings as the interest expense of the related debt is accrued, in the case of interest rate swaps, or when the underlying products are consumed in the case of contracts on the price of raw materials and commodities. In hedges of the net investment in foreign subsidiaries, changes in fair value are recognized in stockholders’ equity as part of the foreign currency translation gains and losses within other equity reserves (note 3.5), whose reversal to earnings would take place upon disposal of the foreign investment. During the reported periods, CEMEX, S.A.B. de C.V. did not have derivatives designated as fair value hedges. Derivative instruments are negotiated with institutions with significant financial capacity; therefore, CEMEX, S.A.B. de C.V. believes the risk of non-performance of the obligations agreed to by such counterparties to be minimal.

Embedded derivative financial instruments

CEMEX, S.A.B. de C.V. reviews its contracts to identify the existence of embedded derivatives. Identified embedded derivatives are analyzed to determine if they need to be separated from the host contract and recognized in the statement of financial position as assets or liabilities, applying the same valuation rules used for other derivative instruments.

Put options granted for the purchase of non-controlling interests

Under IFRS 9, represent agreements by means of which a non-controlling interest has the right to sell, at a future date using a predefined price formula or at fair market value, its shares in a consolidated subsidiary. When the obligation should be settled in cash or through the delivery of another financial asset, an entity should recognize a liability for the NPV of the redemption amount as of the reporting date against the controlling interest within stockholders’ equity. A liability is not recognized under these agreements when the redemption amount is determined at fair market value at the exercise date and the entity has the election to settle using its own shares. As of December 31, 2022 and 2021, CEMEX, S.A.B. de C.V. did not have written put options.

Fair value measurements (note 18.3)

Under IFRS, fair value represents an “Exit Value” which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, considering the counterparty’s credit risk in the valuation. The concept of Exit Value is premised on the existence of a market and market participants for the specific asset or liability. When there are no market and/or market participants willing to make a market, IFRS establishes a fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are as follows:

 

•

Level 1.- represent quoted prices (unadjusted) in active markets for identical assets or liabilities that CEMEX, S.A.B. de C.V. can access at the measurement date. A quote price in an active market provides the most reliable evidence of fair value and is used without adjustment to measure fair value whenever available.

 

•

Level 2.- are inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly, and are used mainly to determine the fair value of securities, investments or loans that are not actively traded. Level 2 inputs included equity prices, certain interest rates and yield curves, implied volatility and credit spreads, among others, as well as inputs extrapolated from other observable inputs. In the absence of Level 1 inputs, CEMEX, S.A.B. de C.V. determined fair values by iteration of the applicable Level 2 inputs, the number of securities and/or the other relevant terms of the contract, as applicable.

 

•

Level 3.- inputs are unobservable inputs for the asset or liability. CEMEX, S.A.B. de C.V. used unobservable inputs to determine fair values, to the extent there are no Level 1 or Level 2 inputs, in valuation models such as Black-Scholes, binomial, discounted cash flows or multiples of Operating EBITDA, including risk assumptions consistent with what market participants would use to arrive at fair value.

 

3.6)	INVENTORIES (note 12)

Inventories are valued using the lower of cost or net realizable value. The cost of inventories is based on weighted average cost formula and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. CEMEX, S.A.B. de C.V. analyzes its inventory balances to determine if, because of internal events, such as physical damage, or external events, such as technological changes or market conditions, certain portions of such balances have become obsolete or impaired. When an impairment situation arises, the inventory balance is adjusted to its net realizable value. In such cases, these adjustments are recognized against the results of the period. Advances to suppliers of inventory are presented as part of other current assets.

 

10

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Inventories - continued

In connection with the corporate reorganization (notes 2 and 14.1), commencing August 2021, CEMEX, S.A.B. de C.V., purchases its merchandise in a form of ready for sale. In connection with purchasing merchandise ready to be sold, CEMEX, S.A.B. de C.V., acquires such merchandise mainly with related parties (note 19). CEMEX, S.A.B. de C.V. reports its inventories at the acquisition cost.

 

3.7)	EQUITY ACCOUNTED INVESTEES (note 14.2)

Investments in controlled entities and in entities over which CEMEX, S.A.B. de C.V. exercises significant influence, which are not classified as available for sale, are measured using the equity method.

 

3.8)	PROPERTY, MACHINERY AND EQUIPMENT AND RIGHT OF USE (note 16)

Property, machinery and equipment are recognized at their acquisition or construction cost, as applicable, less accumulated depreciation and accumulated impairment losses. Depreciation of property, machinery and equipment is recognized as part of cost and operating expenses (notes 5 and 6) and is calculated using the straight-line method over the estimated useful lives of the assets, except for mineral reserves, which are depleted using the units-of-production method. As of December 31, 2022, the average useful lives by category of property, machinery and equipment, which are reviewed at each reporting date and adjusted if appropriate, were as follows:

 

		Years
Administrative and industrial buildings			35
Machinery and equipment in plant			25
Ready-mix trucks and motor vehicles			10
Office equipment and other assets			5

Assets for the right-of-use related to leases are initially measured at cost, comprised by the initial amount of the lease liability adjusted by any payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle, remove or restore the underlying asset, less any lease incentives received. The asset for the right-of-use is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlaying asset to CEMEX, S.A.B. de C.V. by the end of the lease term or if the cost of the asset for the right-of-use reflects that CEMEX, S.A.B. de C.V. will exercise a purchase option. In that case the asset for the right-of-use would be depreciated over the useful life of the underlying asset, on the same basis as those of property, machinery and equipment. In addition, assets for the right-of-use may be reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

CEMEX, S.A.B. de C.V. capitalizes, as part of the related cost of property, machinery and equipment, interest expense from existing debt during the construction or installation period of significant property, machinery and equipment, considering CEMEX, S.A.B. de C.V.’s corporate average interest rate and the average balance of investments in process for the period.

All waste removal costs or stripping costs incurred in the pre-operative phase of a quarry are recognized as part of its carrying amount. The capitalized amounts are amortized over the expected useful life of exposed ore body based on the units of production method.

Costs incurred in respect of operating fixed assets that result in future economic benefits, such as an extension in their useful lives, an increase in their production capacity or in safety, as well as those costs incurred to mitigate or prevent environmental damage, are capitalized as part of the carrying amount of the related assets. The capitalized costs are depreciated over the remaining useful lives of such fixed assets. Periodic maintenance of fixed assets is expensed as incurred. Advances to suppliers of fixed assets are presented as part of other non-current accounts receivable.

 

3.9)	IMPAIRMENT OF LONG-LIVED ASSETS (notes 15 and 16)

Property, machinery and equipment, assets for the right-of-use and other investments

These assets are tested for impairment upon the occurrence of internal or external indicators of impairment, such as changes in CEMEX, S.A.B. de C.V.’s operating business model or in technology that affect the asset, or expectations of lower operating results, to determine whether their carrying amounts may not be recovered. An impairment loss is recorded in the statement of operations for the period within “Other income (expenses), net” for the excess of the asset’s carrying amount over its recoverable amount, corresponding to the higher of the fair value less costs to sell the asset, as generally determined by an external appraiser, and the asset’s value in use, the latter represented by the NPV of estimated cash flows related to the use and eventual disposal of the asset. The main assumptions utilized to develop estimates of NPV are a discount rate that reflects the risk of the cash flows associated with the assets and the estimations of generation of future income. Those assumptions are evaluated for reasonableness by comparing such discount rates to available market information and by comparing to third-party expectations of industry growth, such as governmental agencies or industry chambers.

 

11

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Property, machinery and equipment, assets for the right-of-use and other investments – continued

When impairment indicators exist, for each intangible asset, CEMEX, S.A.B. de C.V. determines its projected revenue streams over the estimated useful life of the asset. To obtain discounted cash flows attributable to each intangible asset, such revenue is adjusted for operating expenses, changes in working capital and other expenditures, as applicable, and discounted to NPV using the risk adjusted discount rate of return. The most significant economic assumptions are: a) the useful life of the asset; b) the risk adjusted discount rate of return; c) royalty rates; and d) growth rates. Assumptions used for these cash flows are consistent with internal forecasts and industry practices. The fair values of these assets are significantly sensitive to changes in such relevant assumptions. Certain key assumptions are more subjective than others. In respect of trademarks, CEMEX, S.A.B. de C.V. considers that the most subjective key assumption is the royalty rate. In respect of extraction rights and customer relationships, the most subjective assumptions are revenue growth rates and estimated useful lives. CEMEX, S.A.B. de C.V. validates its assumptions through benchmarking with industry practices and the corroboration of third-party valuation advisors. Significant judgment by management is required to appropriately assess the fair values and values in use of the related assets, as well as to determine the appropriate valuation method and select the significant economic assumptions.

Equity accounted investees

Equity accounted investees are tested for impairment when required due to significant adverse changes, by determining the recoverable amount of such investment, which consists of the higher of the investment in subsidiaries and associates’ fair value, less cost to sell and value in use, represented by the discounted amount of estimated future cash flows to be generated to which those net assets relate. CEMEX, S.A.B. de C.V. initially determines its discounted cash flows over periods of 5 to 10 years, depending on the economic cycle. If the value in use of the equity accounted investees is lower than its corresponding carrying amount, the Parent Company determines the fair value of its investment using methodologies generally accepted in the market to determine the value of entities, such as multiples of Operating EBITDA and by reference to other market transactions. An impairment loss is recognized within “Other income (expenses), net”, if the recoverable amount is lower than the net book value of the investment.

 

3.10)

PROVISIONS (note 17)

CEMEX, S.A.B. de C.V. recognizes provisions when it has a legal or constructive obligation resulting from past events, whose resolution would require cash outflows, or the delivery of other resources owned by the Parent Company. As of December 31, 2022 and 2021, some significant proceedings that gave rise to a portion of the carrying amount of CEMEX, S.A.B. de C.V.’s other current and non-current liabilities and provisions are detailed in note 23.

Considering guidance under IFRS, CEMEX, S.A.B. de C.V. recognizes provisions for levies imposed by governments when the obligating event or the activity that triggers the payment of the levy has occurred, as defined in the legislation.

Contingencies and commitments (notes 23 and 24)

Obligations or losses related to contingencies are recognized as liabilities in the statement of financial position only when present obligations exist resulting from past events that are probable to result in an outflow of resources and the amount can be measured reliably. Otherwise, a qualitative disclosure is included in the notes to the financial statements. The effects of long-term commitments established with third parties, such as supply contracts with suppliers or customers, are recognized in the financial statements on an incurred or accrued basis, after taking into consideration the substance of the agreements. Relevant commitments are disclosed in the notes to the financial statements. CEMEX, S.A.B. de C.V. recognizes contingent revenues, income or assets only when their realization is virtually certain.

 

3.11)

PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS (note 20)

Defined contribution pension plans

The costs of defined contribution pension plans are recognized in the operating results as they are incurred. Liabilities arising from such plans are settled through cash transfers to the employees’ retirement accounts, without generating future obligations.

Defined benefit pension plans and other post-employment benefits

The costs associated with employees’ benefits for defined benefit pension plans and other post-employment benefits, generally comprised of health care benefits, life insurance and seniority premiums, granted by CEMEX, S.A.B de C.V and/or pursuant to applicable law, are recognized as services are rendered by the employees based on actuarial estimations of the benefits’ present value considering the advice of external actuaries. For certain pension plans, CEMEX, S.A.B de C.V has created irrevocable trust funds to cover future benefit payments (“plan assets”). These plan assets are valued at their estimated fair value at the statement of financial position date. The actuarial assumptions and accounting policy consider: a) the use of nominal rates; b) a single rate is used for the determination of the expected return on plan assets and the discount of the benefits obligation to present value; c) a net interest is recognized on the net defined benefit liability (liability minus plan assets); and d) all actuarial gains and losses for the period, related to differences between the projected and real actuarial assumptions at the end of the period, as well as the difference between the expected and real return on plan assets, are recognized as part of “Other items of comprehensive income, net” within stockholders’ equity.

 

12

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Property, machinery and equipment, assets for the right-of-use and other investments – continued

The service cost, corresponding to the increase in the obligation for additional benefits earned by employees during the period, is recognized within operating costs and expenses. The net interest cost, resulting from the increase in obligations for changes in NPV and the change during the period in the estimated fair value of plan assets, is recognized within “Financial income and other items, net.”

The effects from modifications to the pension plans that affect the cost of past services are recognized within operating costs and expenses over the period in which such modifications become effective to the employees or without delay if changes are effective immediately. Likewise, the effects from curtailments and/or settlements of obligations occurring during the period, associated with events that significantly reduce the cost of future services and/or significantly reduce the population subject to pension benefits, respectively, are recognized within operating costs and expenses.

Termination benefits

Termination benefits, not associated with a restructuring event, which mainly represent severance payments by law, are recognized in the operating results for the period in which they are incurred.

 

3.12)

INCOME TAXES (note 21)

The effects reflected in the statement of operations for income taxes include the amounts incurred during the period and the amounts of deferred income taxes, determined according to the income tax law applicable, reflecting uncertainty in income tax treatments, if any. Deferred income taxes represent the addition of the amounts determined by applying the enacted statutory income tax rate to the total temporary differences resulting from comparing the book and taxable values of assets and liabilities, considering tax assets such as loss carryforwards and other recoverable taxes, to the extent that it is probable that future taxable profits will be available against which they can be utilized. The measurement of deferred income taxes at the reporting period reflects the tax consequences that follow the way in which CEMEX, S.A.B. de C.V. expects to recover or settle the carrying amount of its assets and liabilities. Deferred income taxes for the period represent the difference between balances of deferred income taxes at the beginning and the end of the period. According to IFRS, all items charged or credited directly in stockholders’ equity or as part of other comprehensive income or loss for the period are recognized net of their current and deferred income tax effects. The effect of a change in enacted statutory tax rates is recognized in the period in which the change is officially enacted.

Deferred tax assets are reviewed at each reporting date and are derecognized when it is not deemed probable that the related tax benefit will be realized, considering the aggregate amount of self-determined tax loss carryforwards that CEMEX, S.A.B. de C.V. believes will not be rejected by the tax authorities based on available evidence and the likelihood of recovering them prior to their expiration through an analysis of estimated future taxable income. If it is probable that the tax authorities would reject a self-determined deferred tax asset, CEMEX, S.A.B. de C.V. would derecognize such asset. When it is considered that a deferred tax asset will not be recovered before its expiration, CEMEX, S.A.B. de C.V. would not recognize such deferred tax asset. Both situations would result in additional income tax expense for the period in which such determination is made. To determine whether it is probable that deferred tax assets will ultimately be recovered, CEMEX, S.A.B. de C.V. takes into consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, expansion plans, projected taxable income, carryforward periods, current tax structure, potential changes or adjustments in tax structure, tax planning strategies, future reversals of existing temporary differences. Likewise, CEMEX, S.A.B. de C.V. analyzes its actual results versus the Parent Company’s estimates, and adjusts, as necessary, its tax asset valuations. If actual results vary from CEMEX, S.A.B. de C.V.’s estimates, the deferred tax asset and/or valuations may be affected, and necessary adjustments will be made based on relevant information in CEMEX, S.A.B. de C.V.’s statement of operations for such period.

Based on IFRIC 23, Uncertainty over income tax treatments (“IFRIC 23”), the income tax effects from an uncertain tax position are recognized when it is probable that the position will be sustained based on its technical merits and assuming that the tax authorities will examine each position and have full knowledge of all relevant information. For each position probability is considered individually, regardless of its relationship to any other broader tax settlement. The probability threshold represents a positive assertion by management that CEMEX, S.A.B. de C.V. is entitled to the economic benefits of a tax position. If a tax position is considered not probable of being sustained, no benefits of the position are recognized. Interest and penalties related to unrecognized tax benefits are recorded as part of the income tax in the statements of operations.

The effective income tax rate is determined dividing the line item “Income tax” by the line item “Net income before income tax.” This effective tax rate is further reconciled to CEMEX, S.A.B. de C.V.’s statutory tax rate applicable in Mexico (note 21).

 

3.13)

STOCKHOLDERS’ EQUITY

Common stock and additional paid-in capital (note 22.1)

These items represent the value of stockholders’ contributions, and include increases related to the capitalization of retained earnings and the recognition of executive compensation programs in CEMEX, S.A.B. de C.V.’s CPOs as well as decreases associated with the restitution of retained earnings.

 

13

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Other equity reserves and subordinated notes (note 22.3)

Groups the cumulative effects of items and transactions that are, temporarily or permanently, recognized directly to stockholders’ equity, and includes the comprehensive income, which reflects certain changes in stockholders’ equity that do not result from investments by owners and distributions to owners.

Beginning in June 2021, this line item includes the balance of subordinated notes with no fixed maturity issued by CEMEX, S.A.B. de C.V. Considering that CEMEX, S.A.B. de C.V.’s subordinated notes have no fixed maturity date, there is no contractual obligation for CEMEX, S.A.B. de C.V. to deliver cash or any other financial assets, the payment of principal and interest may be deferred indefinitely at the sole discretion of CEMEX, S.A.B. de C.V. and specific redemption events are fully under CEMEX, S.A.B. de C.V.’s control, under applicable IFRS, these subordinated notes issued by CEMEX, S.A.B. de C.V. qualify as equity instruments and are classified within controlling interest stockholders’ equity.

The most significant items within “Other equity reserves and subordinated notes” during the reported periods are as follows:

Items of “Other equity reserves and subordinated notes” included within other comprehensive income (loss):

 

•

The effective portion of the valuation and liquidation effects from derivative instruments under cash flow hedging relationships, which are recorded temporarily in stockholders’ equity (note 3.5);

 

•

Changes in fair value of other investments in strategic securities (note 3.5); and

 

•

Current and deferred income taxes during the period arising from items whose effects are directly recognized in stockholders’ equity.

Items of “Other equity reserves and subordinated notes” not included in comprehensive income (loss):

 

•

Effects attributable to controlling stockholders’ equity for financial instruments issued by consolidated subsidiaries that qualify for accounting purposes as equity instruments, such as the interest expense paid on perpetual debentures;

 

•

The balance of subordinated notes with no fixed maturity and any interest accrued thereof; and

 

•

The cancellation of CEMEX, S.A.B. de C.V.’s shares held by consolidated entities.

Retained earnings (note 22.2)

Retained earnings represent the cumulative net results of prior years, net of: a) dividends declared; b) capitalization of retained earnings; c) restitution of retained earnings when applicable; and d) cumulative effects from adoption of new IFRS.

 

3.14)

REVENUE RECOGNITION (note 4)

Revenue is recognized at a point in time or over time in the amount of the price, before tax on sales, expected to be received for goods and services supplied because of ordinary activities, as contractual performance obligations are fulfilled, and control of goods and services passes to the customer. Revenues are decreased by any trade discounts or volume rebates granted to customers. Variable consideration is recognized when it is highly probable that a significant reversal in the amount of cumulative revenue recognized for the contract will not occur and is measured using the expected value or the most likely amount method, whichever is expected to better predict the amount based on the terms and conditions of the contract.

Revenue and costs from trading activities, in which CEMEX, S.A.B. de C.V. acquires finished goods from a third party and subsequently sells the goods to another third-party, are recognized on a gross basis, considering that CEMEX, S.A.B. de C.V. assumes ownership risks on the goods purchased, not acting as agent or broker.

Commencing August 2021, in connection with the corporate reorganization (notes 2 and 14.1), CEMEX, S.A.B. de C.V., recognizes revenue from operating leases of some of its property, machinery, and equipment to CEMEX Operaciones México, S.A. de C.V., and CEMEX Concretos, S.A. de C.V. subsidiaries of the Parent Company.

When revenue is earned over time as contractual performance obligations are satisfied, which is the case of construction contracts, CEMEX, S.A.B. de C.V. applies the stage of completion method to measure revenue, which represents: a) the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs; b) the surveys of work performed; or c) the physical proportion of the contract work completed; whichever better reflects the percentage of completion under the specific circumstances. Revenue related to such construction contracts is recognized in the period in which the work is performed by reference to the contract’s stage of completion at the end of the period, considering that the following have been defined: a) each party’s enforceable rights regarding the asset under construction; b) the consideration to be exchanged; c) the manner and terms of settlement; d) actual costs incurred and contract costs required to complete the asset are effectively controlled; and e) it is probable that the economic benefits associated with the contract will flow to the entity.

Progress payments and advances received from customers do not reflect the work performed and are recognized as short-term or long-term advanced payments, as appropriate.

 

14

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

3.15)

COST OF SALES AND OPERATING EXPENSES (notes 5 and 6)

Cost of sales represents the production cost of inventories at the moment of sale. Such cost of sales includes depreciation, amortization and depletion of assets involved in production, expenses related to storage in production plants and freight expenses of raw material in plants and delivery expenses of CEMEX, S.A.B. de C.V.’s ready-mix concrete business. Commencing August 2021, in connection with the corporate reorganization (notes 2 and 14.1), CEMEX, S.A.B. de C.V.’ cost of sales represents the acquisition cost of the products of the merchandising for CEMEX, S.A.B. de C.V. during the period.

Administrative expenses represent the expenses associated with personnel, services and equipment, including depreciation and amortization, related to managerial activities and back office for the Parent Company’s management. Sales expenses represent the expenses associated with personnel, services and equipment, including depreciation and amortization, involved specifically in sales activities. Distribution and logistics expenses refer to expenses of storage at points of sales, including depreciation and amortization, as well as freight expenses of finished products between plants and points of sale and freight expenses between points of sales and the customers’ facilities.

 

3.16)

CONCENTRATION OF BUSINESS AND CREDIT

CEMEX, S.A.B. de C.V. sells its products primarily to distributors in the construction industry, with no specific geographic concentration within the countries in which CEMEX, S.A.B. de C.V. operates. As of and for the years ended December 31, 2022, 2021 and 2020, no single customer individually accounted for a significant portion of the reported amounts of sales or in the balances of trade receivables. In addition, there is no significant concentration of a specific supplier relating to the purchase of raw materials.

 

3.17)

NEWLY ISSUED IFRS NOT YET ADOPTED

There are several amendments or new IFRS issued but not yet effective which are under analysis by the Parent Company’s management and expected to be adopted on their specific effective dates. The Parent Company’s management has preliminarily determined that these amendments and new IFRS, summarized as follows, will have no significant effect on the Parent Company’s financial position or operating results:

 

Standard		Main topic		Effective date
Amendments to IAS 1, Presentation of Financial Statements– Classification of Liabilities as Current or Non-current		Clarifies the requirements to be applied in classifying liabilities as current and non- current.		January 1, 2023
Amendments to IAS 8,Definition of Accounting Estimates		The amendment makes a distinction between how an entity should present and disclose different types of accounting changes in its financial statements. Changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.		January 1, 2023
Amendments to IAS 1 and IFRS Practice Statement 2,Disclosure of Accounting Policies		The amendment requires entities to disclose their material accounting policies rather than their significant accounting policies. To support this amendment the Board has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2 Making Materiality Judgements to accounting policy disclosures.		January 1, 2023
Amendments to IAS 12, Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction		The amendment clarifies that companies should account for deferred tax assets and liabilities on transactions such as leases and decommissioning obligations. CEMEX has always applied these criteria.		January 1, 2023
IFRS 17, Insurance Contracts		The new Standard establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts and supersedes IFRS 4, Insurance contracts. The Standard outlines a General Model, which is modified for insurance contracts with direct participation features, described as the Variable Fee Approach. The General Model is simplified if certain criteria are met by measuring the liability for remaining coverage using the Premium Allocation Approach.		January 1, 2023
Amendments to IFRS 16, Leases – Lease Liability in a Sale and Leaseback		The amendments mentioned that on initial recognition, the seller-lessee would include variable payments when it measures a lease liability arising from a sale-and-leaseback transaction. In addition, the amendments established that the seller-lessee could not recognize gains or losses relating to the right of use it retains after initial recognition.		January 1, 2024

 

15

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

4)

REVENUES

CEMEX, S.A.B. de C.V.’s revenues are mainly originated from the sale and distribution of cement, ready-mix concrete, aggregates and other construction materials and services, including urbanization solutions. CEMEX, S.A.B. de C.V. grants credit for terms ranging from 15 to 90 days depending on the type and risk profile of each customer. For the years ended December 31, 2022, 2021 and 2020, revenues are as follows:

 

		2022				2021				2020
From the sale of goods related to principal activities		$	78,293				71,341				58,572
From the sale of other goods and services 1 (notes 2 and 14.1)			1,219				6,385				266
		$	79,512				77,726				58,838

In addition to revenues from sales, distribution and services related to the construction, the revenues from CEMEX, S.A.B. de C.V. activities as of December 31, 2022, 2021 and 2020, included the following:

 

		2022				2021				2020
Rental income 2		$	6,165				1,429				61
License fees and administrative services			3,189				834				711
		$	9,354				2,263				772

 

1	For the year ended December 31, 2021, includes $3,521 in relation to the sale of inventory related to the corporate reorganization (note 2 and 14.1).

2	For the years ended December 31, 2022 and 2021, includes $5,787 and $1,118, respectively, in relation to operating leases related to the corporate reorganization (notes 2, 14.1 and 16.2).

Under IFRS 15, certain promotions and/or discounts and rebates offered as part of the sale transaction, result in a portion of the transaction price being allocated to such commercial incentives as separate performance obligations, recognized as contract liabilities with customers, and deferred to the statement of operations during the period in which the incentive is exercised by the customer or until it expires.

For the years ended December 31, 2022, 2021 and 2020 changes in the balance of contract liabilities with customers are as follows:

 

		2022				2021				2020
Opening balance of contract liabilities with customers		$	364				359				292
Increase during the period for new transactions			1,643				1,121				918
Decrease during the period for exercise or expiration of incentives			(1,602	)			(1,116	)			(851	)
Closing balance of contract liabilities with customers		$	405				364				359

For the years 2022, 2021 and 2020, CEMEX, S.A.B. de C.V. did not identify any costs required to be capitalized as contract fulfilment assets and released over the contract life according to IFRS 15, Revenues from contracts with customers.

 

5)	COST OF SALES

The detail of CEMEX, S.A.B. de C.V.’s cost of sales by nature for the years 2022, 2021 and 2020 is as follows:

 

		2022				2021				2020
Raw materials and goods for sale (notes 2 and 14.1)		$	48,463				46,876				20,595
Payroll			880				2,252				2,311
Electricity, fuels and other services (notes 2 and 14.1)			3,822				2,821				5,224
Maintenance, repairs and supplies (notes 2 and 14.1)			222				1,609				2,293
Transportation costs			749				830				919
Depreciation and amortization			1,794				206				2,065
Changes in inventory			(8	)			(6,944	)			(10,446	)
Other production costs			3,155				4,230				5,140
		$	59,077				51,880				28,101

CEMEX, S.A.B. de C.V., commencing August 1, 2021, is dedicated to marketing, selling, and distributing cement and ready-mix concrete. The cost of sales recognized until that date before the reorganization was $19,552 (notes 2 and 14.1).

 

16

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

6)	OPERATING EXPENSES

CEMEX, S.A.B. de C.V.’s operating expenses during 2022, 2021 and 2020 by function were as follows:

 

		2022				2021				2020
Administrative expenses (notes 2 and 14.1)		$	5,824				3,134				8,397
Selling expenses			2,016				1,726				1,747
Total administrative and selling expenses			7,840				4,860				10,144
Distribution and logistics expenses			10,200				8,997				8,880
Total operating expenses		$	18,040				13,857				19,024

The decrease in operating expenses in 2021 compared to 2020, is mainly due to the corporate reorganization mentioned in notes 2 and 14.1.

CEMEX, S.A.B. de C.V.’s operating expenses during 2022, 2021 and 2020 by nature are as follows:

 

		2022				2021				2020
Transportation costs		$	8,797				3,747				9,449
Payroll			3,709				2,785				1,983
Depreciation and amortization			579				76				332
Maintenance, repairs and supplies			13				318				140
Professional legal, accounting and miscellaneous consulting services			4,371				5,677				5,351
Public services and office supplies			41				114				114
Insurances and sureties			161				88				79
Expected credit losses on trade accounts receivable			34				3				143
Rental expenses			52				730				184
Other operating expenses			283				319				1,249
		$	18,040				13,857				19,024

 

7)	OTHER INCOME (EXPENSES), NET

The detail of the line item “Other income (expenses), net” in 2022, 2021 and 2020 was as follows:

 

		2022				2021				2020
Results from the sale of assets		$	1				50				(6	)
Incremental costs and expenses related to the COVID-19 Pandemic			—				(78	)			(602	)
Restructuring costs 1			(341	)			—				—
Provision related to electricity charges 2			(667	)			—				—
Results from the sale of emission allowances			—				4,210				—
Miscellaneous fees and others			86				105				(106	)
		$	(921	)			4,287				(714	)

 

1	Restructuring costs mainly refer to extraordinary expenses related to the transfer of personnel from CEMEX Operaciones Mexico S.A de C.V, as mentioned in note 2 and severance payments and the definite closing of operating sites.

2	Refers to a provision recognized in 2022 as a result of a change in legislation that would require an additional payment in relation to electricity charges.

During the year ended December 31, 2021, CEMEX, S.A.B. de C.V. received proceeds of $12,508 from the sale of emission allowances, resulting in a gain recognized in other income (expenses), net of $4,210. These emission allowances represent certificates issued by the member states of the European Union, which grant the holder a right to emit a controlled amount of carbon dioxide during a specific period. CEMEX, S.A.B. de C.V. recognizes these certificates at their acquisition cost.

 

8)	FINANCIAL ITEMS

 

8.1)	FINANCIAL EXPENSE

Financial expense in 2022, 2021 and 2020 includes $120, $167 and $219 of interest expense from financial obligations related to lease contracts (notes 16.2 and 18.2).

 

17

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

8.2)	FINANCIAL INCOME AND OTHER ITEMS, NET

For the years ended December 31, 2022, 2021 and 2020, the detail of “Financial income and other items, net” was as follows:

 

		2022				2021				2020
Financial income		$	2,648				5,188				4,121
Results from financial instruments, net (notes 15 and 18.4)			(103	)			(104	)			(355	)
		$	2,545				5,084				3,766

 

9)	CASH AND CASH EQUIVALENTS

As of December 31, 2022 and 2021, cash and cash equivalents include cash and bank accounts of $2,652 and $4,556, respectively.

 

10)	TRADE ACCOUNTS RECEIVABLE, NET

As of December 31, 2022 and 2021, trade accounts receivable, net consisted of:

 

		2022				2021
Trade accounts receivable		$	4,517				3,927
Allowances for expected credit losses			(274	)			(255	)
		$	4,243				3,672

As of December 31, 2022 and 2021, balances include receivables of $2,331 (US$120) and $2,023 (US$99), respectively, sold under outstanding securitization programs and/or factoring programs with recourse established in Mexico, in which CEMEX, S.A.B. de C.V., effectively surrenders control associated with the trade accounts receivable sold and there is no guarantee or obligation to reacquire the assets; nonetheless, in such programs, CEMEX, S.A.B. de C.V., retains certain residual interest in the programs and/or maintains continuing involvement with the accounts receivable. Therefore, the receivables sold were not removed from the statement of financial position and the amounts funded to CEMEX, S.A.B. de C.V. of $1,782 in both years, were recognized within the line item “Other financial obligations”. Receivables qualifying for sale exclude amounts over certain days past due or concentrations over certain limits by customer, according to the terms of the programs. The discount granted to the acquirers of the trade receivables is recorded as financial expense and amounted to $189 (US$10) in 2022, $123 (US$6) in 2021 and $133 (US$7) in 2020. CEMEX, S.A.B. de C.V.’s securitization programs are usually negotiated for periods of one to two years and are usually renewed at their maturity.

Allowances for doubtful accounts are determined and recognized upon origination of the trade accounts receivable based on an Expected Credit Loss (“ECL”). For the years ended December 31, 2022, 2021 and 2020, the ECL on accounts receivable was $34, $3 and $143, respectively, which was recognized as part of operating expense. Under this ECL model, CEMEX, S.A.B. de C.V. segments its accounts receivable in a matrix by type of client or homogeneous credit risk and days past due and determines for each segment an average rate of ECL, considering actual credit loss experience over the last 24 months and analyses of future delinquency, which is applied to the balance of the accounts receivable. Changes for the expected credit losses in 2022, 2021 and 2020, were as follows:

 

		2022				2021				2020
Allowances for expected credit losses at beginning of period		$	255				432				319
Charged to selling expenses			33				3				143
Deductions			(14	)			(180	)			(30	)
Allowances for expected credit losses at end of period		$	274				255				432

As of December 31, 2022, in relation to the COVID-19 Pandemic and the potential increase in expected credit losses on trade accounts receivable associated with the remaining negative economic effects, CEMEX, S.A.B. de C.V. maintains continuous communication with its customers as part of its collection management, in order to anticipate situations that could represent an extension in the portfolio’s recovery period or in some cases the risk of non-recovery. As of this same date, CEMEX, S.A.B. de C.V. considers that these negative effects do not yet have a significant impact on the estimates of expected credit losses and will continue to monitor the development of relevant events that may eventually have effect because of a deepening or extension of the COVID-19 Pandemic.

 

11)	OTHER ACCOUNTS RECEIVABLE

As of December 31, 2022 and 2021, the caption other accounts receivable, included the following:

 

		2022				2021
Other refundable taxes		$	140				114
Derivative financial instruments (note 18.4)			583				775
Non-trade accounts receivable 1			785				571
		$	1,508				1,460

 

1	Non-trade accounts receivable are mainly attributable to the sale of assets.

 

18

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

12)	INVENTORIES

As of December 31, 2022 and 2021, the balances of inventories was summarized as follows:

 

		2022				2021
Finished goods		$	906				563
Materials and spare parts			212				62
Inventory in transit			3				142
		$	1,121				767

For the years ended December 31, 2022 and 2021, CEMEX, S.A.B. de C.V., recognized in the statement of operations, inventory obsolescence of $9 and $9, respectively.

 

13)	OTHER CURRENT ASSETS

As of December 31, 2022 and 2021, other current assets consisted of:

 

		2022				2021
Advance payments		$	294				226
Investment available for sale			237				204
		$	531				430

 

14)	CORPORATE REORGANIZATION AND EQUITY ACCOUNTED INVESTEES

 

14.1)

CORPORATE REORGANIZATION

As mentioned in note 2, as of August 1, 2021, CEMEX, S.A.B. de C.V., transferred certain activities related to the production of cement, ready-mix concrete, and aggregates to its subsidiaries CEMEX Operaciones México, S.A. de C.V. and CEMEX Concretos, S.A. de C.V. In addition, during 2022 and 2021, CEMEX, S.A.B. de C.V. entered into various transactions with CEMEX Operaciones México, S.A. de C.V. and CEMEX Concretos, S.A. de C.V. consisting in the sale of inventories, fixed assets and leases.

As mentioned in note 2, CEMEX, S.A.B. de C.V., recognized assets and liabilities transfers at their book value. CEMEX, S.A.B. de C.V. accounted for any of such differences in stockholders’ equity. The most significant effects in the financial statements of CEMEX, S.A.B. de C.V. for the years ended December 31, 2022 and 2021, are as follows:

 

		2022				2021
Sale of inventories (note 12)		$	—				3,521
Sale of property, machinery and equipment, net (note 16)			407				59
Leasing account receivables (note 19)			71				1,743
Other liabilities and employee benefits transferred (notes 17 and 20)			722				273

 

14.2)

EQUITY ACCOUNTED INVESTEES

As of December 31, 2022 and 2021 equity accounted investees, include the following:

 

		Activity				Country				%				2022				2021
CEMEX Trademarks Holding Ltd.			Holding				Switzerland				99.6			$	55,003				83,220
CEMEX Operaciones México, S.A. de C.V			Administrative services				Mexico				99.9				276,710				253,256
CAMCEM, S.A. de C.V.			Cement				Mexico				40.1				5,990				5,342
Other companies			—				—				—				17,826				20,607
														$	355,529				362,425
Out of which:
Acquisition cost														$	467,978				468,051
Equity method recognition														$	(112,449	)			(105,626	)

On April 12, 2022, CEMEX, S.A.B. de C.V. acquired 98.0% % of the capital stock of Alliera S.A. de C.V. for $0.05. In addition, CEMEX, S.A.B. de C.V. received on May 18, 2022, a dividend of $80 from CAMCEM, S.A. de C.V, reducing the investment in the associate.

On December 17, 2021, CEMEX, S.A.B. de C.V. acquired through its subsidiary Transenergy, Inc. 20% of its investment in Terminales Portuarias del Pacífico, S.A.P.I. de C.V. for an amount of $168 (US$8). In addition, on December 10, 2021, CEMEX, S.A.B. de C.V. acquired 99.99% of the capital stock of Broquers Ambiental, S.A. de C.V. for $195 (US$9).

 

19

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

Equity accounted investees - continued

 

On January 13, 2020, CEMEX Internacional, S.A. de C.V., one of CEMEX, S.A.B. de C.V.’s subsidiaries, decreed to grant dividends to its shareholders for an amount of $2,670 to be distributed among the 187.25 million shares, corresponding to a dividend of $14.25901 Pesos per share. CEMEX, S.A.B. de C.V. owns 99.99% of the shares of CEMEX Internacional, S.A. de C.V. In addition, CEMEX, S.A.B. de C.V. received on December 21, 2020, a dividend of $6,494 from its subsidiary CEMEX Operaciones México, S.A. de C.V.

The combined condensed financial information presented below, refers only to CAMCEM and other minor equity accounted investees in which CEMEX, S.A.B. de C.V., possess significant influence. For information regarding the financial position and statement of operations of CEMEX’s subsidiaries, reference is made to the consolidated financial statements of CEMEX.

Combined condensed statement of financial position information of CEMEX, S.A.B. de C.V.’s equity accounted investees as of December 31, 2022 and 2021 is set forth below:

 

		2022				2021
Current assets		$	22,196				21,603
Non-current assets			26,683				28,246
Total assets			48,879				49,849
Current liabilities			5,077				7,829
Non-current liabilities			14,637				13,440
Total liabilities			19,714				21,269
Total net assets		$	29,165				28,580

Combined selected information of the statement of operations of CEMEX, S.A.B. de C.V.’s equity accounted investees in 2022, 2021 and 2020 is set forth below:

 

		2022				2021				2020
Revenues		$	23,870				19,972				20,297
Operating earnings			5,442				4,591				4,537
Income before income tax			3,282				2,548				2,077
Net income			1,937				1,448				1,401

 

15)	OTHER INVESTMENTS AND NON-CURRENT ACCOUNTS RECEIVABLE

As of December 31, 2022 and 2021, other investments and non-current accounts receivable included the following:

 

		2022				2021
Investments at fair value with changes recognized through the statement of operations		$	121				132
Non-current portion of valuation of derivative financial instruments (note 18.4)			1,103				495
Investments in strategic equity securities			81				230
Extraction rights			109				109
Other non-current investments			351				424
		$	1,765				1,390

 

16)	PROPERTY, MACHINERY AND EQUIPMENT, NET AND ASSETS FOR THE RIGHT-OF-USE, NET

As of December 31, 2022 and 2021, property, machinery and equipment, net and assets for the right-of-use, net were summarized as follows:

 

		2022				2021
Property, machinery and equipment, net		$	50,215				48,644
Assets for the right-of-use, net			1,184				1,020
		$	51,399				49,664

 

20

CEMEX, S.A.B. DE C.V.

Notes to the Parent Company-only Financial Statements

As of December 31, 2022, 2021 and 2020

(Millions of Mexican Pesos)

 

16.1)

PROPERTY, MACHINERY AND EQUIPMENT, NET

As of December 31, 2022 and 2021, the property, machinery and equipment, net balances and changes for the period for such caption, are as following:

 

		2022
		Land and quarries				Building				Machinery and equipment				Investments in Progress 1				Total
Cost at beginning of period		$	16,116				8,597				35,528				10,806				71,047
Accumulated depreciation			(1,193	)			(3,080	)			(18,130	)			—				(22,403	)
Net book value at beginning of period			14,923				5,517				17,398				10,806				48,644
Capital expenditures			60				175				2,817				4,118				7,170
Disposals and reclassifications 2			(112	)			(4	)			(615	)			(3,043	)			(3,774	)
Depreciation and depletion for the period			(160	)			(272	)			(1,605	)			—				(2,037	)
Foreign currency translation effects			170				42				—				—				212
Cost at end of period			16,234				8,810				37,730				11,881				74,655
Accumulated depreciation			(1,353	)			(3,352	)			(19,735	)			—				(24,440	)
Net book value at end of period		$	14,881				5,458				17,995				11,881				50,215
		2021
		Land and quarries				Building				Machinery and equipment				Investments in Progress 1				Total
Cost at beginning of period		$	14,785				8,070				34,261				9,537				66,653
Accumulated depreciation			(1,050	)			(2,756	)			(16,576	)			—				(20,382	)
Net book value at beginning of period			13,735				5,314				17,685				9,537				46,271
Capital expenditures			39				160				1,574				3,031				4,804
Disposals and reclassifications 2			(200	)			(6	)			(307	)			(1,762	)			(2,275	)
Depreciation and depletion for the period			(143	)			(324	)			(1,554	)			—				(2,021	)
Foreign currency translation effects			1,492				373				—				—				1,865
Cost at end of period			16,116				8,597				35,528				10,806				71,047
Accumulated depreciation			(1,193	)			(3,080	)			(18,130	)			—				(22,403	)
Net book value at end of period		$	14,923				5,517				17,398				10,806				48,644

 

1

As of December 31, 2022, and 2021, includes costs related to the construction of the kiln #2 in the Tepeaca cement plant in the Mexican state of Puebla for $8,351 and $7,976, respectively. The construction of this kiln is intended to increase installed capacity of the plant to 4 million tons per year.

2	In connection with the disposals, during 2022 and 2021, CEMEX, S.A.B. de C.V. sold some assets to related parties for an amount of $407 and $59, respectively, related to the corporate reorganization (notes 2 and 14.1).

In connection with the corporate reorganization described in notes 2 and 14.1, CEMEX, S.A.B. de C.V. leased some of its property, machinery, and equipment to CEMEX Operaciones México, S.A. de C.V., and CEMEX Concretos, S.A. de C.V. to achieve the transfer of the production processes. According to IFRS 16, these leases qualify as an operating lease from the lessor’s accounting. CEMEX, S.A.B. de C.V., kept its assets on the balance sheet as an owned asset and recognizes depreciation expense over the asset’s useful life. For the year ended December 31, 2022 and for the period of August 1, 2021, to December 31, 2021, CEMEX, S.A.B. de C.V., recognized revenues for these leases for $5,787 and $1,118, respectively.

 

16.2)

ASSETS FOR THE RIGHT-OF-USE, NET

As of December 31, 2022 and 2021, consolidated assets for the right-of-use, net and the changes in this caption, were as follows:

 

		2022
		Land and quarries				Buildings				Machinery and equipment				Others				Total
Assets for the right-of-use at beginning of period		$	124				281				2,173				131				2,709
Accumulated depreciation and depletion			(15	)			(142	)			(1,460	)			(72	)			(1,689	)
Net book value at beginning of period			109				139				713				59				1,020
Additions			78				120				408				140				746
Cancellations and remeasurements			3				—				(249	)			—				(246	)
Depreciation and depletion for the period			(74	)			(40	)			(198	)			(24	)			(336	)
Assets for the right-of-use at end of period			205				401				2,332				271				3,209
Accumulated depreciation and depletion			(89	)			(182	)			(1,658	)			(96	)			(2,025	)
Net book value at end of period		$	116				219				674				175				1,184

 

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