building a STRONGER foundation - Cemex

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14. EMPLOYEE BENEFITS Defined contribution plans CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES Notes to the Consolidated Financial Statements – (Continued) As of December 31, 2010, 2009 and 2008 (Millions of Mexican pesos) The costs of defined contribution plans for the years ended December 31, 2010, 2009 and 2008 were approximately Ps550, Ps479 and Ps708, respectively. Defined benefit plans For the years ended December 31, 2010, 2009 and 2008, the net periodic cost for pension plans, other postretirement benefits and termination benefits are summarized as follows: Pensions Other benefits 1 Total Net period cost: 2010 2009 2008 2010 2009 2008 2010 2009 2008 Service cost............................................................... Ps 273 295 399 107 115 124 380 410 523 Interest cost............................................................... 1,825 1,834 1,706 125 134 117 1,950 1,968 1,823 Actuarial return on plan assets .................................. Amortization of prior service cost, transition (1,310) (1,382) (1,614) (2) (1) (2) (1,312) (1,383) (1,616) liability and actuarial results ................................. 443 327 138 74 156 121 517 483 259 Loss (gain) for settlements and curtailments............. (7) 68 33 (52) (38) (15) (59) 30 18 Ps 1,224 1,142 662 252 366 345 1,476 1,508 1,007 1 Includes the net periodic cost of termination benefits. The reconciliations of the actuarial benefits obligations, pension plan assets, and liabilities recognized in the balance sheet as of December 31, 2010 and 2009 are presented as follows: Pensions Other benefits Total 2010 2009 2010 2009 2010 2009 Change in benefits obligation: Projected benefit obligation at beginning of year.........................Ps 33,334 28,709 1,946 1,834 35,280 30,543 Service cost .................................................................................. 273 295 107 115 380 410 Interest cost .................................................................................. 1,825 1,834 125 134 1,950 1,968 Actuarial results............................................................................ 1,602 3,685 120 227 1,722 3,912 Employee contributions................................................................ 58 73 – – 58 73 Changes for acquisitions (disposals) ............................................ 7 250 1 (6) 8 244 Foreign currency translation and inflation effects ........................ (2,652) 520 (78) (11) (2,730) 509 Settlements and curtailments........................................................ (10) (295) (27) (65) (37) (360) Benefits paid................................................................................. (1,885) (1,737) (166) (282) (2,051) (2,019) Projected benefit obligation at end of year ................................... Change in plan assets: 32,552 33,334 2,028 1,946 34,580 35,280 Fair value of plan assets at beginning of year............................... 21,659 19,760 22 19 21,681 19,779 Return on plan assets.................................................................... 1,716 2,550 1 3 1,717 2,553 Foreign currency translation and inflation effects ........................ (1,723) 451 – – (1,723) 451 Additions through business combinations.................................... (19) 202 – – (19) 202 Employer contributions ................................................................ 583 659 166 306 749 965 Employee contributions................................................................ 58 73 – – 58 73 Settlements and curtailments........................................................ (1) (295) – (25) (1) (320) Benefits paid................................................................................. (1,885) (1,741) (166) (281) (2,051) (2,022) Fair value of plan assets at end of year......................................... Amounts recognized in the balance sheets: 20,388 21,659 23 22 20,411 21,681 Funded status................................................................................ 12,164 11,675 2,005 1,924 14,169 13,599 Transition liability ....................................................................... (40) (46) (77) (149) (117) (195) Prior service cost and actuarial results.......................................... (6,471) (6,090) 2 144 (6,469) (5,946) Net projected liability recognized.................................................Ps 5,653 5,539 1,930 1,919 7,583 7,458 F-42
CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES Notes to the Consolidated Financial Statements – (Continued) As of December 31, 2010, 2009 and 2008 (Millions of Mexican pesos) As of December 31, 2010 and 2009, the projected benefit obligation is derived from the following types of plans and benefits: F-43 2010 2009 Plans and benefits totally unfunded.................................................................................................. Ps 2,772 2,611 Plans and benefits partially or totally funded ................................................................................... 31,808 32,669 Projected benefit obligation at end of the period.............................................................................. Ps 34,580 35,280 Based on MFRS D-3, prior services and actuarial results related to pension plans and other postretirement benefits are amortized during the estimated remaining years of service of the employees subject to these benefits. As of December 31, 2010, the approximate average years of service for pension plans is 10.8 years and 15.5 years for other postretirement benefits. As mentioned in note 2M, MFRS D-3 requires amortizing the transition liability, prior services and actuarial results accumulated as of December 31, 2007 under the previous MFRS D-3 related to pensions, other postretirement benefits and termination benefits, over a maximum period of five years. MFRS D-3 establishes that termination benefits generated after its adoption are recognized in the results of the period in which they are generated. The net periodic cost in 2010, 2009 and 2008 included the transition amortization established by MFRS D-3. As of December 31, 2010 and 2009, plan assets were measured at their estimated fair value at year end and consisted of: 2010 2009 Fixed-income securities Cash.................................................................................................................................................Ps 708 1,286 Investments in corporate bonds ....................................................................................................... 8,481 5,632 Investments in government bonds ................................................................................................... 2,916 6,685 Variable-income securities 12,105 13,603 Investment in marketable securities................................................................................................. 5,026 5,731 Other investments and private funds................................................................................................ 3,280 2,347 8,306 8,078 Ps 20,411 21,681 As of December 31, 2010, estimated future benefit payments for pensions and other postretirement benefits during the next ten years were as follows: 2010 2011..................................................................................................................................................................................Ps 1,908 2012.................................................................................................................................................................................. 1,912 2013.................................................................................................................................................................................. 1,868 2014.................................................................................................................................................................................. 1,895 2015.................................................................................................................................................................................. 1,896 2016 – 2020...................................................................................................................................................................... 10,046 The most significant assumptions used in the determination of the net periodic cost were as follows: Mexico United States 2010 2009 United Kingdom Other countries 1 Mexico United States United Kingdom Other countries 1 Discount rates ................................ 8.5% 5.5% 5.7% 4.0% - 8.9% 9.0% 6.2% 6.0% 4.7% - 9.0% Rate of return on plan assets.......... 9.0% 7.5% 6.5% 3.8% - 9.0% 9.0% 8.0% 6.7% 3.0% - 9.0% Rate of salary increases ................. 4.5% 3.0% 3.6% 2.0% - 6.0% 5.5% 3.5% 3.0% 2.3% - 5.5% 1 Range of rates.
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CEMEX 2010 20F REPORT building a ST
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Securities registered or to be regi
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Qualitative and Quantitative Market
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INTRODUCTION CEMEX, S.A.B. de C.V.
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As a result of the foregoing transa
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In the U.S., the recession was long
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The Financing Agreement contains ev
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The Financing Agreement restricts u
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During 2009, we reduced the aggrega
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The instruments governing our debt
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On the legislative front, during th
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Our operations in South America, Ce
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the depositary to vote the CPOs und
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Beginning in 2008, MFRS B-10 has el
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(1) Cost of sales includes deprecia
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Item 4 - Information on the Company
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As a condition to closing the RMC a
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Provide our customers with the best
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In connection with the implementati
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In 2010, as a result of our efforts
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In addition, we are one of the worl
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(2) Our cement raw materials operat
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Our Corporate Structure We are a ho
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Cement in Mexico is sold principall
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Aggregates. Our aggregates operatio
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Beginning on June 30, 2008, Ready M
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Products and Distribution Channels
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On December 26, 2008, we sold our C
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Ready-Mix Concrete. Our ready-mix c
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Aggregates. In 2010, we reduced fix
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Our Operating Network in France Des
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In April 2006, we initiated an expa
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Our Operating Network in Colombia P
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Our Operations in Nicaragua Overvie
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Our Operations in the United Arab E
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Our Trading Operations In 2010, we
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On December 10, 2010, after receivi
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To prevent, control and remediate e
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As required by the directive, each
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For the 2010 fiscal year, CEMEX wil
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Separately, the government of Venez
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and CEMEX was required by August 11
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January 1, 2008, however, under MFR
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foreign subsidiaries. These instrum
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Valuation reserves on accounts rece
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Stage 1. Communication to the organ
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Year Ended December 31, 2010 Compar
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Geographic Segment 89 Variations in
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United Kingdom Our domestic cement
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ended December 31, 2010, Africa and
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Operating Income. For the reasons m
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Our comprehensive financing result
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The following tables present select
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Mexico Our domestic cement sales vo
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As a result of the decreases in dom
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For the year ended December 31, 200
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South America, Central America and
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On August 14, 2009, we entered into
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As of December 31, 2010, we had U.S
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Our Perpetual Debentures As of Dece
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The Financing Agreement, as amended
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In 1999, CEMEX entered into an agre
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Our Equity Derivative Forward Contr
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As of December 31, 2009 and 2010, C
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In addition, we have entered into f
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Private Cash Tender Offer to Holder
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Name, Position (Age) Experience Jai
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Name, Position (Age) Experience Ram
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Tomás Milmo Santos (46) Has been a
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Set forth below are the names of th
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Consolidated ESOP Information Stock
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Item 7 - Major Shareholders and Rel
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The following table sets forth the
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Item 10 - Additional Information Ar
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exempt from registration pursuant t
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Our board of directors shall prepar
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Under our by-laws, shareholders rep
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On June 2, 2008, CEMEX, through one
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Exchange Controls See “Item 3 —
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The gross amount of any dividends p
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We have agreed to pay some of the o
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Item 16G - Corporate Governance Sec
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Item 17 - Financial Statements Not
Page 173 and 174: 4.17 Debenture Purchase Agreement,
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Page 177 and 178: 4.41.4 Accession Letter, dated Janu
Page 179 and 180: 4.57 Amended and Restated Dealer Ma
Page 181: SIGNATURES CEMEX, S.A.B. de C.V. he
Page 184 and 185: The Board of Directors and Stockhol
Page 186 and 187: CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
Page 190 and 191: 1. DESCRIPTION OF BUSINESS CEMEX, S
Page 192 and 193: C) USE OF ESTIMATES CEMEX, S.A.B. D
Page 194 and 195: J) IMPAIRMENT OF LONG LIVED ASSETS
Page 196 and 197: Contingencies and commitments (note
Page 200 and 201: V) CONCENTRATION OF CREDIT CEMEX, S
Page 206 and 207: Net sales by product and geographic
Page 208 and 209: 4. CASH AND INVESTMENTS CEMEX, S.A.
Page 222 and 223: II. Equity forwards in third party
Page 232 and 233: 17. EXECUTIVE STOCK-BASED COMPENSAT
Page 234 and 235: 18. EARNINGS (LOSS) PER SHARE CEMEX
Page 236 and 237: D) CONTRACTUAL OBLIGATIONS CEMEX, S
Page 246 and 247: Reconciliation of stockholders’ e
Page 258 and 259: (k) Other U.S. GAAP Adjustments Def
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building a STRONGER foundation - Cemex

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