Cemex 2009 Annual Report Download - page 24

CPOs were sold in Mexico. The ADSs were offered to the
public at a price of US$12.50 per ADS, and the CPOs were
offered to the public at a price of MXN16.65 per CPO.
The estimated net aggregate proceeds from the global
offering, including proceeds from the exercise of the over-
allotment option, were approximately US$1.8 billion.


On September 4, 2009, CEMEX stockholders approved
a resolution to increase the variable portion of its capital
stock by up to 4.8 billion shares (equivalent to 1.6 billion
CPOs or 160 million ADSs). This increase in capital could
be accomplished through a public offering of common
stock or through the issuance of convertible bonds. This
issuance was required to be completed within a period
of 24 months.


On August 14, 2009, CEMEX announced that it completed
its previously announced refinancing of the majority of the
company’s outstanding debt. The new financing agree-
ment extended the maturities of approximately US$15
billion in syndicated and bilateral obligations with approxi-
mately 75 banks and private placement note holders, pro-
viding for a semi-annual amortization schedule, with a final
maturity of February 14, 2014. Final documentation was
signed, and all conditions precedent were satisfied in full.

CEMEX uses derivative financial instruments such as inter-
est rate and currency swaps, currency and equity-forward
contracts, options, and futures, among others, to change
the risk profile associated with changes in interest rates
and foreign exchange rates of debt agreements; reduce
financing costs; and hedge highly probable forecasted
transactions, net assets in foreign subsidiaries, and
CEMEX’s stock-option plans.
Under Mexican FRS (Financial Reporting Standards), we
recognize all derivative financial instruments on the balance
sheet as assets or liabilities, at their estimated fair market
value, with changes in such fair values recorded on the
income statement, except for changes in the fair value of
derivative instruments designated, and that are effective, as
hedges of the variability in the cash flows associated with
existing assets or liabilities and/or forecasted transactions.
These effects are initially recognized in stockholders’ equity
and subsequently reclassified to earnings as the effects of
the underlying hedged instruments or transactions impact
the income statement. As required in the context of our
renegotiation with our major lenders prior to entering into
the financing agreement, during the first half of 2009, we
closed a significant portion of our derivative instruments.
Therefore, as of December 31, 2009, our remaining deriva-
tive financial instruments consisted of equity forward con-
tracts, a forward instrument over the Total Return Index (TRI)
of the Mexican Stock Exchange, and interest-rate derivatives
related to energy projects. Arising from the fair market value
recognition of its derivatives portfolio as of December 31,
2009, CEMEX has recognized increases in assets and liabili-
ties, which resulted in a net asset of US$3 million, including
deposited cash collateral of US$195 million. The notional
amounts of derivatives substantially match the amounts
of underlying assets, liabilities, or equity transactions into
which the derivatives are being entered.
Notional amounts
Equity derivatives 969
Interest-rate derivatives 202
Millions of US dollars as of December 31, 2009
DIVIDENDS
US dollars per ADS
l US DOLLARS
l EUROS
l MEXICAN PESOS
l OTHER
60
27
12
1
CURRENCY DENOMINATION OF DEBT
percentage as of fourth quarter 2009
22
99 00 01 02 03 04 05 06 07 08
n.a.*
0.83
0.90
0.60
0.61
0.51
0.52
0.51
0.49
0.40
*During 2008, a recapitalization of
retained earnings was approved.
For more information, read note 13
on page 13.