Cemex 2009 Annual Report Download - page 89

TERMS
we use
Financial Terms
American Depositary Shares (ADSs) are a means for
non-U.S.-based corporations to list their ordinary equity on
an American stock exchange. Denominated in US dollars,
they confer full rights of ownership to the corporation’s
underlying shares, which are held on deposit by a custo-
dian bank in the company’s home country or territory. In
CEMEX, each ADS represents 10 CPOs.
EBITDA is operating income plus depreciation and
amortization. Amortization of goodwill is not included in
operating income, but is instead recorded in other income
(expense) below the operating line. EBITDA does not
include certain extraordinary income and expenses that
are not included in operating income under Mexican GAAP.
EBITDA is not a GAAP measure.
Euribor (Euro Interbank Offered Rate) is the rate at
which euro interbank term deposits within the euro zone
are offered by one prime bank to another prime bank.
Expansion capital expenditures consist of expansion
spending on our cement, ready-mix concrete, and other
core businesses in existing markets.
Free cash flow equals EBITDA minus net interest ex-
pense, maintenance and expansion capital expenditures,
change in working capital, taxes paid, and other cash
items (net other expenses less proceeds from the disposal
of obsolete and/or substantially depleted operating fixed
assets that are no longer in operation and coupon pay-
ments on our perpetual notes).
Interest coverage equals EBITDA divided by financial
expenses.
LIBOR (London Interbank Offered Rate) is a daily refer-
ence rate based on the interest rates at which banks bor-
row unsecured funds from other banks in London.
Maintenance capital expenditures consist of mainte-
nance spending on our cement, ready-mix concrete, and
other core businesses in existing markets.
Net debt equals total debt minus the fair value of cross
currency swaps associated with debt, minus cash and
cash equivalents.
Net debt to EBITDA is calculated by dividing net debt by
EBITDA for the last 12 months.
Net working capital equals operating accounts receiv-
able (including other current assets received as payment in
kind) plus historical inventories minus operating payables.
Ordinary Participation Certificates (CPOs) represent
two of CEMEX’s series A shares and one of CEMEX’s
series B shares. This instrument is listed on the Mexican
Stock Exchange.
TIIE (Tasa de Interés Interbancaria de Equilibrio) is a
measure of the average cost of funds in the Mexican inter-
bank money market.
Industry Terms
Aggregates are sand and gravel, which are mined from
quarries. They give ready-mix concrete its necessary
volume and add to its overall strength. Under normal cir-
cumstances, one cubic meter of fresh concrete contains
two metric tons of gravel and sand.
Clean Development Mechanism (CDM) is a mechanism
under the Kyoto Protocol that allows Annex I countries
to recognize greenhouse gas emission reductions from
projects developed in Non-Annex I countries.
Clinker is an intermediate cement product made by sinter-
ing limestone, clay, and iron oxide in a kiln at around 1,450
degrees Celsius. One metric ton of clinker is used to make
approximately 1.1 metric tons of gray Portland cement.
Fly ash is a combustion residue from power plants that
can be used as a non-clinker cementitious material.
Gray Portland cement is a hydraulic binding agent with a
composition by weight of at least 95% clinker and 0–5%
of a minor component (usually calcium sulfate). It can set
and harden underwater and, when mixed with aggregates
and water, produces concrete or mortar.
Installed capacity is the theoretical annual production
capacity of a plant; whereas effective capacity is a plant’s
actual optimal annual production capacity, which can be
10–20% less than installed capacity.
Metric ton is the equivalent of 1.102 short tons.
Petroleum coke (petcoke) is a byproduct of the oil refin-
ing coking process.
Pozzolana is a fine, sandy volcanic ash.
Ready-mix concrete is a mixture of cement, aggregates,
and water.
Slag is the byproduct of smelting ore to purify metals.
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