Cemex 2012 Annual Report Download - page 145

Notes to the
financial
statements
145
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As of December 31, 2012 and 2011, the net monetary assets (liabilities) by currency are as follows:
Short-term: 2012 2011
Monetary assets $ 942 5,271
Monetary liabilities (24,455) (18,806)
Net monetary liabilities $ (23,513) (13,535)
Long-term:
Monetary assets 11,316 15,832
Monetary liabilities (114,521) (119,584)
Net monetary liabilities $ (103,205) (103,752)
Out of which:
Dollars (107,056) (110,390)
Pesos (19,662) (6,897)
$ (126,718) (117,287)
Equity risk
Equity risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the
market price of CEMEX S.A.B. de C.V. and/or third party’s shares. As described in note 10D, CEMEX S.A.B. de C.V. has negotiated
options that guarantee a put option transaction based on the price of CEMEX S.A.B. de C.V.s’, own CPOs. Under these equity
derivative instruments, there is a direct relationship in the change in the fair value of the derivative with the change in value of the
underlying share or index. All changes in fair value of such equity derivative instruments are recognized through the statements
of operations as part of “Other financial income, net”.
As of December 31, 2012 and 2011, the potential change in the fair value of capped call options and the guarantee on the put
option based on the price of the CPOs which would result from a hypothetical, instantaneous decrease of 10% in the market price
of the CPOs of CEMEX, S.A.B. de C.V., with all other variables held constant, would have increased the net loss of CEMEX, S.A.B.
de C.V. for 2012 and 2011, by approximately US$76 ($971) and US$24 ($332), respectively, as a result of additional negative
changes in fair value associated with such contracts.
As of December 31, 2012 and 2011, the potential change in the fair value of the embedded conversion options in the convertible
notes that would result from a hypothetical, instantaneous decrease of 10% in the market price of the CPOs of CEMEX, S.A.B. de
C.V., with all other variables held constant, would have increased the net gain of CEMEX, S.A.B. de C.V. for 2012 and 2011 by
approximately US$89 ($1,148) and US$17 ($240), respectively, as a result of additional positive changes in fair value associated
with this option.
Liquidity risk
Liquidity risk is the risk that CEMEX, S.A.B. de C.V. will not have sucient funds available to meet its obligations. CEMEX, S.A.B.
de C.V. has satisfied its operating liquidity needs primarily through the operations of its subsidiaries and expect to continue to do
so for both the short and long-term. Although cash flow from our operations has historically met the overall liquidity needs for
operations, servicing debt and funding capital expenditures and acquisitions, the operations are exposed to risks from changes
in foreign currency exchange rates, which may materially increase the net loss of CEMEX, S.A.B. de C.V. and reduce cash from
operations. Consequently, in order to meet its liquidity needs, CEMEX, S.A.B. de C.V. also relies on cost-cutting and operating
improvements to optimize capacity utilization and maximize profitability, as well as borrowing under credit facilities, proceeds of
debt and equity offerings, and proceeds from asset sales. The net cash flows provided by operating activities in 2012 and 2011,
as presented in its statements of cash flows, were approximately $6,990 and $6,356, respectively, and net cash flows used in
operating activities in 2010 were $2,564. The maturities of the contractual obligations of CEMEX S.A.B. de C.V. are included in
note 14.