Cemex 2013 Annual Report Download - page 156
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Please find page 156 of the 2013 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Notes to the financial statements
On March 30, 2010, in connection with the offering of the 2015 Convertible Notes and to effectively increase the conversion price
for CEMEX’s CPOsundersuch notes,CEMEX, S.A.B. de C.V.entered intoa cappedcall transaction,afterantidilution adjustmentsover
approximately62millionADSsmaturinginMarch2015,bymeansofwhich,atmaturityofthenotes,CEMEX,S.A.B.deC.V.expected
thatifthepriceperADSwasaboveUS$11.6236,CEMEX,S.A.B.deC.V.wouldreceiveincashthedifferencebetweenthemarketpriceof
theADSandUS$11.6236,withamaximumappreciationperADSofUS$4.4706.CEMEX,S.A.B.deC.V.paidapremiumofapproximately
US$105.OnJanuary13,2014,CEMEX,S.A.B.deC.V.initiatedamendmentstothistransaction(note16).AsofDecember31,2013and
2012,thefairvalueofsuchoptionsrepresentedanassetofapproximatelyUS$94($1,228)andUS$58($751),respectively.During2013,
2012and2011,changesinthefairvalueofthiscontractgeneratedagainofapproximatelyUS$36($465),againofapproximatelyUS$47
($594)andalossofapproximatelyUS$79($984),respectively,whichwererecognizedwithin“Othernancial(expense)income,net”inthe
statementsofoperations.Inaddition,untilDecember31,2012,consideringthatthecurrencyinwhichthenotesaredenominatedandthe
functionalcurrencyoftheissuerdiffered,CEMEX,S.A.B.deC.V.separatedtheconversionoptionembeddedinthe2015ConvertibleNotes
andrecognizeditatfairvalue,whichasofDecember31,2012,resultedinaliabilityofapproximatelyUS$64($828).Changesinfairvalue
oftheconversionoptiongeneratedalossofapproximatelyUS$56($708)in2012andagainofapproximatelyUS$97($1,211)in2011.
Asmentionedintheparagraphabove,effectiveJanuary1,2013,theconversionoptionembeddedinthe2015ConvertibleNotesceased
tobetreatedasstand-alonederivativeatfairvaluethroughthestatementofoperations.TheliabilityaccrueduntilDecember31,2012was
cancelledagainststockholders’equity.
Conversely,inconnectionwiththemandatorilyconvertiblesecurities(note10B),andconsideringtheaforementionedchangeinthefunctional
currencyofCEMEX,S.A.B.deC.V.effectiveJanuary1,2013andthatthecurrencyinwhichsuchmandatorilyconvertiblesecuritiesare
denominatedandthefunctionalcurrencyoftheissuerdiffer,CEMEX,S.A.B.deC.V.separatednowtheconversionoptionembeddedinsuch
instrumentsandrecognizesitatfairvalue,whichasofDecember31,2013,resultedinaliabilityofapproximatelyUS$39($506).Changes
infairvalueoftheconversionoptiongeneratedin2013alossofapproximatelyUS$10($135).
AsofDecember31,2012,asdescribedinnote14C,CEMEX,S.A.B.deC.V.hadgrantedaguaranteeforanotionalamountofapproximately
US$360,inconnectionwithputoptiontransactionsonCEMEX’sCPOsenteredintobyCitibankwithaMexicantrustthatCEMEXestablished
onbehalfofitsMexicanpensionfundandcertainofCEMEX’sdirectorsandcurrentandformeremployeesinApril2008,whichfairvalue
asof December31,2012,netof depositsin marginaccounts, represented aliabilityof approximatelyUS$58 ($740).Changes infair
valuewererecognizedinthestatementsofoperationswithin“Othernancialincome(expense),net,”representingagainofapproximately
US$22($284)in2013,againofapproximatelyUS$95($1,198)in2012andalossofapproximatelyUS$92($1,145)in2011.Asof
December31,2012,cashdepositsinmarginaccountsassociatedwiththistransactionwereapproximatelyUS76($975).InApril2013,the
aforementionedtransactionexpiredwithnofurtherconsequencestoCEMEX,S.A.B.deC.V.
10E) Risk management
Sincethebeginningof2009,withtheexceptionofthecappedcalltransactionsenteredintoinMarch2010andMarch2011inconnection
with2015Notes,2016Notesand2018Notes(notes10B,10Dand16),CEMEX,S.A.B.deC.V.hasbeenreducingtheaggregatenotional
amountofitsderivatives,therebyreducingtheriskofcashmargincalls.Thisinitiativehasincludedclosingsubstantiallyallnotionalamounts
ofderivativeinstrumentsrelatedtodebtofCEMEX,S.A.B.deC.V.(currencyandinterestratederivatives),whichwascompletedduringApril
2009.TheFacilitiesAgreementsignicantlyrestrictsCEMEXS.A.B.deC.V.,abilitytoenterintoderivativetransactions.
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