Cemex 2013 Annual Report Download - page 158
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Please find page 158 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
Equity risk
Equityriskistheriskthatthefairvalueoffuturecashowsofanancialinstrumentwilluctuatebecauseofchangesinthemarketpriceof
CEMEXS.A.B.deC.V.and/orthirdparty’sshares.Asdescribedinnote10D,CEMEX,S.A.B.deC.V.hasnegotiatedoptionsthatguaranteea
putoptiontransactionbasedonthepriceofCEMEX,S.A.B.deC.V.’s,ownCPOs.Undertheseequityderivativeinstruments,thereisadirect
relationshipinthechangeinthefairvalueofthederivativewiththechangeinvalueoftheunderlyingshareorindex.Allchangesinfairvalue
ofsuchequityderivativeinstrumentsarerecognizedthroughthestatementsofoperationsaspartof“Othernancialincome,net”.
AsofDecember31,2013and2012,thepotentialchangeinthefairvalueofCEMEX’soptions(cappedcall)andtheputoptiontransaction
basedonthepriceofCEMEX’sownCPOsthatwouldresultfromahypothetical,instantaneousdecreaseof10%inthemarketpriceof
CEMEX’sCPOs,withallothervariablesheldconstant,wouldhaveincreasedCEMEX’snetlossfor2013and2012byapproximatelyUS$89
($1,155)andUS$76($971),respectively,asaresultofadditionalnegativechangesinfairvalueassociatedwiththesecontracts.A10%
hypotheticalincreaseintheCPOpricewouldgenerateapproximatelytheoppositeeffect.
Inaddition,eventhoughthechangesinfairvalueofCEMEX’sembeddedconversionoptionsintheconvertiblenotesaffectthestatements
ofoperations,theydonotimplyanyriskorvariabilityincashows,consideringthatthroughtheirexercise,CEMEXwillsettleaxedamount
ofdebtwithaxedamountofshares.AsofDecember31,2013and2012,thepotentialchangeinthefairvalueoftheseembedded
conversionoptionsthatwouldresultfromahypothetical,instantaneousdecreaseof10%inthemarketpriceofCEMEX’sCPOs,withallother
variablesheldconstant,wouldhavedecreasedCEMEX’snetlossfor2013and2012byapproximatelyUS$8($102)andUS$89($1,148),
respectively,asaresultofadditionalpositivechangesinfairvalueassociatedwiththisoption.A10%hypotheticalincreaseintheCPOprice
wouldgenerateapproximatelytheoppositeeffect.
Liquidity risk
LiquidityriskistheriskthatCEMEX,S.A.B.deC.V.willnothavesufcientfundsavailabletomeetitsobligations.CEMEX,S.A.B.deC.V.
hassatiseditsoperatingliquidityneedsprimarilythroughtheoperationsofitssubsidiariesandexpecttocontinuetodosoforboththe
shortandlong-term.Althoughcashowfromouroperationshashistoricallymettheoverallliquidityneedsforoperations,servicingdebt
andfundingcapitalexpendituresandacquisitions,theoperationsareexposedtorisksfromchangesinforeign currencyexchangerates,
whichmaymateriallyincreasethenetlossofCEMEX,S.A.B.deC.V.andreducecashfromoperations.Consequently,inordertomeetits
liquidityneeds,CEMEX,S.A.B.deC.V.alsoreliesoncost-cuttingandoperatingimprovementstooptimizecapacityutilizationandmaximize
protability,aswellasborrowingundercreditfacilities,proceedsofdebtandequityofferings,andproceedsfromassetsales.Thenetcash
owsusedinoperatingactivities,aspresentedinitsstatementsofcashow,wasapproximately$40,425andthenetcashowprovided
byoperatingactivitiesof$6,990in2012and$6,356in2011.ThematuritiesofthecontractualobligationsofCEMEX,S.A.B.deC.V.are
includedinnote14.
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