Cemex 2013 Annual Report Download - page 88
Download and view the complete annual report
Please find page 88 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 consolidated financial statements
TheFacilitiesAgreementalsocontainsanumberofafrmativecovenantsthat, amongotherthings, requireCEMEX toprovideperiodic
nancialinformationtoitslenders. However,anumberofthosecovenantsandrestrictionswillautomaticallyceasetoapplyorbecome
lessrestrictiveif (i) CEMEX’s consolidated leverageratioforthetwo mostrecently completed semi-annualtestingperiods islessthan
orequalto3.5times;and(ii)nodefaultundertheFacilitiesAgreementiscontinuing.RestrictionsthatwillceasetoapplywhenCEMEX
satisessuchconditionsincludethecapitalexpenditurelimitationsmentionedaboveandseveralnegativecovenants,includinglimitationson
CEMEX’sabilitytodeclareorpaycashdividendsanddistributionstoshareholders,limitationsonCEMEX’sabilitytorepayexistingnancial
indebtedness,certainassetsalerestrictions,thequarterlycashbalancesweep,certainmandatoryprepaymentprovisions,andrestrictions
onexercisingcalloptionsinrelationtoanyperpetualbondsCEMEXissues(providedthatcreditorswillcontinuetoreceivethebenetof
anyrestrictivecovenantsthatothercreditorsreceiverelatingtoothernancialindebtednessofCEMEXinexcessofUS$75).Atsuchtime,
severalbasketsandcapsrelatingtonegativecovenantswillalsoincrease,includingpermittednancialindebtedness,permittedguarantees
andlimitationsonliens.However,CEMEXcannotassurethatitwillbeabletomeettheconditionsfortheserestrictionstoceasetoapplyprior
tothenalmaturitydateundertheFacilitiesAgreement.
Inaddition,theFacilitiesAgreementcontainseventsofdefault,someofwhichmaybeoutsideofCEMEX’scontrol.CEMEXcannotassure
thatitwillbeabletomeetanyoralloftheabovemilestonesforrepayingindebtednesspursuanttheFacilitiesAgreementorredeeming,
convertingintoequity,purchasing,repurchasingorextendingthematuritiesofCEMEX’sotherindebtedness.Failuretomeetanyofthese
milestoneswillresultinaspringbackofthematuritydateofCEMEX’sindebtednessundertheFacilitiesAgreement,andCEMEXcannot
assurethatatsuchtimeitwillbeabletorepaysuchindebtedness.Moreover,CEMEXcannotassurethatitwillbeabletocomplywiththe
restrictivecovenantsandlimitationscontainedintheFacilitiesAgreement.CEMEX’sfailuretocomplywithsuchcovenantsandlimitations
couldresultinaneventofdefault,whichcouldmateriallyandadverselyaffectCEMEX’sbusinessandnancialcondition.
Financial Covenants
TheFacilitiesAgreementrequiresthecompliancewithnancialratioscalculatedonaconsolidatedbasis,whichmainlyinclude:a)theratio
ofnetdebttooperatingEBITDA(“leverageratio”);andb)theratioofoperatingEBITDAtointerestexpense(“coverageratio”).Pursuantto
theFacilitiesAgreement,beginningonSeptember17,2012,ateachcompliancedate,nancialratiosshouldbecalculatedaccordingtothe
formulasestablishedinthedebtcontractsusingtheconsolidatedamountsunderIFRS.During2011,nancialratioswerecalculatedaccording
totheformulasestablishedintheFinancingAgreementusingtheconsolidatedamountsunderMFRS.Thedeterminationsofnancialratios
requireinmostcases
proforma
adjustments,accordingtothedenitionsofthecontractsthatdifferedfromtermsdenedunderIFRSand
MFRS.
BasedontheFacilitiesAgreement,CEMEXmustcomplywithconsolidatednancialratiosandtestsunderIFRS,includingacoverageratiofor
eachperiodoffourconsecutivescalquarters(measuredsemi-annually)ofnotlessthan(i)1.50timesfortheperiodendingonDecember
31,2012uptoandincludingtheperiodendingonJune30,2014,(ii)1.75timesfromtheperiodendingonDecember31,2014uptoand
includingtheperiodendingonJune30,2015,(iii)1.85timesfortheperiodendingonDecember31,2015,(iv)2.0timesfortheperiod
endingonJune30,2016,and(v)2.25timesfortheperiodendingonDecember31,2016.Inaddition,theFacilitiesAgreementallows
CEMEXamaximumconsolidatedleverageratioforeachperiodoffourconsecutivescalquarters(measuredsemi-annually)nottoexceed:
(i)7.0timesforeachperiodfromtheperiodendingonDecember31,2012uptoandincludingtheperiodendingonDecember31,2013,
(ii)6.75timesfortheperiodendingonJune30,2014,(iii)6.5timesfortheperiodendingonDecember31,2014,(iv)6.0timesforthe
periodendingonJune30,2015,(v)5.5timesfortheperiodendingonDecember31,2015,(vi)5.0timesfortheperiodendingonJune30,
2016,and(vii)4.25timesfortheperiodendingonDecember31,2016.Applicableduring2011andresultingfromtheamendmentsmade
totheoriginalFinancingAgreementonOctober25,2010;CEMEXhadtocomplywithconsolidatednancialratiosandtestsunderMFRS,
includingacoverageratioofnotlessthan1.75timesfortheperiodendedonDecember31,2011.Inaddition,themaximumleverageratio
mustnothaveexceeded7.0timesfortheperiodendingDecember31,2011.
CEMEX’sabilitytocomplywiththeseratiosmaybeaffectedbyeconomicconditionsandvolatilityinforeignexchangerates,aswellasby
overallconditionsinthenancialandcapitalmarkets.ForthecomplianceperiodsendedasofDecember31,2013,2012and2011,taking
intoaccounttheFacilitiesAgreementandtheamendedFinancingAgreement,asapplicable,andbasedonitsIFRSandMFRSamounts,as
applicable,CEMEX,S.A.B.deC.V.anditssubsidiarieswereincompliancewiththenancialcovenantsimposedbyitsdebtcontracts.
[87]