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Notes to the consolidated financial statements
III. Mandatorily convertible securities due in 2019
InDecember2009,CEMEX,S.A.B.deC.V.completeditsoffertoexchangemarketablenotesissuedinMexicowithmaturitiesbetween
2010and2012,intomandatorilyconvertiblesecuritiesforapproximately$4,126(US$315).Reectingantidilutionadjustments,attheir
scheduledconversionin2019orearlierifthepriceoftheCPOreachesapproximately$30.68thesecuritieswillbemandatorilyconvertible
intoapproximately202millionCPOsataconversionpriceofapproximately$20.45perCPO.Duringtheirtenure,thesecuritiesbearinterest
atanannualrateof10%payablequarterly.Holdershaveanoptiontovoluntarilyconverttheirsecurities,aftertherstanniversaryoftheir
issuance,onanyinterestpaymentdateintoCPOs.Consideringthethenfunctionalcurrencyoftheissuer,theequitycomponentrepresented
bythefairvalueoftheconversionoptionasoftheissuancedateof$1,971wasrecognizedwithin“Otherequityreserves.”EffectiveJanuary
1,2013,inconnectionwiththechangeoftheParentCompany’sfunctionalcurrency,theconversionoptionembeddedinthesesecurities
startedtobetreatedasastand-alonederivativeliabilityatfairvaluethroughprotorloss,recognizinganinitialeffectof$365.Changesin
fairvalueoftheconversionoptiongeneratedalossof$135(US$10)in2013.
IV. Liabilities secured with accounts receivable
Asmentionedinnote9,asofDecember31,2013and2012,CEMEXmaintainedsecuritizationprogramsforthesaleoftradeaccounts
receivableestablishedinMexico,theUnitedStates,FranceandtheUnitedKingdom,bymeansofwhich,CEMEXeffectivelysurrenderscontrol
associatedwiththetradeaccountsreceivablesoldandthereisnoguaranteeorobligationtoreacquiretheassets.However,CEMEXretains
certainresidualinterestintheprogramsand/ormaintainscontinuinginvolvementwiththeaccountsreceivable.BasedonIAS39,CEMEX
recognizescashowsreceived,thatisthefundedamountsofthetradereceivablessoldwithin“Othernancialobligations,”andmaintains
thereceivablessoldinthebalancesheet.
V. Capital leases
CEMEX hasseveraloperatingand administrative assets,including buildingsand mobileequipment,under capitalleasecontracts.Future
paymentsassociatedwiththesecontractsarepresentedinnote23E.
16C) Fair value of nancial instruments
Financial assets and liabilities
CEMEX’scarryingamountsofcash,tradeaccountsreceivable,otheraccountsreceivable,tradeaccountspayable,otheraccountspayable
andaccruedexpenses,aswellasshort-termdebt,approximatetheircorrespondingestimatedfairvaluesduetotheshort-termmaturity
andrevolvingnatureofthesenancialassetsandliabilities.Temporaryinvestments(cashequivalents)andcertainlong-terminvestments
arerecognizedatfairvalue,consideringtotheextentavailable,quotedmarketpricesforthesameorsimilarinstruments.Theestimated
fairvalueofCEMEX’slong-termdebtislevel2,andiseitherbasedonestimatedmarketpricesforsuchorsimilarinstruments,considering
interestratescurrentlyavailableforCEMEXtonegotiatedebtwiththesamematurities,ordeterminedbydiscountingfuturecashowsusing
market-basedinterestratescurrentlyavailabletoCEMEX.AsofDecember31,2013and2012,thecarryingamountsofnancialassetsand
liabilitiesandtheirrespectivefairvalueswereasfollows:
2013 2012
Carrying Fair Carrying Fair
amount value amount value
Financial assets
Derivativeinstruments(notes13B) $ 6,274 6,274 $ 4,279 4,279
Otherinvestmentsandnon-currentaccountsreceivable(note13B) 5,786 5,586  4,131 3,931
   $ 12,060 11,860 $ 8,410 8,210
Financial liabilities
Long-termdebt(note16A) $ 187,021 201,040 $177,539 188,128
Othernancialobligations(note16B) 33,750 48,106  32,913 42,651
Derivativeinstruments(notes16Dand17) 508 508  5,451 5,451
   $ 221,279 249,654 $215,903 236,230
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