Cemex 2012 Annual Report Download - page 102

Notes to the
consolidated
financial
statements
102
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On April 29, 2010, stockholders at the annual ordinary shareholders’ meeting approved resolutions to: (i) increase the variable
common stock through the capitalization of retained earnings, issuing up to 1,153.8 million shares (384.6 million CPOs) based
on a price of $14.24 per CPO. Stockholders received 3 new shares for each 75 shares held (1 new CPO for each 25 CPOs held),
through the capitalization of retained earnings. As a result, shares equivalent to approximately 384.6 million CPOs were issued,
representing an increase in common stock of approximately $3, considering a nominal value of $0.00833 per CPO, and additional
paid-in capital of approximately $5,476, and (ii) increase the variable common stock by up to 750 million shares (250 million
CPOs) issuable as a result of antidilution adjustments upon conversion of CEMEX’s convertible securities (note 16B). These shares
are kept in CEMEX’s treasury. There was no cash distribution and no entitlement to fractional shares.
The CPOs issued pursuant to the exercise of options under the “Fixed program” (note 21A) generated additional paid-in capital of
approximately $11 in 2011 and $5 in 2010, and increased the number of shares outstanding. In addition, in connection with the
long-term executive stock-based compensation programs (note 21), in 2012, 2011 and 2010, CEMEX issued approximately 46.4
million CPOs, 43.4 million CPOs and 25.7 million CPOs, respectively, generating additional paid-in capital of approximately $486,
$495 and $312, respectively, associated with the fair value of the compensation received by executives.
20B) Other equity reserves
As of December 31, 2012 and 2011 other equity reserves are summarized as follows:
2012 2011
Cumulative translation effect, net of effects from perpetual debentures
and deferred income taxes recognized directly in equity (notes 19B and 20D) $ 13,635 15,189
Cumulative actuarial gains (losses) (3,174) (2,234)
Issuance of convertible securities 1 1,971 1,971
Treasury shares held by subsidiaries (229) (129)
$ 12,203 14,797
1 Represents the equity component associated with the issuances of mandatorily convertible notes described in note 16B. Upon mandatory conversion
of these securities, these balances will be correspondingly reclassified to common stock and/or additional paid-in capital.
For the years ended December 31, 2012, 2011 and 2010, the translation effects of foreign subsidiaries included in the statements
of comprehensive loss were as follows:
2012 2011 2010
Foreign currency translation adjustment 1 $ (16,031) 30,733 11,144
Foreign exchange fluctuations from debt 2 6,939 (11,305) 1,886
Foreign exchange fluctuations from intercompany balances 3 1,756 (8,068) (20,059)
$ (7,336) 11,360 (7,029)
1 These effects refer to the result from the translation of the financial statements of foreign subsidiaries.
2 Generated by foreign exchange fluctuations over a notional amount of debt in CEMEX, S.A.B. de C.V. associated with the acquisition of foreign
subsidiaries and designated as a hedge of the net investment in foreign subsidiaries.
3 Refers to foreign exchange fluctuations arising from balances with related parties in foreign currencies that are of a long-term investment nature
considering that their liquidation is not anticipated in the foreseeable future and foreign exchange fluctuations over a notional amount of debt of a
subsidiary of CEMEX España identified and designated as a hedge of the net investment in foreign subsidiaries.
20C) Retained earnings
net income for the year is subject to a 5% allocation toward a legal reserve until such reserve equals one fifth of the capital
represented by the common stock. As of December 31, 2012, the legal reserve amounted to $1,804.