Cemex 2012 Annual Report Download - page 139

Download and view the complete annual report

Please find page 139 of the 2012 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.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

Notes to the
financial
statements
139
< previous I contents I next >
Based on the Facilities Agreement, CEMEX must comply with consolidated financial ratios and tests under IFRS, including a
coverage ratio for each period of four consecutive fiscal quarters (measured semi-annually) of not less than (i) 1.50 times for the
period ending on December 31, 2012 up to and including the period ending on June 30, 2014, (ii) 1.75 times from the period
ending on December 31, 2014 up to and including the period ending on June 30, 2015, (iii) 1.85 times for the period ending
on December 31, 2015, (iv) 2.0 times for the period ending on June 30, 2016, and (v) 2.25 times for the period ending on
December 31, 2016. In addition, the Facilities Agreement allows CEMEX a maximum consolidated leverage ratio for each period
of four consecutive fiscal quarters (measured semi-annually) not to exceed: (i) 7.0 times for each period from the period ending on
December 31, 2012 up to and including the period ending on December 31, 2013, (ii) 6.75 times for the period ending on June
30, 2014, (iii) 6.5 times for the period ending on December 31, 2014, (iv) 6.0 times for the period ending on June 30, 2015, (v)
5.5 times for the period ending on December 31, 2015, (vi) 5.0 times for the period ending on June 30, 2016, and (vii) 4.25 times
for the period ending on December 31, 2016. Applicable during 2011 and 2010, and resulting from the amendments made to the
Financing Agreement in October 2010, CEMEX had to comply with consolidated financial ratios and tests under MFRS, including
a coverage ratio of not less than 1.75 times for the periods ended on December 31, 2011 and 2010. In addition, the maximum
leverage ratio must not have exceeded 7.75 times for the period ending December 31, 2010 and 7.0 times for the period ending
December 31, 2011.
CEMEX’s ability to comply with these ratios may be affected by economic conditions and volatility in foreign exchange rates, as
well as by overall conditions in the financial and capital markets. For the compliance periods ended as of December 31, 2012,
2011 and 2010, taking into account the Facilities Agreement and the amended Financing Agreement, as applicable and based
on its IFRS and MFRS amounts, as applicable, CEMEX, S.A.B. de C.V. and its subsidiaries were in compliance with the financial
covenants imposed by its debt contracts.
The main consolidated financial ratios as of December 31, 2012, 2011 and 2010 were as follows:
IFRS Consolidated MFRS
nancial ratios Consolidated nancial ratios
2012 2011 2010
Leverage ratio 1, 2 Limit =< 7.00 =< 7.00 =< 7.75
Calculation 5.44 6.64 7.43
Coverage ratio 3 Limit > 1.50 > 1.75 > 1.75
Calculation 2.10 1.88 1.95
1 The leverage ratio is calculated in pesos by dividing “funded debt” by pro forma Operating income before other expenses, net plus depreciation and
amortization (“Operating EBITDA”) for the last twelve months as of the calculation date. Funded debt equals debt, as reported in the balance sheet
excluding capital leases, plus perpetual debentures and guarantees, plus or minus the fair value of derivative financial instruments, as applicable,
among other adjustments.
2 Pro forma Operating EBITDA represents, all calculated in pesos, Operating EBITDA for the last twelve months as of the calculation date, plus the
portion of Operating EBITDA referring to such twelve-month period of any significant acquisition made in the period before its consolidation in
CEMEX, minus Operating EBITDA referring to such twelve-month period of any significant disposal that had already been liquidated.
3 The coverage ratio is calculated in pesos using the amounts from the financial statements, by dividing the pro forma Operating EBITDA by the
financial expense for the last twelve months as of the calculation date. Financial expense includes interest accrued on the perpetual debentures.
For 2013 and going forward, CEMEX, S.A.B. de C.V. believes that it will continue to comply with its consolidated covenants under
its Facilities Agreement, as it is expecting to benefit from cost savings programs implemented during 2012 and 2011, favorable
market conditions in some of its key markets and decreasing costs for key inputs such as energy. Furthermore, CEMEX has an
asset disposal plan in place which, as in prior years, is expected to support CEMEX’s efforts to reduce its overall debt.