Cemex 2012 Annual Report Download - page 84

Notes to the
consolidated
financial
statements
84
< previous I contents I next >
II. Optional convertible subordinated notes due in 2015
On March 30, 2010, CEMEX, S.A.B. de C.V. issued US$715 ($8,837) aggregate principal amount of 4.875% Optional Convertible
Subordinated Notes due 2015 (the “2015 Notes”). The notes are subordinated to all of CEMEX’s liabilities and commitments. The
notes are convertible into a fixed number of CEMEX’s ADSs, at the holder’s election, and are subject to antidilution adjustments. As
of December 31, 2012 and 2011, the conversion price per ADS was US$12.0886 and US$12.5721, respectively. In connection
with the offering, CEMEX, S.A.B. de C.V. entered into a capped call transaction expected to generally reduce the potential dilution
cost to CEMEX, S.A.B. de C.V. upon future conversion of the notes (note 16D). The fair value of the conversion option as of the
issuance date amounted to $1,232, which considering the functional currency of the issuer was recognized as a derivative
instrument within “Other non-current liabilities” (note 16D). Changes in fair value of the conversion option generated a net loss
of approximately $114 (US$9) in 2012 and a net gain of approximately $39 (US$3) in 2011, recognized within other financial
(expense) income, net. After antidilution adjustments, the conversion rate as of December 31, 2012 and 2011 was 82.7227 ADS
and 79.5411 ADS, respectively, per each 1 thousand dollars principal amount of such notes.
III. Mandatorily convertible securities due in 2019
In December 2009, CEMEX, S.A.B. de C.V. completed its offer to exchange CBs issued in Mexico with maturities between 2010 and
2012, into mandatorily convertible securities for approximately $4,126 (US$315). Reflecting antidilution adjustments, at their
scheduled conversion in 2019 or earlier if the price of the CPO reaches approximately $31.9 the securities will be mandatorily
convertible into approximately 194 million CPOs at a conversion price of approximately $21.269 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 first anniversary of their issuance, on any interest payment date into CPOs. 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.”
IV. Liabilities secured with accounts receivable
As mentioned in note 9, as of December 31, 2012 and 2011, CEMEX maintained securitization programs for the sale of trade
accounts receivable established in Mexico, the United States, France and the United Kingdom, and terminated its program in Spain
during October 2012, 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
flows received, that is the funded amounts of the trade receivables sold within “Other financial 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.