building a STRONGER foundation - Cemex

Capital Expenditures
As of December 31, 2010, in connection with our significant projects, we had contractually committed capital expenditures of
approximately U.S.$625 million, including our capital expenditures estimated to be incurred during 2011. This amount is expected to
be incurred over the next 3 years, according to the evolution of the related projects. Our capital expenditures incurred for the years
ended December 31, 2009 and 2010, and our expected capital expenditures during 2011, which include an allocation to 2011 of a
portion of our total future committed amount, are as follows:
112
Actual
2009 2010
Estimated
in 2011
(in millions of Dollars)
North America(1) ......................................................................................... U.S.$ 144 162 140
Europe(2)...................................................................................................... 314 224 194
Central and South America and the Caribbean(3)........................................ 104 82 74
Africa and the Middle East........................................................................... 28 33 23
Asia............................................................................................................... 8 19 19
Others(4)....................................................................................................... 38 35 20
Total consolidated ........................................................................................ U.S.$ 636 555 470
Of which:
Expansion capital expenditures(5) ...................................................... U.S.$ 401 126 120
Base capital expenditures(6) ............................................................... 235 429 350
(1) In North America, our estimated capital expenditures during 2011 include amounts related to the expansion of the Tepeaca plant
in Mexico.
(2) In Europe, our estimated capital expenditures during 2011 include amounts related to the construction of the new cement
production facility in Teruel, Spain, and the expansion of our cement plant in Latvia.
(3) In Central and South America and the Caribbean, our estimated capital expenditures during 2011 include the construction of the
new kiln in Panama.
(4) Our “Others” capital expenditures expected during 2011 include our trading activities as well as our corporate requirements.
(5) Expansion capital expenditures refer to the acquisition or construction of new assets intended to increase our current operating
infrastructure and which are expected to generate additional amounts of operating cash flows.
(6) Base capital expenditures refer to the acquisition or construction of new assets that would replace portions of our operating
infrastructure and which are expected to maintain our operating continuity.
For the year ended December 31, 2010, we recognized U.S.$555 million in capital expenditures. As of the date of this annual
report, plans for 2011 capital expenditures totaled U.S.$470 million. Pursuant to the Financing Agreement, we (i) were prohibited
from making aggregate capital expenditures in excess of U.S.$700 million for the year ended December 31, 2010 and (ii) are
prohibited from making aggregate capital expenditures in excess of U.S.$800 million for the year ended December 31, 2011 and each
year thereafter until the debt under the Financing Agreement has been repaid in full.
Our Indebtedness
As of December 31, 2010, we had approximately Ps202,818 million (U.S.$16,409 million) of total debt, not including
approximately Ps16,310 million (U.S.$1,320 million) of Perpetual Debentures, which are not accounted for as debt under MFRS but
are considered to be debt for purposes of U.S. GAAP. See notes 12A, 16D and 24 to our consolidated financial statements included
elsewhere in this annual report. As of December 31, 2010, after giving pro forma effect to (1) the issuance of the January 2011 Notes,
the 2011 Optional Convertible Subordinated Notes and the April 2011 Notes, (2) the 2011 Prepayments and (3) the 2011 Private
Exchange, we had approximately Ps208,100 million (U.S.$16,837 million) of total debt of which approximately 1% was short-term
(including current maturities of long-term debt) and 99% was long-term. As of December 31, 2010, after giving pro forma effect to
(1) the issuance of the January 2011 Notes, the 2011 Optional Convertible Subordinated Notes and the April 2011 Notes, (2) the 2011
Prepayments and (3) the 2011 Private Exchange, approximately 75% of our consolidated debt was Dollar-denominated, approximately
4% was Peso-denominated, approximately 21% was Euro-denominated and immaterial amounts were denominated in other
currencies; the weighted average interest rates of our debt in our main currencies were 6.4% on our Dollar-denominated debt, 8.0% on
our Peso-denominated debt and 5.8% on our Euro-denominated debt.
On March 10, 2009, our credit ratings were downgraded below investment grade by Standard & Poor’s and by Fitch. The loss of
our investment grade ratings has negatively impacted and will continue to negatively impact the availability of financing and the terms
on which we could refinance our debt, including the imposition of more restrictive covenants and higher interest rates.