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3Q12 Press Release 559c
3Q12 Press Release 559c
Homes titled
Net Revenues (Ps.mm)
Gross Profit (Ps.mm)
Gross Margin
EBITDA (Ps.mm)
EBITDA Margin
Net Income
Net Margin
Comprehensive income
Ps.
Ps.
Ps.
Ps.
Ps.
1,142,594
275,401
24.1%
106,818
9.3%
79,230
6.9%
32,010
3Q11
Variance
4,010
3.8%
1,173,824
337,124
28.7%
Ps.
193,891
16.5%
Ps. 128,359
(10.9%)
Ps.
194,001
Ps.
Ps.
(2.7%)
(18.3%)
(4.6%)
(44.9%)
(7.2%)
161.7%
17.9%
(83.5%)
9M12
13,081
Ps.
Ps.
Ps.
Ps.
Ps.
3,772,181
968,334
25.7%
500,908
13.3%
207,548
5.5%
89,447
9M11
10,903
Variance
20.0%
3,127,681
20.6%
942,189
2.8%
30.1% (4.5%)
Ps.
508,395 (1.5%)
16.3% (3.0%)
Ps. 12,157 1807.2%
(0.4%) 5.9%
Ps.
294,992 (69.7%)
Ps.
Ps.
Net Revenues in the third quarter 2012 decreased 2.7% to Ps. 1,142.6
million from Ps. 1,173.8 million in 3Q11, driven by a slight reduction in
volumes and a deterioration of the product mix. For the first nine months
2012, the Company increased revenues 20.6% to Ps. 3,772.2 million,
from Ps. 3,127.7 million in the first nine months 2011, mainly due to a
20.0% increase in accumulated volume (from 10,903 units sold to 13,081
units sold).
EBITDA decreased to Ps. 106.8 million in 3Q12 from 193.9 million in
3Q11 due to a decline in gross margins driven by a sales mix shift and
the absence of significant commercial lot sales. For the first nine months
2012, EBITDA decreased 1.5% to Ps. 500.9 million from Ps. 508.4
million in the first nine months 2011 as a result of lower gross margins
and accumulated SG&A expenses.
Net Income increased to Ps. 79.2 million in 3Q12 from Ps. (128.4)
million in 3Q11, mainly due to a Ps. 154.9 million gain in the interest
income line as a result of the appreciation of the peso. For the first nine
months 2012, net income increased to Ps. 207.5 million from Ps. (12.2)
million in the first nine months 2011 due to similar effects experienced
during the third quarter, evidenced by the Ps. 243.8 million gain in the
interest income line.
Investor Relations Contacts:
In Monterrey:
Eugenio Garza, Chief Financial Officer
Tel: +52 81 1133-6684
eugenio.garza@javer.com.mx
Veronica Lozano, Investor Relations
Tel. +52 (81) 1133-6699 Ext. 6515
vlozano@javer.com.mx
In New York:
Melanie Carpenter
i-advize Corporate Communications, Inc.
Tel: +212-406-3692
javer@i-advize.com
For more information, visit:
http://www.javer.com.mx/inversionistasHome.html
CEO STATEMENT
Mr. Roberto Russildi, Javers Chief Executive Officer, commented, During the third quarter, the
operating environment continued to be challenging in terms of subsidy availability, shifting demand
mix, and competition. As anticipated in Javers 2012 business plan, the third quarter was the most
challenging in terms of subsidy availability. Therefore, the focus for both this quarter and the fourth
quarter 2012 will be to leverage more middle income homes with better prices and margins to
improve on the AEL-focused first half of the year. During the quarter, the volumes displaced were
below expectations and at realized prices below those in 2011. Sluggish demand in this segment,
especially in Nuevo Leon, driven by an unexpected rise in the states unemployment levels, coupled
with increased competition, was the main culprit of this effect. Furthermore, the absence of
significant commercial lot sales, which carry higher margins, eroded gross margins compared to
3Q11 levels. Both of these effects, along with negative operating leverage with regards to SG&A,
negatively impacted quarterly EBITDA margins to levels below expectations. Despite these topline headwinds, Javer was able to continue demonstrating working capital and free cash flow
discipline, which is paramount to the Companys strategy. Javers working capital cycle remained
stable compared to 3Q11, and the Company was able to operate under a neutral free cash flow
environment without sacrificing investments in land or work-in-progress inventory. Although
Javers available finished good inventory was slightly below regular levels, the Companys
development pipeline remains at a healthy level and with prototype flexibility to meet any sudden
increase in subsidy availability, which could take place towards the latter part of the fourth quarter
and into 2013.
On a more positive note, Javer formally commenced commercial operations on two new fronts
during the quarter, which will begin to title homes during fourth quarter 2012. Privadas del Poniente
in Nuevo Leons Santa Catarina municipality, focusing on the lower end of the Companys
residential segment, is off to a great start and should contribute to enhance the Companys product
mix over the next few months. Lago de Guadalupe, in the State of Mexicos Nicolas Romero
municipality, represents Javers initial entry into this attractive market, as well as the second major
new regional office opening that the Company has undertaken in the past two years.
Javer is comfortable that the seasonal pickup in non-subsidy customers during the fourth quarter,
which the Company has experienced for a number of years, especially in the middle income
segment, in addition to a more healthy commercial lot sales pipeline, will allow the Company to
reach the lower end of stated guidance, all within the framework of the most prudent working
capital and balance sheet in the industry.
Although challenges remain, Javer is confident that given the Companys accomplishments in 2012
and the manner in which the business has reacted and adapted, the Company will continue to
deliver superior performance and returns to all stakeholders.
Page 2
3Q12
Equivalent Units Sold
Low Income
Middle Income
Residential
TOTAL
% of
revenues
3Q11
2,388
1,679
94
4,161
% of
Variance
revenues
2,322
1,528
160
4,010
2.8%
9.9%
(41.3%)
3.8%
9M12
% of
revenues
8,013
4,811
257
13,081
9M11
% of
Variance
revenues
6,971
3,587
345
10,903
14.9%
34.1%
(25.5%)
20.0%
Revenues (Ps.mm)
Low Income
504,745
44.2%
448,907
38.2%
12.4%
1,705,924
45.2%
1,479,747
47.3%
Middle Income
516,567
45.2%
478,829
40.8%
7.9%
1,466,882
38.9%
1,111,417
35.5%
32.0%
8.5%
97.9%
181,537
Ps. 1,109,273
15.5%
94.5%
(46.7%)
263,248
0.8% Ps. 3,436,055
7.0%
91.1%
396,377
Ps. 2,987,541
12.7%
95.5%
(33.6%)
15.0%
2.1%
64,551
100.0% Ps. 1,173,824
5.5%
100.0%
(62.0%)
336,126
-2.7% Ps. 3,772,181
4.5%
100.0%
139.9%
20.6%
Residential
Total Home Sales
Ps.
96,729
1,118,041
Ps.
24,553
1,142,594
8.9%
140,140
100.0% Ps. 3,127,681
15.3%
Middle Income units have selling prices between Ps. 260,000 and Ps.
560,000. Residential units have selling price exceeding Ps. 560,000.
3Q12
3Q11
9M12
9M11
Ps.
Ps.
Ps.
Ps.
211.4
307.7
1,029.0
268.7
Ps.
Ps.
Ps.
Ps.
193.3
313.4
1,134.6
276.6
Ps.
Ps.
Ps.
Ps.
212.9
304.9
1,024.3
262.7
Ps.
Ps.
Ps.
Ps.
212.3
309.8
1,148.9
274.0
Units Sold: The Company sold 4,161 units in 3Q12 compared to 4,010 units in 3Q11, representing
an increase of 3.8%. The low income and middle income segment posted increases in revenues of
12.4% and 7.9%, respectively, while the residential segment decreased 46.7%. Low income sales
represented 57.4% of total units titled and 44.2% of total revenues in 3Q12, compared to 57.9% and
38.2%, respectively, in 3Q11. For the first nine months 2012, units titled increased 20.0% to 13,081
from 10,903 in the first nine months 2011. The middle income segment reported the greatest
increase in revenues with 32.0% growth, followed by the low income segment with 15.3%;
conversely, the residential segment decreased 33.6%. Low income sales represented 61.3% of total
units sold and 45.2% of total revenues in the first nine months 2012, compared to 63.9% and 47.3%,
respectively, in the same period 2011.
Prices: During third quarter 2012, Javers average sales price decreased to Ps. 268.7 thousand from
276.6 thousand in 3Q11. For the first nine months 2012, the average sales price decreased to Ps.
262.7 thousand from Ps. 274.0 thousand in the first nine months 2011.
Commercial lot sales decreased 62.0% to Ps. 24.6 million in 3Q12 from Ps. 64.6 million in 3Q11,
as there were no material bulk sales reported during the quarter. For the first nine months 2012,
commercial lot sales registered a 139.9% increase to Ps. 336.1 million from the 140.1 million
reported in the first nine months 2011.
Page 3
Mortgage Provider Mix: During 3Q12, Infonavit continued to be Javers primary mortgage
provider representing 97.0% of total units titled compared to 88.2% in 3Q11. For the first nine
months 2012, a similar pattern took place, with 96.0% of sales originating from Infonavit compared
to 91.2% in the same period 2011.
Mortgage Provider
Infonavit
Fovissste
Cofinavit
Banks / Sofoles
Other
TOTAL
3Q12
% of total
3Q11
% of total
9M12
% of total
9M11
% of total
4,036
30
18
35
42
4,161
97.0%
0.7%
0.4%
0.8%
1.0%
100.0%
3,535
89
74
201
111
4,010
88.2%
2.2%
1.8%
5.0%
2.8%
100.0%
12,563
152
52
171
143
13,081
96.0%
1.2%
0.4%
1.3%
1.1%
100.0%
9,943
150
166
462
182
10,903
91.2%
1.4%
1.5%
4.2%
1.7%
100.0%
3Q12
3Q11
258,008 Ps.
17,393 Ps.
275,401 Ps.
284,124
53,000
337,124
Variance
9M12
9M11
831,339 Ps.
136,995 Ps.
968,334 Ps.
834,359
107,830
942,189
Variance
23.1%
70.8%
24.1%
25.6%
82.1%
28.7%
(9.2%) Ps.
(67.2%) Ps.
(18.3%) Ps.
(2.5 pp)
(11.3 pp)
(4.6 pp)
24.2%
40.8%
25.7%
27.9%
76.9%
30.1%
(0.4%)
27.0%
2.8%
(3.7 pp)
(36.2 pp)
(4.5 pp)
Gross Profit decreased 18.3% in 3Q12 to Ps. 275.4 million when compared to the Ps. 337.1
million reported in 3Q11, mainly due to a shift in the sales mix and a decrease in commercial lot
sales, which yield higher margins. For the first nine months 2012, gross profit increased 2.8% to Ps.
968.3 million from the Ps. 942.2 million reported in the same period 2011, given the accumulated
profits of commercial lot sales in first half 2012.
Gross Margin decreased 4.6 percentage points in 3Q12 and 4.5 percentage points in the first nine
months 2012 due to the sales mix shift and commercial lot effects described above.
Page 4
EBITDA / MARGIN
3Q12
3Q11
Ps.
177,990 Ps.
15.58%
155,297
13.23%
Ps.
106,818 Ps.
9.3%
193,891
16.5%
Variance
9M12
9M11
Variance
14.6% Ps.
2.3 pp
505,076 Ps.
13.39%
477,003
15.25%
5.9%
(1.9 pp)
(44.9%) Ps.
(7.2 pp)
500,908 Ps.
13.3%
508,395
16.3%
(1.5%)
(3.0) pp
SG&A
Ps.mm
as a % of Sales
EBITDA
Ps.mm
EBITDA Margin
Selling, General and Administrative Expenses increased 14.6% in 3Q12 as a result of corporate
infrastructure expenses and advertising. For the first nine months 2012, SG&A increased 5.9%; as a
percentage of sales, SG&A increased 2.3 percentage points in 3Q12, and decreased 1.9 percentage
points in the first nine months 2012.
EBITDA decreased 44.9% in 3Q12 to Ps. 106.8 million from Ps. 193.9 million in 3Q11; EBITDA
margin decreased 7.2 percentage points as a result of the previously mentioned factors. For the first
nine months 2012, EBITDA decreased 1.5% to Ps. 500.9 million from Ps. 508.4 million; EBITDA
margin decreased 3.0 percentage points in the first nine months 2012 due to accumulated SG&A
expenses.
3Q12
3Q11
Variance
9M12
Interest expense
Interest income
FX gains / losses
Ps.
Ps. Ps. -
123,420 Ps.
4,947 Ps. 154,883 Ps.
115,440
1,891
273,532
6.9% Ps.
161.6% Ps.
(156.6%) Ps.
373,600 Ps.
-16,227 Ps.
-243,768 Ps.
NCFR
Ps. -
36,411 Ps.
387,081
(109.4%) Ps.
113,605 Ps.
9M11
354,875
-4,734
122,570
472,711
Variance
5.3%
242.8%
(298.9%)
(76.0%)
Net Income increased to Ps. 79.2 million in 3Q12 from Ps. (128.4) million in 3Q11. For the first
nine months 2012, net income increased to Ps. 207.5 million from Ps. (12.2) million in the first nine
months 2011 due to a Ps. 243.8 million non-cash gain related to the appreciation of the peso.
Comprehensive Income, which includes MTM gains and losses on derivatives to hedge foreign
exchange exposure on debt, decreased to Ps. 32.0 million in 3Q12 and to Ps. 89.4 million in the first
nine months 2012.
Page 5
ASSETS / LIABILITIES
Cash and cash equivalents increased to Ps. 346.2 million as of September 30, 2012 from Ps. 340.3
million as of September 30, 2011.
WORKING CAPITAL
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
September 2012
Ps.mm
Days
1,789,731
121
2,412,025
227
1,120,629
106
1,085,904
102
3,687
0
4,232,794
352
LTM Sales
LTM Cost of Goods Sold
Ps.
Ps.
5,363,074
3,865,302
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
September 2011
Ps.mm
Days
1,852,916
129
2,162,906
213
1,064,241
105
1,003,500
99
10,588
1
4,409,266
347
Ps.
Ps.
5,229,339
3,689,175
Javer continued with a steady working capital cycle in general terms for the period ended
September 30, 2012, as slightly higher inventory levels were financed by slightly higher supplier
balances.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
106,817
116,501
(10,583)
(102,826)
(25,014)
(85,677)
(1,688)
(2,470)
3Q11
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
193,891
99,463
(68,335)
(94,659)
(69,221)
(91,283)
(7,968)
(38,112)
9M12
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
500,908
328,121
25,695
(311,657)
(126,730)
(401,306)
6,475
21,506
9M11
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
Ps.
508,395
237,137
(348,292)
(327,422)
(158,572)
(353,871)
(17,979)
(460,604)
For the first nine months 2012, the Company reported positive free cash flow of Ps. 21.5 million as
working capital investments were minimized by closely aligning construction spends with
collections.
Page 6
DEVELOPMENT PIPELINE
Home Starts
Home Completions
Homes Titled
Available Finished Home Inventory
Homes under active development (incl.
AFHI) Land Reserves
Total
1Q10
5,582
1,340
1,349
1,415
5,294
127,141
2Q10
4,922
3,030
3,062
1,401
7,319
127,238
3Q10
5,333
4,254
4,184
1,374
7,765
122,975
4Q10
2,106
7,725
7,468
1,444
4,725
131,118
1Q11
3,582
2,912
3,007
1,349
8,851
130,234
2Q11
3,178
3,858
3,886
1,321
7,459
104,292
3Q11
8,113
4,204
4,010
1,515
8,650
108,148
4Q11
6,473
6,478
5,436
2,557
7,979
132,996
1Q12
4,989
4,264
4,438
2,383
7,690
128,071
2Q12
3,320
3,692
4,483
1,592
6,869
127,487
3Q12
3,597
3,935
4,161
1,366
6,886
122,962
Home Starts decreased 55.7% to 3,597 in 3Q12 when compared to 8,113 in 3Q11, reflecting a
more normalized development pipeline, which did not need as much investment in 3Q12 compared
to 3Q11.
Home Completions decreased 6.4% in 3Q12 to 3,935 from 4,204 in 3Q11, in-line with the
Companys construction spends during the quarter.
Finished Home Inventory decreased 14.2% to 1,366 units from 1,592 units reported at the end of
2Q12, as home completions failed to replenish Javers finished home inventory to more normalized
levels.
2012
2011
2010
2009
2008
3,000
2,000
2007
2006
2005
1,000
0
Page 7
LAND RESERVES
As of September 30, 2012, the Companys total land bank reached approximately 122,962 units, of
which approximately 72,015 were owned land reserves, while 50,947 were held through land trust
agreements.
54,785
Derivatives
TOTAL
54,785
2,980,250
95,387
54,785
3,020,852
TOTAL DEBT
CASH AND CASH EQUIVALENTS
MTM DERIVATIVE POSITION
NET DEBT
3,075,637
346,245
260,675
2,468,717
Notional
(US$)
Coupon Swaps (TIIE)
Coupon Swaps (Fix)
Principal Hedges (Forwards)
Embedded derivatives asset
TOTAL
156
120
40
FMV (Ps$)
Ps.
Ps.
Ps.
Ps.
Ps.
FMV (US$)
209,088
23,454
(256)
28,389
260,675
16,269
1,825
(23)
18,070
3.15
2.76
1.79
As of September 30, 2012, Javer continued to possess available credit facility lines in excess of Ps.
1,473.5 million.
As of September 30, 2012, Javer maintained derivative positions to hedge 100% of the Companys
currency exposure related to the first five years of 2021 High Yield Bond coupons and 100% of the
coupons related to the remaining principal amount of the 2014 Notes.
As of September 30, 2012, the Company possessed US$38 million in available credit lines from
derivative counterparties to finance any potential negative carrying values of the Companys
derivative contracts.
As of September 30, 2012, Total Debt / LTM EBITDA reached 3.15x; EBITDA interest coverage
reached 1.79x.
Page 8
About Javer:
Servicios Corporativos Javer S.A.P.I. de C.V. is one of the largest privately-owned housing
development companies in Mexico, specializing in the construction of low-income, middle income
and residential housing in the Northern region of Mexico. The Company, which is headquartered
the city of Monterrey, in the state of Nuevo Leon, began operations in 1973 and is the regions
leading housing developer in terms of units sold, the fourth-largest supplier of Infonavit homes in
the country, and has a 16% market share in the state of Nuevo Leon. The Company operates in the
states of Nuevo Leon, Aguascalientes, Tamaulipas, Jalisco and recently Queretaro.
During 2011, the Company reported revenues of Ps. 4,718.9 million (US$ 337.5 million) and sold a
total of 16,339 units.
Disclaimer:
This press release may include forward-looking statements. These forward-looking statements
include, without limitation, those regarding Javers future financial position and results of
operations, the Companys strategy, plans, objectives, goals and targets, future developments in the
markets in which Javer participates or are seeking to participate or anticipated regulatory changes in
the markets in which Javer operates or intends to operate.
Javer cautions potential investors that forward looking statements are not guarantees of future
performance and are based on numerous assumptions and that Javers actual results of operations,
including the Companys financial condition and liquidity and the development of the Mexican
mortgage finance industry, may differ materially from the forward-looking statements contained in
this press release. In addition, even if Javers results of operations are consistent with the forwardlooking statements contained in this press release, those results or developments may not be
indicative of results or developments in subsequent periods.
Important factors that could cause these differences include, but are not limited to: risks related to
Javers competitive position; risks related to Javers business and Companys strategy, Javers
expectations about growth in demand for its products and services and to the Companys business
operations, financial condition and results of operations; access to funding sources, and the cost of
the funding; changes in regulatory, administrative, political, fiscal or economic conditions,
including fluctuations in interest rates and growth or diminution of the Mexican real estate and/or
home mortgage market; increases in customer default rates; risks associated with market demand
for and liquidity of the notes; foreign currency exchange fluctuations relative to the U.S. Dollar
against the Mexican Peso; and risks related to Mexicos social, political or economic environment.
Page 9
September 30,
2012
December 31,
2011
Ps.
Ps.
346,245
1,729,870
2,412,025
171,625
270,398
4,930,163
59,861
1,120,629
260,527
260,675
101,938
Ps. 6,733,793
415,721
2,019,973
2,636,334
166,521
204,341
5,442,890
70,425
875,367
288,259
307,099
144,546
Ps. 7,128,586
Ps.
287,397
1,159,340
3,020,853
273,696
27,148
782,992
5,264,029
59,000
49,377
1,170,514
1,268
5,749
8,081
204,452
1,498,441
3,245,577
199,361
25,437
779,453
5,748,269
734,806
626,310
108,648
1,469,764
Ps. 6,733,793
734,806
418,762
226,749
1,380,317
Ps. 7,128,586
Ps.
54,785
812,208
1,263
3,687
Page 10
Revenues
Costs
Gross profit
Selling and administrative expenses
Other expenses net
Net comprehensive financing result
Income (loss) before income taxes
Income taxes
Net income (loss)
Other comprehensive loss item:
Net (loss) gain on cash flow hedges
Total comprehensive income
3Q12
3Q11
9M 2012
9M 2011
Ps. 1,142,594
867,193
Ps. 1,173,824
836,700
Ps. 3,772,181
2,803,847
Ps. 3,127,681
2,185,492
337,124
155,297
57
387,081
(205,311)
(76,952)
(128,359)
968,334
505,076
1,514
113,605
348,139
140,591
207,548
942,189
477,003
11,920
472,711
(19,445)
(7,288)
(12,157)
275,401
177,990
909
(36,411)
132,913
53,683
79,230
Ps.
(47,220)
32,010
322,360
Ps. 194,001
Ps.
(118,101)
89,447
Page 11
307,149
Ps. 294,992
Capital
Stock
Ps. 734,806
Ps. 734,806
Retained
Earnings
(Accumulated
Deficit)
Ps. 418,762
207,548
Ps. 626,310
Valuation of
Derivative
Financial
Instruments
Ps. 226,749
(118,101)
Ps. 108,648
Total
Stockholders
Equity
Ps. 1,380,317
89,447
Ps. 1,469,764
Page 12
Operating activities:
(Loss) income before income taxes
Items related to investing activities:
Depreciation and amortization
Unrealized exchange (gain) loss
Items related to financing activities:
Effects of valuation of derivative financial instruments
Interest expense
September 30,
2012
September 30,
2011
Ps.
Ps.
348,139
(19,445)
37,648
(260,044)
43,210
266,146
21,093
357,373
504,209
(142,532)
350,142
497,521
300,667
31,384
(88,855)
8,432
(120,883)
(186,730)
(120,313)
62,390
(283,971)
(5)
(2,062)
(122,336)
593
348,056
(99,448)
(949)
3,420
(66,747)
(47,335)
(79,074)
Investing activities:
Sales (purchase) of machinery and equipment
Other assets
Net cash used in investing activities
6,475
(21,368)
(14,893)
(17,979)
(31,993)
(49,972)
Financing activities:
Proceeds from notes payable from financial institutions
Payments of notes payable to financial institutions
Proceeds from long-term debt
Payments of long-term debt
Interest paid
Debt issuance costs
Payments commission
Net cash (used in) provided by financing activities
Cash:
Net decrease in cash
Cash at beginning of year
Cash at end of year
(402,639)
100,000
(50,000)
348,754
(25,219)
(327,422)
(64,526)
(4,139)
(22,552)
(69,476)
415,721
(151,598)
491,939
(59,000)
7,495
(39,477)
(311,657)
Ps.
346,245
Ps.
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340,341
1. Inventories
As of
September 30,
2012
Ps. 808,822
349,210
1,253,993
Ps. 2,412,025
As of
December 31,
2011
Ps. 1,060,494
396,118
1,179,722
Ps. 2,636,334
As of
December 31,
2011
Unsecured loan with an interest rate of TIIE plus a
spread of 4.0%
Unsecured loan with an interest rate of TIIE plus a
spread of 2.75%
$ 50,000
9,000
$59,000
The TIIE rate is established by the Bank of Mexico. On December 31, 2011, it was 4.79%.
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3. Long-term debt
As of
September 30,
2012
Ps. 2,520,182
379,298
80,770
As of December
31, 2011
Ps. 2,685,916
412,276
87,681
59,006
76,717
4,299
7,185
13,571
9,721
11,869
15,458
6,643
3,075,638
(54,785)
Ps. 3,020,853
Long-term debt
3,294,954
(49,377)
Ps. 3,245,577
Ps.
106,207
13,244
1,922
2,899,480
Ps. 3,020,853
4. Derivative financial instruments
The Company designated the forwards and combined derivative financial instruments as cash
flow hedges. The fair value of the Companys derivative financial instruments as of
September 30, 2012 was $260,675 as further detailed below (notional amounts in millions):
Instrument
Combined derivative financial instruments
Forward
Embedded derivatives asset
Type of
hedge
Cash flow
Cash flow
Notional
US$277
US$40
September 30,
2012
Ps.232,542
(256)
28,389
Ps.260,675
Total asset
* * * * *
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