Improvement in pricing and volume in several of our regions as well as the continued success of our transformation effort has led to the highest operating EBITDA margin in almost 3 years. Infrastructure and housing continued to be the main drivers of demand for our products.Regarding our consolidated volumes, we had strong contribution from our U.S., South, Central America and the Caribbean and Asia regions. In the case of Columbia, Panama and the Philippines, we sold record cement volumes during the first half of the year. The favorable volumes from these regions partially mitigated the declines we experienced in Mexico, Northern Europe and the Mediterranean regions. Prices for domestic gray cement and the ready mix were stable sequentially in local currency terms with aggregates prices down 2%. Although we are substantially recovering short-term input cost inflation, we continue to be at levels below our targeted return on capital employed. On this front, as an important component of our transformation, we are introducing an initiative that will drive a change in our business mindset, executing a value before volume strategy. This means that we will be focusing on value enhancement, efficiency gains in our customer relationships, ensuring sustainability of our products and generating returns sufficient for reinvestments. Under this strategy, we will establish our own internal procedures, guidelines, standards, principles and tools, which will support our approach to cement pricing. We aim to recover our cost and obtain an adequate return on investment in our cement business. Experiences from our cement pricing approach will be transferred to our ready mix and aggregates business in due course. This initiative is global in scope, and in Europe, we are in the implementation phase, while in all other regions, we are in the evaluation stage. In Europe, a new price system following a gross minus logic will be introduced to determine prices and to ensure consistent price differentiation to customers. Furthermore, in order to deal with input cost volatility, we will introduce surcharges like transportation fuel and environmental costs depending on the country.
In addition to that and in order to address the value of our services, we will charge for special services according to pay-per-use principal. To adapt to market dynamics, pricing cycles will be revised. A close price follow-up will ensure a consistent approach throughout the organization.A revision of the sales reward systems and training program is launched in order to support the implementation. On the financing side, we have announced an exchange offered and consent request to the participants under the financing agreement, which will expire on August 20. Some of the key elements of this offer are: a 3-year extension of the final maturity until February 2017; the offer includes an exchange of up to $500 million into new high-yield bonds maturing in June 2018; an upfront fee and revised margin; a $1 billion pay down in March 2013; an enhanced guarantor package and revised operational and financial covenants. It is too early to provide feedback on this process, but as you know, we have long-standing relationships with the participants in the financing agreement, and this has been noticeable in the conversations that we have been having with them. We continue to maintain sufficient liquidity to support our operations and expect to remain in compliance with our financial obligations. Our consolidated funded debt-to-EBITDA ratio as of the end of June was 6.15x, well inside the covenant [ph] level. We remain focused on our transformation program. We continue to anticipate an incremental improvement of $200 million in our steady-state EBITDA during 2012. During the first half of the year, we achieved about $180 million of this improvement. We expect to reach the run rate of $400 million by the end of the year. Another important driver of our transformation process is our efforts to increase the use of alternative fuels. The substitution rate will reach 26% during the second quarter and 29% during the month of June.
Earlier this month, we announced the successful global integration of our new business platform based on SAP. The deployment was achieved in record time and cost across all of our operations in over 50 countries. With an increasingly complex operating environment in the building materials industry, we adopted the best technology available which is scalable and quickly adaptable to ever-changing market conditions. This new platform provides real-time data for more critical processes and functions, helping us to integrate our core cement, ready mix and aggregate businesses into a single solution that serves our customers with greater speed, precision and quality.Read the rest of this transcript for free on seekingalpha.com