here - Ayala

Globe 2012 annual report
financial report
The Globe Group also determines the cost of equity-settled transactions using assumptions on the
appropriate pricing model. Significant assumptions for the cost of share-based payments include, among
others, share price, exercise price, option life, expected dividend and expected volatility rate.
Cost of share-based payments in 2012, 2011 and 2010 amounted to P=11.50 million, P=49.34 million and
P=104.79 million, respectively (see Notes 16.5 and 18.1).
The Globe Group also estimates other employee benefit obligations and expenses, including cost of paid
leaves based on historical leave availments of employees, subject to the Globe Group’s policy. These
estimates may vary depending on the future changes in salaries and actual experiences during the year.
The accrued balance of other employee benefits (included in the “Accounts payable and accrued
expenses” account and in the “Other long-term liabilities” account in the consolidated statements of
financial position) as of December 31, 2012, 2011 and 2010 amounted to P=484.60 million, P=434.04 million
and P=406.14 million, respectively (see Notes 12 and 15).
While the Globe Group believes that the assumptions are reasonable and appropriate, significant
differences between actual experiences and assumptions may materially affect the cost of employee
benefits and related obligations.
4. Receivables
This account consists of receivables from:
Notes 2012 2011 2010
(In Thousand Pesos)
Subscribers 16, 28.2.2 P=11,508,305 P=10,245,268 P=8,038,451
Traffic settlements - net 12, 16, 28.2.2 2,611,358 2,291,862 2,130,238
Dealers 28.2.2 844,838 677,270 455,238
Others 28.2.2 679,008 285,735 203,640
15,643,509 13,500,135 10,827,567
Less allowance for impairment losses:
Subscribers 28.2.2 3,317,014 3,131,289 2,173,912
Traffic settlements and others 28.2.2 221,058 249,341 279,532
3,538,072 3,380,630 2,453,444
P=12,105,437 P=10,119,505 P=8,374,123
Subscriber receivables arise from wireless and wireline voice, data communications and broadband internet
services provided under postpaid arrangements.
Amounts collected from wireless subscribers under prepaid arrangements are reported under “Unearned
revenues” in the consolidated statements of financial position and recognized as revenues upon actual usage of
airtime value or upon expiration of the prepaid credit. The unearned revenues from these subscribers amounted
to P=2,502.90 million, P=2,474.14 million and P=2,402.75 million as of December 31, 2012, 2011 and 2010,
respectively.
Traffic settlements receivable are presented net of traffic settlements payable from the same carrier amounting
to P=3,503.52 million, P=3,838.82 million and P=4,099.08 million as of December 31, 2012, 2011 and 2010,
respectively.
Receivables are noninterest-bearing and are generally collectible in the short-term.
5. Inventories and Supplies
This account consists of:
2012 2011 2010
(In Thousand Pesos)
At cost:
Spare parts and supplies P=6,142 P=3,068 P=1,454
SIM cards and SIM packs 29 20 –
Handsets, devices and accessories – 1,931 98
Modems and accessories – – 592,709
Call cards and others 508 2,905 22,244
6,679 7,924 616,505
At NRV:
Handsets, devices and accessories 1,139,463 1,016,844 518,145
Modems and accessories 375,037 451,727 240,578
Spare parts and supplies 246,103 273,911 298,331
Tattoo 62,639 31,140 27,738
SIM cards and SIM packs 36,160 55,930 42,928
Call cards and others 210,095 73,714 95,108
2,069,497 1,903,266 1,222,828
P=2,076,176 P=1,911,190 P=1,839,333
Inventories recognized as expense during the year amounting to P=7,849.04 million, P=6,142.34 million and
P=4,281.08 million in 2012, 2011 and 2010, respectively, are included as part of “Cost of sales” and “Impairment
losses and others” accounts (see Note 23) in the consolidated statements of comprehensive income. An
insignificant amount is included under “General, selling and administrative expenses” as part of “Utilities,
supplies and other administrative expenses” account (see Note 21).
Cost of sales incurred consists of:
2012 2011 2010
(In Thousand Pesos)
Handsets, devices and accessories P=6,565,510 P=4,928,921 P=3,185,163
Tattoo 561,310 545,354 597,430
SIM cards and SIM packs 245,462 245,418 274,882
Modems and accessories 73,407 89,423 141,272
Spare parts and supplies 4,472 1,440 13,164
Call cards and others 228,198 77,033 27,049
P=7,678,359 P=5,887,589 P=4,238,960
There are no unusual purchase commitments and accrued net losses as of December 31, 2012.
6. Prepayments and Other Current Assets
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Advance payments to suppliers and
contractors 25.3 P=8,815,534 P=1,674,923 P=764,699
Prepayments 25.1 1,050,731 1,288,290 983,545
Deferred input VAT 11 527,276 730,387 951,449
Input VAT - net 638,626 844,089 954,636
Miscellaneous receivables - net 16, 28.11 425,426 662,203 455,005
Current portion of loan receivable from Bayan
Telecommunications, Inc. (BTI) 11 347,910 – –
Creditable withholding tax 300,680 295,102 494,942
Other current assets 28.11 202,065 91,425 99,922
P=12,308,248 P=5,586,419 P=4,704,198
The “Prepayments” account includes prepaid insurance, rent, maintenance, and NTC spectrum users’ fee
among others.
Deferred input VAT pertains to various purchases of goods and services which cannot be claimed yet as credits
against output VAT liabilities, pursuant to the existing VAT rules and regulations. However, these can be
applied on future output VAT liabilities.
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