here - Ayala

Globe 2012 annual report
financial report
Tranche A is repayable semi-annually on a pari passu basis up to December 31, 2023 based on a table of debt
reduction computed at certain percentages of the principal. Tranche B is a non-interest bearing convertible
debt and to be repaid only if there are sufficient future cash flows and upon full repayment of Tranche A. At the
conclusion of the rehabilitation period, other than as the result of an event of default, Tranche B to the extent
not previously converted is to be converted into new BTI shares. The conversion rights in relation to Tranche B
are up to a maximum of 40% of the authorized share capital as at the effective date. The loans were initially
accounted for at fair value, and the entire acquisition price was allocated to Tranche A.
As of December 31, 2012, loans receivable from BTI amounted to P=4.90 billion comprising of principal and
interest due until 2023, with quarterly interest payments and semi-annual principal payments.
As of February 5, 2013, Globe Telecom did not exercise any of the conversion rights attached to Tranche B.
12. Accounts Payable and Accrued Expenses
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Accrued project costs 25.3 P=11,400,188 P=6,906,943 P=8,638,119
Accounts payable 16 8,837,714 7,314,069 5,617,380
Accrued expenses 16, 18.2 7,020,572 5,995,940 5,587,799
Traffic settlements - net 4 2,374,154 2,722,809 2,172,426
Output VAT 69,841 67,458 99,479
Dividends payable 17.3 33,145 35,295 –
P=29,735,614 P=23,042,514 P=22,115,203
The “Accrued expenses” account includes accruals for services, advertising, manpower and various general,
selling and administrative expenses.
Traffic settlements payable are presented net of traffic settlements receivable from the same carrier amounting
to P=3,318.91 million, P=2,372.03 million and P=2,335.95 million as of December 31, 2012, 2011 and 2010,
respectively.
As of December 31, 2012, Globe and EGG reported net output VAT amounting to P=69.84 million, net of input
VAT of P=558.95 million. As of December 31, 2011, Globe and EGG reported net output VAT amounting to
P=67.46 million, net of input VAT of P=458.67 million. As of December 31, 2010, Globe Telecom reported net
output VAT amounting to P=99.48 million, net of input VAT of P=359.93 million.
13. Provisions
The rollforward analysis of this account follows:
Note 2012 2011 2010
(In Thousand Pesos)
At beginning of year P=166,773 P=224,388 P=89,404
Provisions for (reversals of) claims and
assessments 23 56,327 (47,916) 138,760
Payments (19,909) (9,699) (3,776)
At end of year P=203,191 P=166,773 P=224,388
Provisions relate to various pending unresolved claims and assessments over the Globe Group’s mobile and
wireline businesses. The information usually required by PAS 37, Provisions, Contingent Liabilities and
Contingent Assets, is not disclosed as it may prejudice the outcome of these on-going claims and assessments.
As of February 5, 2013, the remaining pending claims and assessments are still being resolved.
14. Notes Payable and Long-term Debt
Notes payable consist of short-term, unsecured US dollar and peso-denominated promissory notes from local
banks for working capital requirements amounting to P=2,053.90 million, which bears interest ranging from 1.12%
to 1.65% and P=1,756.76 million, which bears interest ranging from 1.57% to 1.91% as of December 31, 2012
and 2011, respectively. There is no outstanding notes payable as of December 31, 2010.
Long-term debt consists of:
2012 2011 2010
(In Thousand Pesos)
Banks:
Local P=38,164,986 P=27,555,234 P=20,352,194
Foreign 5,829,588 3,541,621 7,317,483
Corporate notes 5,819,400 10,839,226 17,729,939
Retail bonds 9,911,546 4,985,865 4,971,854
59,725,520 46,921,946 50,371,470
Less current portion 9,294,888 9,597,367 8,677,209
P=50,430,632 P=37,324,579 P=41,694,261
The maturities of long-term debt at nominal values, excluding unamortized debt issuance costs, as of
December 31, 2012 follow (amounts in thousands):
Due in:
2013 P=9,731,079
2014 6,737,634
2015 8,497,945
2016 2,669,850
2017 and thereafter 32,403,080
P=60,039,588
Unamortized debt issuance costs included in the above long-term debt as of December 31, 2012, 2011 and
2010 amounted to P=314.07 million, P=212.03 million and P=279.24 million, respectively (see Note 28.2.3).
Total interest expense recognized, excluding the capitalized interest, amounted to P=2,086.08 million,
P=2,059.66 million and P=1,981.79 million in 2012, 2011 and 2010, respectively (see Notes 7 and 22).
The interest rates and maturities of the above debt are as follows:
Maturities
Interest Rates
Banks:
Local 2013–2022 1.19% to 7.03% in 2012
1.42% to 7.03% in 2011
5.26% to 7.03% in 2010
Foreign 2013–2022 1.83% to 4.19% in 2012
0.68% to 3.86% in 2011
0.74% to 4.13% in 2010
Corporate notes 2013–2016 1.83% to 8.43% in 2012
2.78% to 8.43% in 2011
5.52% to 8.38% in 2010
Retail bonds 2017–2019 5.75% to 6.00% in 2012
7.50% to 8.00% in 2011
7.50% to 8.00% in 2010
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