here - Ayala

Globe 2012 annual report
financial report
The funded status for the pension plan of Globe Group is as follows:
2012 2011 2010
(In Thousand Pesos)
Present value of benefit obligation P=3,434,339 P=2,720,266 P=2,186,228
Fair value of plan assets (2,593,117) (2,376,680) (2,355,730)
841,222 343,586 (169,502)
Unrecognized net actuarial losses (1,512,304) (1,215,686) (781,014)
Asset recognized in the consolidated statements
of financial position* (P=671,082) (P=872,100) (P=950,516)
* This amount consists of P=672.57 million, P=873.26 million and P=951.08 million included in “Other noncurrent assets”
account and P=1.49 million, P=1.16 million and P=0.57 million included in “Accrued expenses” under “Accounts payable and
accrued expenses” account as of December 31, 2012, 2011 and 2010, respectively (see Note 12).
The following tables present the changes in the present value of defined benefit obligation and fair value of plan
assets:
Present value of defined benefit obligation
2012 2011 2010
(In Thousand Pesos)
Balance at beginning of year P=2,720,266 P=2,186,228 P=2,079,316
Current service cost 282,062 199,555 245,766
Interest cost 165,541 150,463 181,638
Benefits paid (116,063) (90,945) (167,620)
Transfers out (20,217) (9,334) –
Actuarial losses (gains) 402,750 284,299 (152,872)
Balance at end of year P=3,434,339 P=2,720,266 P=2,186,228
Fair value of plan assets
2012 2011 2010
(In Thousand Pesos)
Balance at beginning of year P=2,376,680 P=2,355,730 P=2,334,772
Expected return 235,140 259,605 232,747
Contributions 92,441 16,151 137,287
Benefits paid (116,063) (90,945) (167,620)
Asset transfer (20,217) (9,334) –
Actuarial gain (losses) 25,136 (154,527) (181,456)
Balance at end of year P=2,593,117 P=2,376,680 P=2,355,730
The recommended contribution for the Globe Group retirement fund for the year 2013 amounted to
P=118.93 million. This amount is based on the Globe Group’s actuarial valuation report as of
December 31, 2012.
As of December 31, 2012, 2011 and 2010, the allocation of the fair value of the plan assets of the Globe Group
follows:
2012 2011 2010
Investments in fixed income securities:
Corporate 15.06% 14.16% 12.66%
Government 24.75% 28.85% 20.96%
Investments in equity securities 58.48% 54.48% 63.89%
Others 1.71% 2.51% 2.49%
The assumptions used to determine pension benefits of Globe Group are as follows:
2012 2011 2010
Discount rate 6.25% 6.25% 8.50%
Expected rate of return on plan assets 10.00% 10.00% 10.00%
Salary rate increase 4.50% 4.50% 6.00%
In 2012, 2011 and 2010, the Globe Group applied a single weighted average discount rate that reflects the
estimated timing and amount of benefit payments.
The overall expected rate of return on plan assets is determined based on the market prices prevailing on that
date, applicable to the period over which the obligation is to be settled.
Amounts for the current and previous four years are as follows:
2012 2011 2010 2009 2008
(In Thousand Pesos)
Present value of defined benefit
obligation P=3,434,339 P=2,720,266 P=2,186,228 P=2,079,316 P=1,319,742
Fair value of plan assets 2,593,117 2,376,680 2,355,730 2,334,772 2,344,764
Deficit (surplus) 841,222 343,586 (169,502) (255,456) (1,025,022)
Experience adjustments:
Gain (loss) on plan liabilities (P=89,538) P=343,102 (P=23,901) P=18,390 (P=51,340)
Gain (loss) on plan assets 25,136 (154,527) (181,456) (114,327) (272,539)
19. Interest Income
Interest income is earned from the following sources:
Notes 2012 2011 2010
(In Thousand Pesos)
Short-term placements 30 P=316,894 P=188,557 P=90,889
Cash in banks 30 17,097 8,025 23,121
Loans receivable 11, 16.3
BTI 138,385 – –
GGRP 76,273 76,056 78,766
BHI 24,818 24,750 25,756
Others 6,384 – –
P=579,851 P=297,388 P=218,532
20. Other Income
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Foreign exchange gain - net 22, 28.2.1.2 P=318,334 P=– P=465,373
Lease income 25.4, 25.1.b 172,499 172,499 P=173,261
Gain on derivative instruments 28 – 25,495 –
Others 225,538 376,774 218,307
P=716,371 P=574,768 P=856,941
The peso to US dollar exchange rates amounted to P=41.078, P=43.919 and P=43.811 as of December 31, 2012,
2011 and 2010, respectively.
In 2011, net foreign exchange loss amounting to P=308.65 million was presented as part of “Financing costs”
account in the consolidated statements of comprehensive income (see Note 22).
The Globe Group’s net foreign currency-denominated liabilities amounted to USD161.22 million,
USD188.97 million and USD267.77 million as of December 31, 2012, 2011 and 2010, respectively
(see Note 28.2.1.2).
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