here - Ayala

Globe 2012 annual report
financial report
These combinations of net liability movements and peso rate depreciation/appreciation resulted in foreign
exchange loss in 2011 and foreign exchange gains in 2010, respectively (see Note 22).
The “Others” account includes insurance claims and other items that are individually immaterial.
21. General, Selling and Administrative Expenses
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Selling, advertising and promotions P=6,440,554 P=4,756,425 P=4,268,843
Staff costs 16.5, 18 6,428,508 5,809,831 5,088,990
Professional and other contracted services 16 5,193,217 4,214,284 3,587,635
Utilities, supplies and other administrative
expenses 5 4,260,773 3,804,762 3,338,608
Repairs and maintenance 16 3,672,038 3,522,778 3,272,514
Rent 16, 25 3,153,505 2,830,382 2,808,906
Taxes and licenses 1,595,842 1,380,270 1,175,417
Insurance and security services 1,330,648 1,381,633 1,701,258
Courier, delivery and miscellaneous expenses 1,055,375 1,116,181 984,274
Others 473,868 487,917 465,659
P=33,604,328 P=29,304,463 P=26,692,104
The “Others” account includes various other items that are individually immaterial.
22. Financing Costs
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Interest expense - net* 7, 14 P=2,086,078 P=2,059,660 P=1,981,785
Swap and other financing costs - net 183,007 211,404 58,321
Loss on derivative instruments 28 74,810 – 28,295
Foreign exchange loss - net 20, 28.2.1.2 – 308,650 –
P=2,343,895 P=2,579,714 P=2,068,401
*This account is net of the amount capitalized borrowing costs (see Note 7).
In 2012 and 2010, net foreign exchange gain amounting to P=318.33 million and P=465.37 million, respectively
were presented as part of “Other income - net” account in the consolidated statements of comprehensive
income (see Note 20).
In 2011, gain on derivative instruments amounting to P=25.50 million was presented as part of “Other income -
net” account in the consolidated statements of comprehensive income (see Note 20).
Interest expense - net is incurred on the following:
Notes 2012 2011 2010
(In Thousand Pesos)
Long-term debt 14 P=1,657,862 P=1,762,501 P=1,658,291
Accretion expense 15, 25.4 168,707 167,445 162,002
Amortization of debt issuance cost 14 103,497 116,618 110,570
Short term notes payable 14 82,047 3,823 39,237
Others 73,965 9,273 11,685
P=2,086,078 P=2,059,660 P=1,981,785
23. Impairment Losses and Others
This account consists of:
Notes 2012 2011 2010
(In Thousand Pesos)
Impairment loss on:
Receivables 4, 6, 28.2.2 P=1,377,317 P=1,599,967 P=1,285,533
Property and equipment and intangible
assets 259,262 128,614 63,126
Provisions for (reversal of):
Inventory obsolescence and market
decline 5 170,678 237,918 42,115
Other claims and assessments 13 56,327 (47,916) 138,760
P=1,863,584 P=1,918,583 P=1,529,534
24. Income Tax
The significant components of the deferred income tax assets and liabilities of the Globe Group represent the
deferred income tax effects of the following:
2012 2011 2010
(In Thousand Pesos)
Deferred income tax assets on:
Allowance for impairment losses on receivables P=1,081,543 P=1,033,282 P=737,311
Unearned revenues already subjected to income tax 730,079 760,762 744,504
ARO 440,857 406,953 374,106
Accumulated impairment losses on property
and equipment 183,072 126,247 98,389
Accrued rent expense under PAS 17 109,237 112,842 120,753
Inventory obsolescence and market decline 103,196 98,752 43,265
Accrued vacation leave 103,110 90,788 84,168
Unrealized loss on derivative transactions 72,070 77,056 67,793
Provisions for claims and assessments 68,496 56,632 73,592
Cost of share-based payments 44,236 13,208 5,819
NOLCO (see Note 3.2.7) 15,005 1,012 13,499
Allowance for doubtful accounts for long-outstanding
net advances 12,654 8,980 –
MCIT (see Note 3.2.7) 2,176 – 954
Unrealized foreign exchange losses 1,108 125 125
Others 25,672 – –
2,992,511 2,786,639 2,364,278
Deferred income tax liabilities on:
Excess of accumulated depreciation and
amortization of Globe Telecom equipment for
tax reporting (a) over financial reporting (b) 2,946,566 4,382,211 4,799,099
Undepreciated capitalized borrowing costs already
claimed as deduction for tax reporting 1,553,478 1,324,137 1,166,689
Unrealized foreign exchange gain 144,476 167,834 279,037
Prepaid pension 24,981 33,658 23,059
Unamortized discount on noninterest bearing liability 7,910 22,277 39,718
Interest accretion 6,382 – –
Customer contracts of acquired company 858 4,870 6,572
Others 15,390 15,396 –
4,700,041 5,950,383 6,314,174
Net deferred income tax liabilities P=1,707,530 P=3,163,744 P=3,949,896
(a) Sum-of-the-years digit method
(b) Straight-line method
Net deferred tax assets and liabilities presented in the consolidated statements of financial position on a net
basis by entity are as follows:
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