here - Ayala

Globe 2012 annual report
financial report
The table below provides information regarding the credit risk exposure of the Globe Group by classifying
assets according to the Globe Group’s credit ratings of receivables as of December 31. The Globe
Group’s credit rating is based on individual borrower characteristics and their relationship to credit event
experiences.
2012
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P=725,362 P=257,307 P=91,505 P=1,074,174
Key corporate accounts 1,092 156 30 1,278
Other corporations and SME 100,336 42,378 46,844 189,558
826,790 299,841 138,379 1,265,010
Wireline receivables:
Consumer 218,599 29,968 1 248,568
Key corporate accounts 77,572 5,061 33 82,666
Other corporations and SME 52,600 3,646 203 56,449
348,771 38,675 237 387,683
Total P=1,175,561 P=338,516 P=138,616 P=1,652,693
2011
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P=389,075 P=188,526 P=90,874 P=668,475
Key corporate accounts 7,007 1,202 43,037 51,246
Other corporations and SME 156,570 27,688 104,554 288,812
552,652 217,416 238,465 1,008,533
Wireline receivables:
Consumer 212,613 29,258 – 241,871
Key corporate accounts 51,643 3,010 8 54,661
Other corporations and SME 56,058 6,120 175 62,353
320,314 38,388 183 358,885
Total P=872,966 P=255,804 P=238,648 P=1,367,418
2010
Neither past-due nor impaired
High Quality Medium Quality Low Quality Total
(In Thousand Pesos)
Wireless receivables:
Consumer P=280,831 P=64,889 P=176,051 P=521,771
Key corporate accounts 9,817 1,183 8,975 19,975
Other corporations and SME 60,842 4,358 64,370 129,570
351,490 70,430 249,396 671,316
Wireline receivables:
Consumer 196,067 39,413 – 235,480
Key corporate accounts 11,843 154 – 11,997
Other corporations and SME 70,118 7,512 308 77,938
278,028 47,079 308 325,415
Total P=629,518 P=117,509 P=249,704 P=996,731
The following is a reconciliation of the changes in the allowance for impairment losses for receivables as of
December 31 (in thousand pesos) (see Notes 4 and 23):
Subscribers
Other
corporations
and SME
2012
Traffic
Settlements
and Others
Consumer
Key corporate
accounts
Non-trade
(Note 6) Total
At beginning of year P=2,433,222 P=263,464 P=434,603 P=249,341 P=88,356 P=3,468,986
Charges for the year 1,121,634 85,006 173,994 (20,485) 17,168 1,377,317
Reversals/write offs/ adjustments (1,101,590) (28,066) (65,253) (7,798) 18,558 (1,184,149)
At end of year P=2,453,266 P=320,404 P=543,344 P=221,058 P=124,082 P=3,662,154
Subscribers
Other
corporations
and SME
2011
Traffic
Settlements
and Others
Consumer
Key corporate
accounts
Non-trade
(Note 6)
Total
At beginning of year P=1,677,691 P=245,622 P=250,599 P=279,532 P=21,045 P=2,474,489
Charges for the year 1,093,575 57,449 235,782 84,306 102,540 1,573,652
Reversals/write offs/ adjustments (338,044) (39,607) (51,778) (114,497) (35,229) (579,155)
At end of year P=2,433,222 P=263,464 P=434,603 P=249,341 P=88,356 P=3,468,986
Subscribers
Other
corporations
and SME
2010
Traffic
Settlements
and Others
Consumer
Key corporate
accounts
Non-trade
(Note 6)
Total
At beginning of year P=820,403 P=176,973 P=165,416 P=188,199 P=34,776 P=1,385,767
Charges for the year 987,636 81,395 124,549 91,333 620 1,285,533
Reversals/write offs/ adjustments (130,348) (12,746) (39,366) – (14,351) (196,811)
At end of year P=1,677,691 P=245,622 P=250,599 P=279,532 P=21,045 P=2,474,489
28.2.3 Liquidity Risk
The Globe Group seeks to manage its liquidity profile to be able to finance capital expenditures and service
maturing debts. To cover its financing requirements, the Company intends to use internally generated
funds and available long-term and short-term credit facilities. As of December 31, 2012, 2011 and 2010,
Globe Group has available uncommitted short-term credit facilities of USD36.40 million and P=10,720.00
million, USD76.00 million and P=8,170.00 million, and USD59.00 million and P=11,017.40 million,
respectively.
As of December 31, 2012, the Globe Group has fully drawn all of its committed long-term facilities.
As part of its liquidity risk management, the Globe Group regularly evaluates its projected and actual cash
flows. It also continuously assesses conditions in the financial markets for opportunities to pursue fund
raising activities, in case any requirements arise. Fund raising activities may include bank loans, export
credit agency facilities and capital market issues.
High quality accounts are accounts considered to be high value and have consistently exhibited good
paying habits. Medium quality accounts are active accounts with propensity of deteriorating to mid-range
age buckets. These accounts do not flow through to permanent disconnection status as they generally
respond to credit actions and update their payments accordingly. Low quality accounts are accounts which
have probability of impairment based on historical trend. These accounts show propensity to default in
payment despite regular follow-up actions and extended payment terms. Impairment losses are also
provided for these accounts based on net flow rate.
Traffic receivables that are neither past due nor impaired are considered to be high quality given the
reciprocal nature of the Globe Group’s interconnect and roaming partner agreements with the carriers and
the Globe Group’s historical collection experience.
Other receivables are considered high quality accounts as these are substantially from credit card
companies and Globe dealers.
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