SEC Form 17-A: Annual Report - the solid group inc website

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(d) Gain on Sale of Assets
SBC sold the Assets to SCC for a gross amount totaling to P1.1 billion. The book value of
the assets sold amounted to P827.2 million resulting in the recognition of gain on sale of
assets amounting to P267.1 million, which is presented as Gain on Sale of Assets in the 2012
statement of income (see Notes 6, 10 and 12).
28. COMMITMENTS AND CONTINGENCIES
The following are the significant commitments and contingencies involving the Group:
28.1 Operating Lease Commitments – Group as Lessor
Certain subsidiaries lease various properties for a period of one to ten years. Some of these
lease transactions are subject to 5% to 10% escalation rate. The future minimum rentals
receivable under these non-cancellable operating leases as of December 31 are as follows:
2012 2011 2010
Within one year P 114,423,915 P 85,906,404 P 84,506,562
After one year but not more
than five years 198,445,354 137,864,538 159,674,701
More than five years 3,261,256 806,905 865,866
28.2 Operating Lease Commitments – Group as Lessee
P 316,130,525 P 224,577,847 P 245,047,129
The Group is a lessee to non-cancellable operating leases on land. As of December 31, 2009,
these leases have a remaining term of 10 years, expiring in 2019. Lease payments are fixed
for the first five years. Thereafter, the lease on land is subject to 100% escalation rate every
five years while the lease on land improvements is subject to an annual escalation rate of
10%.
2012 2011 2010
Within one year P 12,490,671 P 11,131,271 P 6,984,946
After one year but not more
than five years 47,388,054 40,612,597 33,500,497
More than five years 15,858,583 25,977,359 36,195,820
P 75,737,308 P 77,721,227 P 76,681,263
Total rental expense from these operating leases amounted to P7.4 million each in 2012, 2011
and 2010, and are shown as part of Rentals under Cost of Services in the consolidated
statements of income (see Notes 18.2 and 20).