EDC PR 2016 (FS section)

Financial Statement
The net movement of fair value changes made to “Fair value adjustments on hedging transactions”
account for the Company’s cash flow hedges is as follows:
2016 2015
Balance at beginning of the year (₱177,500,756) (₱178,182,172)
Changes in fair value of the cash flow hedges 353,233,197 259,449,991
175,732,441 81,267,819
Transferred to consolidated statement of income
Foreign exchange gain (113,635,000) (175,500,000)
Interest expense (76,224,387) (94,741,473)
(189,859,387) (270,241,473)
Balance before tax (14,126,946) (188,973,654)
Tax 15,112,893 11,472,898
Balance at end of the year ₱985,947 (₱177,500,756)
Fair Value Changes of Derivatives
The table below summarizes the net movement in fair values of the Parent Company’s derivatives
as of December 31, 2016 and 2015.
2016 2015
Balance at beginning of the year ₱149,142,762 (₱15,565,756)
Net changes in fair value of derivatives:
Designated as accounting hedges 412,616,371 259,449,991
412,616,371 259,449,991
Fair value of settled instruments:
Designated as accounting hedges (76,224,387) (94,741,473)
Not designated as accounting hedges – –
(76,224,387) (94,741,473)
Balance at end of the year ₱485,534,746 ₱149,142,762
Presented as:
Derivative assets ₱587,281,375 ₱351,612,199
Derivative liabilities (101,746,629) (202,469,437)
₱485,534,746 ₱149,142,762
The effective portion of the changes in the fair value of the NDCCS designated as accounting
hedges were deferred in equity under “Fair value adjustments on hedging transactions” account.
Capital Management
The primary objective of the Company’s capital management is to ensure that it maintains a
healthy capital ratio in order to comply with its financial loan covenants and support its business
operations. Core capital includes long-term debt and equity.
The Company manages and makes adjustment to its capital structure as it deems necessary.
To maintain or adjust its capital structure, the Company may increase the levels of capital
contributions from its creditors and owners/shareholders through debt and new shares issuance,
respectively. No significant changes have been made in the objectives, policies and processes of
the Company in 2016, 2015 and 2014.
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