2014 Financial Statement
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EDC <strong>2014</strong> Performance Report<br />
<strong>2014</strong> 2013 2012<br />
Effect on Profit<br />
or Loss<br />
Effect<br />
on Equity<br />
Effect on<br />
Profit or Loss<br />
Effect<br />
on Equity<br />
Effect on<br />
Profit or Loss<br />
Effect<br />
on Equity<br />
Increase<br />
(Decrease)<br />
Increase<br />
(Decrease)<br />
Increase<br />
(Decrease)<br />
Increase<br />
(Decrease)<br />
Increase<br />
(Decrease)<br />
Increase<br />
(Decrease)<br />
<strong>Financial</strong> assets at FVPL<br />
Net fair value changes of<br />
forward contracts ₱7,517,980 ₱− ₱14,243,178 ₱− (₱4,131,240) ₱–<br />
Derivatives designated as cash<br />
flow hedges<br />
Cumulative translation<br />
adjustment ₱– (₱122,566,454) ₱– ₱88,810,758 ₱– (₱144,426,476)<br />
<strong>Financial</strong> liabilities at<br />
amortized cost<br />
Interest expense on (Note 24):<br />
Long-term debts, including<br />
amortization of<br />
transaction costs (₱3,713,109,302) ₱– (₱3,352,638,769) ₱– (₱3,656,390,728) ₱–<br />
Royalty fee payable – – – – (10,945,030) –<br />
Loan payable and others – – – – (59,822) –<br />
Loss on extinguishment of debt<br />
(Note 26) – – – – (188,145,763) –<br />
(₱3,713,109,302) ₱– (₱3,352,638,769) ₱– (₱3,855,541,343) ₱–<br />
Derivative <strong>Financial</strong> Instruments<br />
The Company engages in derivative transactions, particularly foreign currency swaps, foreign<br />
currency forwards, currency swaps and interest rate swaps to manage its foreign currency risk<br />
and/or interest rate risk arising from its foreign-currency denominated loans. These derivatives are<br />
accounted for either as derivatives designated as accounting hedges or derivatives not designated<br />
as accounting hedges.<br />
The table below shows the derivative financial instruments of the Company:<br />
Derivative<br />
Assets<br />
Derivatives Not Designated as Accounting Hedges<br />
<strong>2014</strong> 2013<br />
Derivative Derivative<br />
Liabilities Assets<br />
Derivative<br />
Liabilities<br />
Derivatives designated as<br />
accounting hedges<br />
Cross-currency swaps ₱154,169,144 ₱− ₱53,583,080 ₱4,198,322<br />
Interest rate swaps – 169,734,900 – –<br />
Derivatives not designated as<br />
accounting hedges<br />
Foreign currency swap contracts – – 7,547,021 –<br />
Total derivatives ₱154,169,144 ₱169,734,900 ₱61,130,101 ₱4,198,322<br />
Presented as:<br />
Current ₱22,024,164 ₱3,394,698 ₱14,244,905 ₱524,790<br />
Noncurrent 132,144,980 166,340,202 46,885,196 3,673,532<br />
Total derivatives ₱154,169,144 ₱169,734,900 ₱61,130,101 ₱4,198,322<br />
A. Foreign Currency Swap Contracts<br />
A foreign currency swap is an agreement to exchange amounts in different currencies based on the<br />
spot rate at trade date and to re-exchange the same currencies at a future date based on an agreed<br />
rate.<br />
In 2013, the Company entered into a total of 22 foreign currency swap contracts with aggregate<br />
notional amount of US$105.6 million and an average forward rate of ₱44.0.<br />
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