2014 Financial Statement

EDC 2014 Performance Report
Located in Bacon, Sorsogon City and Manito, Albay in the Bicol region, the BMGPP package
consists of two steam field complexes. Bac-Man I power plant has two 55-MW generating units
(Unit 1 and Unit 2) while Bac-Man II power plant has one 20-MW generating units (Unit 3). EDC
supplies the steam that fuels these power plants.
Problems with the equipment at both Bac-Man I and Bac-Man II power plants required the
Company to conduct a series of rehabilitation works since the acquisition of the power plants in
2010. Units 1, 2 and 3 became available for use on January 28, 2014, June 3, 2014 and
October 1, 2013, respectively.
In 2014 and 2013, the Company capitalized borrowing costs amounting to ₱9.5 million and
₱144.0 million from general borrowings using a capitalization rate of 6.50% and 6.43%,
respectively.
Since 2011, testing procedures had been performed in preparation for planned commercial
operations of the power plants. In 2013, revenue from electricity generated during
the testing period amounting to ₱1,401.5 million was offset against the cost of property, plant and
equipment. No borrowing costs were incurred in 2014.
Total revenue generated by Units 1, 2 and 3 in 2014 during their commercial operations (i.e., being
available for use as intended by management) amounted to ₱3,036.5 million while revenue
generated by Unit 3 in 2013 during its commercial operations amounted to ₱189.9 million.
Revenues earned during commercial operations were presented as part of the “Revenue from sale
of electricity” account in the 2013 consolidated statements of income.
On October 2014, turbine retrofitting were completed, increasing the capacity of Unit 2 to 60 MW.
As of date, Unit 1 is undergoing turbine retrofitting to increase capacity to 60 MW, its estimated
completion is on February 2015.
Impact of Typhoons
In November 2013, certain assets of the Company located in Leyte sustained damage due to
Typhoon Yolanda. As a result, in 2013, the Company recognized loss amounting to
₱625.0 million which comprised of the carrying amount of the damaged property, plant and
equipment at ₱519.5 million and the value of damaged inventories at ₱105.5 million.
In 2014 and 2013, total rehabilitation costs capitalized as part of property, plant and equipment
amounted to ₱815.1 million and ₱303.9 million, respectively while the costs of repairs and minor
construction activities charged to expense amounted to ₱94.7 million and ₱2.7 million in 2014 and
2013, respectively.
The Company received insurance proceeds relating to property damaged caused by Typhoon
Yolanda amounting to ₱386.2 million and ₱77.3 million for the years ended December 31, 2014
and 2013, respectively. Proceeds from insurance received in 2014 were presented under the
“Other income (charges)” account in the consolidated statement of income whereas in 2013,
proceeds from insurance were offset against the “Costs of sale of electricity” account also in the
consolidated statement of income (see Note 21).
In July 2014, Typhoon Glenda caused damaged to certain assets of the Company located in Albay,
Sorsogon and Leyte. Insurance proceeds received by the Company for compensation on property
damaged amounting to ₱52.1 million was offset against the “Costs of sale of electricity” account
(Note 21).
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