2014 Financial Statement
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EDC <strong>2014</strong> Performance Report<br />
With the merger of PNB and Allied Bank in February 2013, the Company’s loan balance was<br />
consolidated under PNB. The new loan was recognized at fair value which is equivalent to its face<br />
value.<br />
Other Long-term Debts<br />
On January 31, 2012, the Parent Company fully settled its matured JP¥1.5 billion OECF 8th Yen<br />
loan amounting to ₱20.3 million.<br />
Loan Covenants<br />
The loan covenants covering the Parent Company’s and FG Hydro’s outstanding debts include,<br />
among others, maintenance of certain level of current, debt-to-equity and debt-service ratios. As<br />
of December 31, <strong>2014</strong> and 2013, the Parent Company and FG Hydro are in compliance with the<br />
loan covenants of all their respective outstanding debts.<br />
18.<br />
Provisions and Other Long-term Liabilities<br />
<strong>2014</strong> 2013<br />
Provision for rehabilitation and restoration<br />
costs (Notes 3 and 12) ₱748,459,461 ₱654,451,377<br />
Accrued sick leave and vacation leave 411,834,604 387,903,681<br />
Others (Note 3) 540,803,716 471,321,221<br />
₱1,701,097,781 ₱1,513,676,279<br />
Provision for rehabilitation and restoration costs<br />
Provision for rehabilitation and restoration costs pertains to the present value of estimated costs of<br />
legal and constructive obligations required to restore all the existing sites upon termination of the<br />
cooperation period. The nature of these restoration activities includes dismantling and removing<br />
structures, rehabilitating wells, dismantling operating facilities, closure of plant and waste sites,<br />
and restoration, reclamation and revegetation of affected areas. The obligation generally arises<br />
when the asset is constructed or the ground or environment at the site is disturbed. When the<br />
liability is initially recognized, the present value of the estimated costs is capitalized as part of the<br />
carrying amount of the related FCRS and production wells and power plants (see Note 12). In<br />
<strong>2014</strong>, EBWPC also recognized provision for restoration activities which was capitalized as part of<br />
power plants (see Note 12).<br />
The rollforward analysis of the provision for rehabilitation and restoration costs is presented<br />
below:<br />
<strong>2014</strong> 2013<br />
Provision for rehabilitation and restoration costs<br />
at beginning of year ₱654,451,377 ₱493,524,946<br />
Unwinding of discount (Note 24) 33,090,313 24,048,418<br />
687,541,690 517,573,364<br />
Effect of revision of estimate 60,917,771 136,878,013<br />
Provision for rehabilitation and restoration costs<br />
at end of year ₱748,459,461 ₱654,451,377<br />
87
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