EDC 2014 SR (UPDATED)
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<strong>EDC</strong> <strong>2014</strong> Performance Report<br />
As of December 31, <strong>2014</strong> and 2013, the Company is able to meet its capital management<br />
objectives.<br />
32.<br />
Commitments and Contingencies<br />
Stored Energy<br />
In 1996 and 1997, the Parent Company entered into Addendum Agreements to the PPA related to<br />
the Unified Leyte power plants where any excess generation above the nominated energy or<br />
take-or-pay volume will be credited against payments made by NPC for the periods it was not able<br />
to accept electricity delivered by <strong>EDC</strong> (see Note 34). As of December 31, <strong>2014</strong> and 2013, the<br />
commitment for stored energy is equivalent to 4,326.6 GWH.<br />
Lease Commitments<br />
Future minimum lease payments under the operating leases as of December 31, <strong>2014</strong> and 2013 are<br />
as follows:<br />
<strong>2014</strong> 2013<br />
Within one year ₱93.1 million ₱99.3 million<br />
After one year but not more than five years 89.4 million 204.3 million<br />
Total ₱182.5 million ₱303.6 million<br />
The Company’s lease commitments pertain to rentals on the drilling rigs, head office and various<br />
office space and warehouse for steam/electricity projects in Leyte, Northern Negros, Albay,<br />
Sorsogon, Southern Negros and Mindanao. Rent expense amounted to ₱610.9 million,<br />
₱498.2 million, and ₱601.3 million in <strong>2014</strong>, 2013 and 2012, respectively.<br />
Purchase Commitments<br />
Total purchase commitments for capital items as of December 31, <strong>2014</strong> and 2013 amounted to<br />
₱5,674.4 million and ₱11,820.0 million, respectively, of which, contractual commitments for the<br />
acquisitions of property, plant and equipment amounted to ₱3,213.9 million and ₱11,820.0 million<br />
as December 31, <strong>2014</strong> and 2013, respectively. These are expected to be settled in the next<br />
financial year.<br />
Legal Claims<br />
The Company is contingently liable for lawsuits or claims filed by third parties, including labor<br />
related cases, which are pending decision by the courts, the outcomes of which are not presently<br />
determinable. In the opinion of management and its legal counsel, the eventual total liability from<br />
these lawsuits or claims, if any, will not have a material effect on the consolidated financial<br />
statements (see Notes 3 and 18).<br />
249
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