ABS-CBN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

SyCip Gorres Velayo & Co.
6760 Ayala Avenue
1226 Makati City
Philippines

Tel: (632) 891 0307

Fax: (632) 819 0872
ey.com/ph

BOA/PRC Reg. No. 0001,

December 28, 2012, valid until December 31, 2015
SEC Accreditation No. 0012-FR-3 (Group A),
November 15, 2012, valid until November 16, 2015

(Amounts in Thousands)

December 31,
2013

INDEPE NDE NT AUDITOR S R E POR T

The Stockholders and the Board of Directors
ABS-CBN Corporation
We have audited the accompanying consolidated financial statements of ABS-CBN Corporation and Subsidiaries, which comprise
the consolidated statements of financial position as at December 31, 2013 and 2012, and the consolidated statements of income,
statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in
the period ended December 31, 2013, and a summary of significant accounting policies and other explanatory information.

Managements R esponsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance
with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors R esponsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our
audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ABS-CBN
Corporation and Subsidiaries as at December 31, 2013 and 2012, and their financial performance and their cash flows for each of
the three years in the period ended December 31, 2013 in accordance with Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.

Maria Vivian C. Ruiz

Partner
CPA Certificate No. 83687
SEC Accreditation No. 0073-AR-3 (Group A),
January 18, 2013, valid until January 17, 2016
Tax Identification No. 102-084-744
BIR Accreditation No. 08-001998-47-2012,
April 11, 2012, valid until April 10, 2015
PTR No. 4225211, January 2, 2014, Makati City
February 25, 2014

December 31,
2012
(As restated Note 2)

January 1,
2012
(As restated Note 2)

ASSETS
Current Assets
Cash and cash equivalents (Note 6)
Trade and other receivables (Notes 7 and 22)
Inventories (Note 8)
Program rights and other intangible assets (Note 12)
Other current assets (Note 9)
Total Current Assets
Noncurrent Assets
Property and equipment (Notes 10, 11, 18 and 30)
Program rights and other intangible assets - net
of current portion (Note 12)
Goodwill (Notes 4 and 16)
Available-for-sale investments (Note 13)
Investment properties (Notes 10, 11 and 18)
Investments in associates and joint ventures (Note 14)
Deferred tax assets - net (Note 28)
Other noncurrent assets (Note 15)
Total Noncurrent Assets

=
P10,616,855
8,333,761
265,221
1,385,972
2,781,665
23,383,474

7,854,907
218,120
834,716
2,780,139
18,082,820

7,020,593
134,867
576,699
2,507,895
18,875,107

18,535,905

17,669,713

15,242,115

5,429,192
5,288,350
219,191
196,916
166,591
2,192,429
2,580,033
34,608,607

5,424,711
5,291,873
224,101
53,073
41,026
2,146,119
2,460,705
33,311,321

4,061,504
3,279,686
264,892
57,796
41,084
1,509,498
2,677,307
27,133,882

=
P57,992,081

P51,394,141

=
P46,008,989

P11,332,006
1,345,471
448,861
193,216
13,319,554

3,534,027
362,232
84,741
14,038,166

663,101
356,981
171,086
9,864,305

13,334,579
276,344

12,251,478
123,804

11,848,780
347,424

4,191,082
299,798
245,195
402,772
18,749,770
32,069,324

4,599,072
323,126
227,674
408,990
17,934,144
31,972,310

4,066,009
576,326
211,389
471,844
17,521,772
27,386,077

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables (Notes 17, 22 and 29)
Interest-bearing loans and borrowings (Notes 10, 11 and 18)
Obligations for program rights (Note 19)
Income tax payable
Total Current Liabilities
Noncurrent Liabilities
Interest-bearing loans and borrowings - net of current portion
(Notes 10, 11 and 18)
Obligations for program rights - net of current portion (Note 19)
Accrued pension obligation and other employee benefits
(Note 29)
Deferred tax liabilities - net (Note 28)
Convertible note (Note 4)
Other noncurrent liabilities (Note 20)
Total Noncurrent Liabilities
Total Liabilities
(Forward)

A member firm of Ernst & Young Global Limited

74

ABS-CBN Annual Report 2013

ABS-CBN Annual Report 2013

75

December 31,
2013
Equity Attributable to Equity Holders
of the Parent Company
Capital stock (Note 21):
Common
Preferred
Additional paid-in capital (Notes 2, 4 and 21)
Cumulative translation adjustments
Unrealized gain on available-for-sale investments (Note 13)
Share-based payment plan (Note 21)
Retained earnings (Note 21)
Philippine depository receipts convertible to common shares
(Note 21)

Noncontrolling Interests (Notes 4 and 23)

Total Equity

See accompanying Notes to Consolidated Financial Statements.

December 31,
2012
(As restated Note 2)

January 1,
2012
(As restated Note 2)

=872,124
P
200,000
4,495,050
(270,632)
121,766
34,349
19,817,957

=
P779,585

679,069
(638,289)
126,676
28,952
17,570,834

=
P779,585

725,274
(358,536)
119,823

16,477,105

(1,164,146)
24,106,468

(1,164,146)
17,382,681

(1,164,146)
16,579,105

1,816,289
25,922,757

2,039,150
19,421,831

2,043,807
18,622,912

ABS-CBN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Amounts)

Years Ended December 31

2012
2011
(As restated (As restated 2013
Note 2)
Note 2)
REVENUES
Airtime (Note 22)
Sale of services (Note 30)
Sale of goods (Note 22)
Others
PRODUCTION COSTS (Notes 10, 12, 22, 24, 29 and 30)
COST OF SERVICES (Notes 10, 12, 15, 22, 25, 29 and 30)
COST OF SALES (Notes 8, 10, 22, 25, 29 and 30)

=
P18,907,811
13,711,342
579,140
179,611
33,377,904

12,199,368
421,079
123,329
28,983,640

10,387,998
467,576
86,209
25,735,248

(11,343,783)

(10,258,684)

(9,834,322)

(8,731,471)

(8,055,843)

(6,821,887)

(233,050)

(281,788)

(273,793)

GROSS PROFIT

13,069,600

10,387,325

8,805,246

GENERAL AND ADMINISTRATIVE EXPENSES

(Notes 7, 10, 11, 12, 21, 22, 26, 29 and 30)

(9,936,108)

(8,533,491)

(7,365,488)

(816,919)

(816,701)

(726,871)

94,438

119,672

177,061

(145,500)

111,784

(43,508)

FINANCE COSTS (Notes 4, 18 and 27)

INTEREST INCOME (Note 6)
FOREIGN EXCHANGE GAIN (LOSS) - net
EQUITY IN NET LOSSES OF ASSOCIATES AND JOINT
VENTURES (Note 14)
GAIN (LOSS) ON SALE OF INVESTMENTS (Notes 4 and 13)
OTHER INCOME - net (Notes 15, 27 and 30)
INCOME BEFORE INCOME TAX
PROVISION FOR INCOME TAX (Note 28)

(12,397)

(58)
(24,781)

(29)
1,146,716

459,544

788,099

687,162

2,712,658

2,031,849

2,680,289

684,311

413,950

253,138

P1,580,623
37,276

=
P2,332,971
94,180

NET INCOME
Attributable to
Equity holders of the Parent Company (Note 33)
Noncontrolling interests

=
P2,145,725
(117,378)
P2,028,347

Basic/Diluted Earnings per Share Attributable

to Equity Holders of the Parent Company (Note 33)
See accompanying Notes to Consolidated Financial Statements.

76

ABS-CBN Annual Report 2013

ABS-CBN Annual Report 2013

77

ABS-CBN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Thousands)

Years Ended December 31

2012
2011
(As restated (As restated 2013
Note 2)
Note 2)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) not to be reclassified to
profit and loss in subsequent periods:
Remeasurement gain (loss) on defined benefit plan
(Note 29)
Income tax effect

639,129
(191,739)
447,390

(130,921)
39,276
(91,645)

(1,484,553)
445,366
(1,039,187)

Other comprehensive income (loss) to be reclassified to profit

and loss in subsequent periods:
Exchange differences on translation of foreign operations
Unrealized fair value gain (loss) on available-for-sale
investments (Note 13)

367,657

(279,753)

(44,784)

(4,910)
362,747

6,853
(272,900)

9,818
(34,966)

OTHER COMPREHENSIVE INCOME (LOSS)

810,137

(364,545)

(1,074,153)

TOTAL COMPREHENSIVE INCOME

Attributable to:
Equity holders of the Parent Company
Noncontrolling interests

See accompanying Notes to Consolidated Financial Statements.

78

ABS-CBN Annual Report 2013

2,838,484

2,906,433
(67,949)
2,838,484

1,253,354

(160,600)

1,352,998

(42,412)

ABS-CBN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011
(Amounts in Thousands)
Attributable to Equity Holders of the Parent Company

Capital Stock (Note 21)

Common
Preferred
At December 31, 2012,
as previously reported
Effect of adoption of
Revised PAS 19
(Notes 2 and 29)
At December 31, 2012,
as restated
Net income
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Remeasurement loss on
defined benefit plan
transferred to retained
earnings (Note 2)
Cash dividends declared
Reversal of appropriation of
retained earnings
Appropriation of retained
earnings
Share-based payment plan
Issuance of common stock
Issuance of preferred stock
Decrease in noncontrolling
interests (Note 2)
At December 31, 2013
At December 31, 2011,
as previously reported
Effect of adoption of
Revised PAS 19
(Notes 2 and 29)
At December 31, 2011,
as restated
Net income
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Remeasurement gain on
defined benefit plan
transferred to retained
earnings (Note 2)
Cash dividends declared
Share-based payment plan
Acquisition of
noncontrolling interests
(Note 4)
Effect of business
combination under
common control
(Note 2)
At December 31, 2012,
as restated

Remeasurement
Gain (Loss)
on Defined
Benefit
Plan
(Note 29)

Share-based
Payment
Plan
(Note 21)

Philippine
Depository
Receipts
(PDRs)
Convertible to
Common
Shares
(Note 21)

Total

(P1,164,146)

P19,159,740

Additional
Paid-in
Capital

Cumulative
Translation
Adjustments

Unrealized
Gain
on Availablefor-Sale
Investments
(Note 13)

( P638,289)

P126,6 76

P 28,952

P 8,300,000

126,676

28,952

8,300,000

9,270,834
2,145,725

(1,164,146)

17,382,681
2,145,725

Retained Earnings (Note 21)

UnAppropriated
appropriated

P779,585

P679,069

779,585

679,069

367,657

(4,910)

397,961

760,708

367,657

(4,910)

397,961

2,145,725

2,906,433

(397,961)

92,539

200,000

3,846,962

P 872,124

P200,000

(P270,632)

P121,766

P779,585

P725,274

(P358,536)

779,585

725,274

(638,289)

P11,047,893
(1,777,059)

397,961
(296,563)

(1,777,059)

(296,563)

Noncontrolling
Interests
P2,359,132
(319,982)
2,039,150
(117,378)
49,429
(67,949)

Total Equity
P21,518,872
(2,097,041)
19,421,831
2,028,347
810,137
2,838,484

(296,563)

(8,300,000)

8,300,000

5,397

16,200,000

(16,200,000)

5,397
3,939,501
200,000

5,397
3,939,501
200,000

P34,349

P 16,200,000

P 3,617,957

(P1,164,146)

(30,981)
P24,106,468

(154,912)
P1,816,289

(185,893)
P25,922,757

P119,823

P 8,300,000

P 9,932,540

(P1,164,146)

P18,334,540

P2,202,464

P 20,537,004

(358,536)

119,823

8,300,000

8,177,105
1,580,623

(279,753)

6,853

106,231

(279,753)

6,853

106,231

1,580,623

28,952

P779,585

(30,981)
P4,495,050

(57,916)

11,711

P679,069

P126,676

P28,952

(P638,289)

(106,231)

(1,755,435)

106,231
(593,125)

(1,164,146)

(1,755,435)
16,579,105
1,580,623
(166,669)
1,413,954

(158,657)
2,043,807
37,276
(197,876)
(160,600)

18,622,912
1,617,899
(364,545)
1,253,354

(593,125)
28,952

(57,916)

11,711

199,578

211,289

P 8,300,000

P 9,270,834

P17,382,681

P2,039,150

P19,421,831

(P1,164,146)

(1,914,092)

(43,635)

(593,125)
28,952
(101,551)

ABS-CBN Annual Report 2013

79

Attributable to Equity Holders of the Parent Company

Capital Stock (Note 21)

Common
Preferred
At December 31, 2010,
as previously reported
Effect of adoption of
Revised PAS 19
(Notes 2 and 29)
At December 31, 2010,
as restated
Net income
Other comprehensive
income (loss)
Total comprehensive
income (loss)
Remeasurement loss on
defined benefit plan
transferred to retained
earnings (Note 2)
Cash dividends declared
Acquisitions of PDRs
Increase in noncontrolling
interests
At December 31, 2011,
as restated

Remeasurement
Gain (Loss)
on Defined
Benefit
Plan
(Note 29)

Share-based
Payment
Plan
(Note 21)

Philippine
Depository
Receipts
(PDRs)
Convertible to
Retained Earnings (Note 21)
Common
UnShares
Appropriated
appropriated
(Note 21)

Additional
Paid-in
Capital

Cumulative
Translation
Adjustments

Unrealized
Gain
on Availablefor-Sale
Investments
(Note 13)

8,300,000

8,383,857
2,332,971

(765,739)

779,585

725,274

(313,752)

110,005

(44,784)

9,818

(902,595)

(44,784)

9,818

(902,595)

2,332,971

902,595

(902,595)
(1,637,128)

(1,154,064)

(10,082)

Total

(765,739)
16,830,905
2,332,971
(937,561)
1,395,410

(1,637,128)
(10,082)

Noncontrolling
Interests

(29,154)

Total Equity

(794,893)

119,708
94,180

16,950,613
2,427,151

(136,592)

(1,074,153)

(42,412)

1,352,998

(1,637,128)
(10,082)

1,966,511

1,966,511

See accompanying Notes to Consolidated Financial Statements.

80

ABS-CBN Annual Report 2013

ABS-CBN Annual Report 2013

81

Years Ended December 31

2012
2011
(As restated (As restated 2013
Note 2)
Note 2)

ABS-CBN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)

Years Ended December 31

2012
2011
(As restated (As restated 2013
Note 2)
Note 2)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation and amortization (Notes 10 and 11)
Amortization of:
Program rights and other intangibles (Note 12)
Deferred charges (Note 25)
Debt issue costs (Note 27)
Interest expense (Note 27)
Interest income (Note 6)
Impairment loss (Note 16)
Gain on settlement of liabilities (Note 27)
Equity in net losses of associates and joint ventures
(Note 14)
Loss (gain) on sale of property and equipment
Share-based payment expense (Note 21)
Net unrealized foreign exchange loss (gain)
Loss (gain) on sale of investments (Notes 4 and 13)
Income before working capital changes
Provisions for:
Pension expense and other employee benefits (Note 29)
Doubtful accounts (Note 26)
Decrease (increase) in:
Trade and other receivables
Inventories
Other current assets
Increase (decrease) in:
Trade and other payables
Obligations for program rights
Other noncurrent liabilities
Contribution to pension plan (Note 29)
Cash generated from operations
Income taxes paid
Net cash provided by operating activities
(Forward)

2,712,658
2,714,199

2,825,196

2,588,969

1,430,811
52,871
22,200
768,115
(94,438)
20,061
(13,910)

1,277,597
53,166
18,566
778,643
(119,672)

(208,564)

1,252,183
56,271
16,969
698,461
(177,061)

(143,616)

12,397
5,688
5,397
2,836

7,638,885

58
(89,121)
25,256
(20,329)
24,781
6,597,426

29
(6,985)

(43,021)
(1,146,716)
5,775,772

973,670
432,094

1,041,210
389,904

(814,390)
(46,742)
111,917

(2,239,244)
(88,546)
1,573,683

(1,279,715)
19,985
(568,601)

356,911
239,177
(5,461)
(540)
8,885,521
(830,461)
8,055,060

695,427
(217,963)
(136,802)
(360,000)
7,255,095
(626,732)
6,628,363

(1,320,237)
1,720
(54,841)
(78,894)
3,594,006
(273,229)
3,320,777

843,870
254,947

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to:
Property and equipment (Notes 10 and 34)
Program rights and other intangible assets
(Notes 12 and 34)
Decrease (increase) in other noncurrent assets
Investments in joint ventures (Note 14)
Interest received
Proceeds from sale of:
Property and equipment
Available-for-sale investments
Investments, net of cash of subsidiary disposed (Note 4)
Acquisition of subsidiaries and business, net of cash acquired
(Note 4)
Net cash used in investing activities

( 3,727,670)

( 3,733,534)

( 1,952,945)

(1,772,969)
(97,296)
(137,962)
97,881

(1,495,770)
167,840

124,303

(933,863)
480,295

217,377

24,629

175,861
22,863

25,882

1,037,283

(5,613,387)

(4,993,577)
(9,732,014)

(352,858)
(1,478,829)

2,000,000
850,000

792,432
4,000,000

3,154,255

(3,850,000)
(115,722)
(744,937)
(298,066)
(37,551)

(1,000,000)
(1,267,954)
(818,510)
(591,989)
(51,179)

(132,000)
(112,432)
(610,532)
(1,541,807)
(39,831)

3,939,501
200,000

(185,893)

1,757,332

(101,551)

961,249

250,000

(10,082)
957,571

22,912

(97,713)

14,200

NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS

4,221,917

(2,240,115)

2,813,719

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR

6,394,938

8,635,053

5,821,334

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from:
Long-term debt
Bank loans
Payments of:
Bank loans
Long-term debt
Interest
Dividends
Obligations under finance lease
Issuances of:
Common shares (Note 21)
Preferred shares (Note 21)
Convertible note (Note 4)
Decrease in noncontrolling interests (Note 4)
Acquisition of Philippine depository receipts (Note 21)
Net cash provided by financing activities
EFFECTS OF EXCHANGE RATE CHANGES
AND TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT END OF YEAR

(Note 6)
See accompanying Notes to Consolidated Financial Statements.

82

ABS-CBN Annual Report 2013

ABS-CBN Annual Report 2013

83