Customers’ deposits on lease contracts are generally equivalent to six months rental and refundable at the end of the lease term. Current portion pertains to one year operating lease agreements while noncurrent portion pertains to two to five years operating lease agreements. The terms of the lease agreements also provide for an increase in the rent generally at the rate of 5%, 7% and 10% starting on the second year and annually thereafter, as applicable. Rent income and common utilities, services and maintenance charges from Alphaland Southgate Tower amounted to P =528.6 million, P =412.8 million and P =184.3 million in 2012, 2011 and 2010, respectively. Direct costs related to rent income amounted to P =121.1 million, =75.2 million and P P =32.4 million in 2012, 2011 and 2010, respectively, which mainly comprised of utilities and commissary costs. The Group recognizes the customers’ deposit at fair value. The fair value of the deposit is determined based on the prevailing market rate of interest for a similar loan. The excess of the principal amount of the deposit over its fair value is accounted for as deferred lease income and amortized on a straight-line basis. The deferred lease income amounted to P =9.1 million and P =10.8 million as of December 31, 2012 and 2011, respectively, and is included under “Other noncurrent liabilities” account in the consolidated balance sheets. Aside from customers’ deposits paid by tenants, advance rentals generally equivalent to two months rental are also paid and included in the initial billing to tenants, which shall be applied to the monthly rental at the end of the lease term. Advance rental amounted to = P69.8 million and P =63.3 million as of December 31, 2012 and 2011, respectively, and is included under “Other noncurrent liabilities” account in the consolidated balance sheets. Estimated minimum future rental receivable under the lease agreements are as follows: Within one year After one year but not more than five years
=293,104,263 P 611,329,252
In 2011, ADI also entered into a long-term foreshore lease agreement with the Department of Environment and Natural Resources (lessor) for a period of 25 years, effective upon issuance thereof, renewable for another period of 25 years at the option of the lessor. The leased property represents a portion of foreshore with a total area of 241,017 square meters (inclusive of the portion covered by water), more or less, located at the Manila Reclamation Area, Parañaque City. The purpose of the lease is to allow AMC to develop and construct the Marina Club (see Note 1). The lease agreement provides for an annual fixed rental payable annually in advance during the lease term. The future minimum rent payable under the operating lease agreement as of December 31, 2012 is as follows: Within one year After one year but not more than five years After more than five years
144
P2,417,520 = 12,087,600 45,731,420 =60,236,540 P