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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 – |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 – |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 – |
(Jurisdiction of incorporation or organization)
Makati Avenue
Makati City, Philippines
Ramon Cojuangco Bldg., Makati Avenue, Makati City, Philippines
(Name, telephone, e-mail and/or facsimile number and address of Company contact person)
Name of each exchange | ||
Title of each class | on which registered | |
Common Capital Stock, Par Value Five Philippine Pesos Per Share | New York Stock Exchange* | |
American Depositary Shares, evidenced by American Depositary Receipts, each representing one share of Common Capital Stock | New York Stock Exchange |
* Registered on the New York Stock Exchange not for trading but only in connection with the registration of American Depositary Shares, or ADSs, pursuant to the requirements of such stock exchange. |
186,756,438 shares of Common Capital Stock, Par Value Five Philippine Pesos Per Share
441,887,387 shares of Serial Preferred Stock, Par Value Ten Philippine Pesos Per Share
Large accelerated filerþ | Accelerated filero | Non-accelerated filero (Do not check if a smaller reporting company) | Smaller reporting companyo |
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Item 19. Exhibits | 283 | |||||||
EXHIBIT INDEX | 285 | |||||||
CERTIFICATION | 302 | |||||||
Ex-1.B Amended By-Laws (as amended on August 3, 2010) | ||||||||
Ex-99.6 Computation of Earnings Per Share | ||||||||
Ex-99.7 Calculation of Ratio of Earnings to Fixed Charges | ||||||||
Ex-99.8 Subsidiaries | ||||||||
Ex-12.1 Section 302 Certification of the Chief Executive Officer | ||||||||
Ex-12.2 Section 302 Certification of the Chief Financial Officer | ||||||||
Ex-12.1 Section 906 Certification of the Chief Executive Officer | ||||||||
Ex-12.2 Section 906 Certification of the Chief Financial Officer |
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• | 3rd Brand means 3rd Brand Pte. Ltd., an 85.0%-owned subsidiary of SCH; | ||
• | ACeS Philippines means ACeS Philippines Cellular Satellite Corporation, a wholly-owned subsidiary of PLDT; | ||
• | ADRs mean American Depositary Receipts; | ||
• | AIL means ACeS International Limited, a 36.99%-owned associate of ACeS Philippines; | ||
• | Airborne Access means Airborne Access Corporation, a 99.4%-owned subsidiary of SBI; | ||
• | ARPU means average revenue per user; | ||
• | BayanTel means Bayan Telecommunication, Inc.; | ||
• | BayanTrade means BayanTrade, Inc. (formerly BayanTrade Dotcom, Inc.), a 93.5%-owned subsidiary of ePLDT; | ||
• | BCC means Bonifacio Communications Corporation, a 75.0%-owned subsidiary of PLDT; | ||
• | Beacon means Beacon Electric Asset Holdings, Inc., 50.0%-owned by PCEV; | ||
• | BIR means Bureau of Internal Revenue; | ||
• | BOW means Blue Ocean Wireless, a 51.0%-owned subsidiary of SCH; | ||
• | BPO means business process outsourcing; | ||
• | BSP means Bangko Sentral ng Pilipinas; | ||
• | BTS means base transceiver station; | ||
• | CBA means collective bargaining agreement; | ||
• | CG Manual means PLDT Manual on Corporate Governance; | ||
• | CGO means Corporate Governance Office; | ||
• | ClarkTel means PLDT Clark Telecom, Inc., a wholly-owned subsidiary of PLDT; | ||
• | CMTS means cellular mobile telephone system; |
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• | Code of Ethics means PLDT’s Code of Business Conduct and Ethics; | ||
• | CPCN means Certificate of Public Convenience and Necessity; | ||
• | CSRs mean customer service representatives; | ||
• | CURE means Connectivity Unlimited Resource Enterprise, Inc., a wholly-owned subsidiary of FHI; | ||
• | CyMed means CyMed, Inc., a wholly-owned subsidiary of SPi; | ||
• | DFON means domestic fiber optic network; | ||
• | Digital Paradise means Digital Paradise, Inc., a 75.0%-owned subsidiary of ePLDT; | ||
• | Digitel means Digital Telecommunications Philippines, Inc.; | ||
• | DSL means digital subscriber line; | ||
• | ECC means the Executive Compensation Committee; | ||
• | ePLDT means ePLDT, Inc., a wholly-owned subsidiary of PLDT; | ||
• | First Pacific means First Pacific Company Limited; | ||
• | First Pacific Group means First Pacific and its affiliates; | ||
• | FHI means Francom Holdings, Inc., a wholly-owned subsidiary of Smart; | ||
• | FPHC means First Philippine Holdings Corporation; | ||
• | FPUC means First Philippine Utilities Corporation; | ||
• | GAAP means generally accepted accounting principles; | ||
• | Globe means Globe Telecom, Inc.; | ||
• | GNC means the Governance and Nomination Committee; | ||
• | GSM means global system for mobile communications; | ||
• | HB means House Bill; | ||
• | I-Contacts means I-Contacts Corporation, a wholly-owned subsidiary of Smart; | ||
• | ICT means information and communications technology; | ||
• | IFRS means International Financial Reporting Standards as issued by the International Accounting Standards Board; | ||
• | Infocom means Infocom Technologies, Inc., a 99.6%-owned subsidiary of ePLDT; | ||
• | IP means internet protocol; | ||
• | ISP means internet service providers; | ||
• | Laguna Medical means Laguna Medical Systems, Inc., a wholly-owned subsidiary of SPi; | ||
• | LEC means local exchange carrier; | ||
• | Level Up! means Level Up!, Inc., a 57.5%-owned subsidiary of ePLDT; | ||
• | LTIP means long-term incentive plan; | ||
• | Mabuhay Satellite means Mabuhay Satellite Corporation, a 67.0%-owned subsidiary of PLDT; | ||
• | Maratel means PLDT-Maratel, Inc., a 97.8%-owned subsidiary of PLDT; | ||
• | Meralco means Manila Electric Company; |
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• | MPIC means Metro Pacific Investments Corporation, a subsidiary of First Pacific; | ||
• | MPRI means Metro Pacific Resources, Inc.; | ||
• | netGames means netGames, Inc., a 57.5%-owned subsidiary of ePLDT; | ||
• | NGN means Next Generation Network; | ||
• | NTC means the National Telecommunications Commission of the Philippines; | ||
• | NTT means Nippon Telegraph and Telephone Corporation; | ||
• | NTT Communications means NTT Communications Corporation, a wholly-owned subsidiary of NTT; | ||
• | NTT DoCoMo means NTT DoCoMo, Inc., a majority-owned and publicly traded subsidiary of NTT; | ||
• | NTTC-UK means NTT Communications Capital (UK) Ltd., a wholly-owned subsidiary of NTT Communications; | ||
• | NYSE means New York Stock Exchange; | ||
• | PAPTELCO means Philippine Association of Private Telephone Companies, Inc.; | ||
• | Parlance means Parlance Systems, Inc., merged with SPi CRM and Vocativ on April 8, 2010, wherein SPi CRM is the surviving entity; | ||
• | PCD means PCD Nominee Corporation; | ||
• | PCEV means PLDT Communications and Energy Ventures, Inc., (formerly known as Pilipino Telephone Corporation, or Piltel), a 99.5%-owned subsidiary of Smart; | ||
• | PDSI means Primeworld Digital Systems, Inc., a wholly-owned subsidiary of Smart; | ||
• | PFRS means Philippine Financial Reporting Standards; | ||
• | PGCI means Philippine Global Communications, Inc.; | ||
• | PHC means PH Communications Holdings Corporation, a wholly-owned subsidiary of Smart; | ||
• | Philcom means PLDT-Philcom, Inc., a wholly-owned subsidiary of PLDT; | ||
• | Philippine SEC means the Philippine Securities and Exchange Commission; | ||
• | PLDT Beneficial Trust Fund means the beneficial trust fund created by PLDT to pay the benefits under the PLDT Employees’ Benefit Plan; | ||
• | PLDT Global means PLDT Global Corporation, a wholly-owned subsidiary of PLDT; | ||
• | PLP means PLDT Landline Plus; | ||
• | PSE means the Philippine Stock Exchange, Inc.; | ||
• | PTIC means Philippine Telecommunications Investment Corporation; | ||
• | SBI means Smart Broadband, Inc., a wholly-owned subsidiary of Smart; | ||
• | SCH means SmartConnect Holdings Pte. Ltd., a wholly-owned subsidiary of Smart; | ||
• | SGP means SmartConnect Global Pte. Ltd., a wholly-owned subsidiary of SCH; | ||
• | SHI means Smarthub, Inc., a wholly-owned subsidiary of Smart; | ||
• | SIM means subscriber identification module; | ||
• | Smart means Smart Communications, Inc., a wholly-owned subsidiary of PLDT; | ||
• | SMHC means Smart Money Holdings Corporation, a wholly-owned subsidiary of Smart; | ||
• | SMI means Smart Money, Inc., a wholly-owned subsidiary of SMHC; |
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• | SMS means short messaging service; | ||
• | SNMI means Smart-NTT Multimedia, Inc., a wholly-owned subsidiary of PLDT; | ||
• | SPi CRM means SPi CRM Inc., (formerly known as ePLDT Ventus, Inc., or Ventus), the surviving entity of a merger with Vocativ and Parlance on April 8, 2010, a wholly-owned subsidiary of ePLDT; | ||
• | SPi means SPi Technologies, Inc., a wholly-owned subsidiary of ePLDT; | ||
• | SPi Group means SPi and its subsidiaries; | ||
• | Springfield means Springfield Service Corporation, a wholly-owned subsidiary of SPi; | ||
• | SRC means the Securities Regulation Code of the Philippines; | ||
• | SRF means supervision and regulation fees; | ||
• | SubicTel means PLDT Subic Telecom, Inc., a wholly-owned subsidiary of PLDT; | ||
• | TSC means the Technology Strategy Committee; | ||
• | TSI means Telecoms Solutions, Inc., a wholly-owned subsidiary of SMHC; | ||
• | U.S. SEC means the United States Securities and Exchange Commission; | ||
• | VAS means value-added service; | ||
• | VAT means value-added tax; | ||
• | Vocativ means Vocativ Systems, Inc., merged with SPi CRM and Parlance on April 8, 2010, wherein SPi CRM became the surviving entity; | ||
• | VoIP means voice over internet protocol; | ||
• | WAP means wireless application protocol; | ||
• | WCI means Wireless Card, Inc., a wholly-owned subsidiary of Smart; | ||
• | W-CDMA means wideband-code division multiple access; and | ||
• | Wolfpac means Wolfpac Mobile, Inc., a wholly-owned subsidiary of Smart. |
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2010(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
(in millions, except earnings per common share amounts, weighted average number of common shares, ratio of earnings to | ||||||||||||||||||||||||
fixed charges and dividends declared per common share amounts) | ||||||||||||||||||||||||
Statements of Operating Data: | ||||||||||||||||||||||||
Revenues | US$ | 3,297 | Php | 144,459 | Php | 147,993 | Php | 145,837 | Php | 138,704 | Php | 127,508 | ||||||||||||
Service revenues | 3,247 | 142,242 | 145,567 | 142,873 | 135,478 | 124,988 | ||||||||||||||||||
Non-service revenues | 51 | 2,217 | 2,426 | 2,964 | 3,226 | 2,520 | ||||||||||||||||||
Expenses | 2,029 | 88,903 | 90,111 | 85,786 | 83,587 | 82,003 | ||||||||||||||||||
Net income for the year | 919 | 40,259 | 40,095 | 34,976 | 39,274 | 32,581 | ||||||||||||||||||
Earnings per common share for the year attributable to equity holders of PLDT | ||||||||||||||||||||||||
Basic | 4.86 | 212.85 | 210.38 | 179.96 | 205.84 | 173.10 | ||||||||||||||||||
Diluted | 4.86 | 212.85 | 210.36 | 179.95 | 204.88 | 173.01 | ||||||||||||||||||
Balance Sheets Data: | ||||||||||||||||||||||||
Cash and cash equivalents | 837 | 36,678 | 38,319 | 33,684 | 17,447 | 16,870 | ||||||||||||||||||
Total assets | 6,341 | 277,815 | 280,148 | 252,558 | 240,158 | 241,904 | ||||||||||||||||||
Total long-term debt — net of current portion | 1,732 | 75,879 | 86,066 | 58,899 | 53,372 | 63,769 | ||||||||||||||||||
Total debt(2) | 2,046 | 89,646 | 98,729 | 73,911 | 60,640 | 80,154 | ||||||||||||||||||
Total liabilities | 4,118 | 180,430 | 181,023 | 145,589 | 127,813 | 139,052 | ||||||||||||||||||
Total equity | 2,223 | 97,385 | 99,125 | 106,969 | 112,345 | 102,853 | ||||||||||||||||||
Weighted average number of common shares for the year (in thousands) | — | 186,790 | 186,916 | 188,163 | 188,656 | 184,456 | ||||||||||||||||||
Other Data: | ||||||||||||||||||||||||
Depreciation and amortization | 600 | 26,277 | 25,607 | 24,709 | 28,613 | 31,869 | ||||||||||||||||||
Ratio of earnings to fixed charges(3) | 7.4 | x | 7.4 | x | 7.7 | x | 8.0 | x | 8.3 | x | 4.6 | x | ||||||||||||
Net cash provided by operating activities | 1,764 | 77,260 | 74,386 | 78,302 | 77,418 | 69,211 | ||||||||||||||||||
Net cash used in investing activities | 531 | 23,283 | 49,132 | �� | 17,014 | 31,319 | 35,790 | |||||||||||||||||
Net cash used in financing activities | 1,263 | 55,322 | 20,293 | 45,464 | 44,819 | 45,900 | ||||||||||||||||||
Dividends declared to common shareholders | 934 | 40,909 | 38,758 | 36,578 | 28,299 | 14,459 | ||||||||||||||||||
Dividends declared per common share | 5.00 | 219.00 | 207.00 | 194.00 | 150.00 | 78.00 |
(1) | We maintain our accounts in Philippine pesos, the functional and presentation currency under IFRS. For convenience, the Philippine peso financial information as at and for the year ended December 31, 2010, has been translated into U.S. dollars at the exchange rate of Php43.81 to US$1.00, the rate quoted through the Philippine Dealing System as at December 31, 2010. This translation should not be construed as a representation that the Philippine peso amounts represent, or have been or could be converted into, U.S. dollars at that rate or any other rate. | |
(2) | Total debt represents current portion of long-term debt, long-term debt — net of current portion and notes payable. | |
(3) | For purposes of this ratio, “Earnings” consist of: (a) pre-tax income from continuing operations before adjustment for non-controlling interests in consolidated subsidiaries or income or loss from equity investees; (b) fixed charges; (c) amortization of capitalized interest; (d) distributed income of equity investees; and (e) share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges; less the sum of the following: (1) capitalized interest; (2) preference security dividend requirements of consolidated subsidiaries; and (3) the non-controlling interests in pre-tax income of subsidiaries that have not incurred fixed charges. | |
“Fixed charges” consist of interest expense and capitalized interest, amortized premiums, discounts and capitalized expenses related to indebtedness, an estimate of interest within rental expense, and preference security dividend requirements of consolidated subsidiaries. |
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December 31, | ||||||||
2010 | 2009 | |||||||
(in millions) | ||||||||
Serial Preferred Stock | ||||||||
10% Cumulative Convertible Preferred Stock | ||||||||
A to HH | Php | 4,059 | Php | 4,056 | ||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||
Series IV | 360 | 360 | ||||||
Php | 4,419 | Php | 4,416 | |||||
Common Stock | Php | 947 | Php | 947 | ||||
Date | Amount | |||||||||||||
Earnings | Approved | Record | Payable | Per share | Total Declared | |||||||||
(in pesos) | (in million pesos) | |||||||||||||
2008 | August 5, 2008 | August 22, 2008 | September 22, 2008 | 70 | 13,140 | |||||||||
2008 | March 3, 2009 | March 18, 2009 | April 21, 2009 | 70 | 13,124 | |||||||||
2008 | March 3, 2009 | March 18, 2009 | April 21, 2009 | 60 | 11,250 | |||||||||
200 | 37,514 | |||||||||||||
2009 | August 4, 2009 | August 20, 2009 | September 22, 2009 | 77 | 14,384 | |||||||||
2009 | March 2, 2010 | March 17, 2010 | April 20, 2010 | 76 | 14,197 | |||||||||
2009 | March 2, 2010 | March 17, 2010 | April 20, 2010 | 65 | 12,142 | |||||||||
218 | 40,723 | |||||||||||||
2010 | August 3, 2010 | August 19, 2010 | September 21, 2010 | 78 | 14,570 | |||||||||
2010 | March 1, 2011 | March 16, 2011 | April 19, 2011 | 78 | 14,567 | |||||||||
2010 | March 1, 2011 | March 16, 2011 | April 19, 2011 | 66 | 12,326 | |||||||||
222 | 41,463 | |||||||||||||
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In Philippine Peso | In U.S. Dollars | |||||||
2006 | 78.00 | 1.54 | ||||||
2007 | 150.00 | 3.26 | ||||||
2008 | 194.00 | 4.47 | ||||||
Regular Dividend — April 21, 2008 | 68.00 | 1.62 | ||||||
Regular Dividend — September 22, 2008 | 70.00 | 1.51 | ||||||
Special Dividend — April 21, 2008 | 56.00 | 1.34 | ||||||
2009 | 207.00 | 4.30 | ||||||
Regular Dividend — April 21, 2009 | 70.00 | 1.45 | ||||||
Regular Dividend — September 22, 2009 | 77.00 | 1.62 | ||||||
Special Dividend — April 21, 2009 | 60.00 | 1.24 | ||||||
2010 | 219.00 | 4.95 | ||||||
Regular Dividend — April 20, 2010 | 76.00 | 1.71 | ||||||
Regular Dividend — September 21, 2010 | 78.00 | 1.78 | ||||||
Special Dividend — April 20, 2010 | 65.00 | 1.46 |
Year Ended December 31, | ||||||||||||||||
Period End | Average(1) | High(2) | Low(3) | |||||||||||||
2006 | Php | 49.05 | Php | 51.17 | Php | 49.05 | Php | 53.59 | ||||||||
2007 | 41.41 | 45.88 | 41.14 | 49.16 | ||||||||||||
2008 | 47.65 | 44.71 | 40.36 | 49.98 | ||||||||||||
2009 | 46.43 | 47.82 | 45.95 | 49.06 | ||||||||||||
2010 | 43.81 | 45.10 | 42.52 | 46.98 | ||||||||||||
2011 (through March 29, 2011) | 43.53 | 43.80 | 43.30 | 44.59 |
(1) | Calculated by using the average of the exchange rates on the last day of each month during the period. | |
(2) | Highest exchange rate for the period. | |
(3) | Lowest exchange rate for the period. |
Month | ||||||||||||||||
Period End | Average(1) | High(2) | Low(3) | |||||||||||||
2010 | ||||||||||||||||
October | Php | 43.06 | Php | 43.40 | Php | 43.06 | Php | 43.89 | ||||||||
November | 44.15 | 43.55 | 42.52 | 44.26 | ||||||||||||
December | 43.81 | 43.94 | 43.65 | 44.38 | ||||||||||||
2011 | ||||||||||||||||
January | 44.31 | 44.20 | 43.71 | 44.59 | ||||||||||||
February | 43.68 | 43.67 | 43.36 | 44.21 | ||||||||||||
March (through March 29, 2011) | 43.53 | 43.51 | 43.30 | 43.95 |
(1) | Calculated by using the average of the exchange rates during the month. | |
(2) | Highest exchange rate for the month. | |
(3) | Lowest exchange rate for the month. |
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• | political and economic developments affecting the Philippines, including the level of remittances from overseas Filipino workers; | ||
• | global economic and financial trends; | ||
• | the volatility of regional currencies, particularly the Japanese yen; | ||
• | any interest rate increases by the Federal Reserve Bank of the United States; and | ||
• | changes in the value of the U.S. dollar relative to the Philippine peso resulting from either higher demand for U.S. dollars by both banks and domestic businesses to service their maturing U.S. dollar obligations; and foreign exchange traders including banks covering their short U.S. dollar positions, among others. |
• | increases in competition from other domestic and international telecommunications providers; | ||
• | advances in technology; | ||
• | alternative providers offering internet telephony, also known as VoIP, and broadband capacity; and | ||
• | unauthorized traffic termination and bypass routings by international simple resale operators. |
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• | our ability to identify suitable opportunities for investment or acquisition; | ||
• | our ability to reach an acquisition or investment agreement on terms that are satisfactory to us or at all; | ||
• | the extent to which we are able to exercise control over the acquired company; | ||
• | the economic, business or other strategic objectives and goals of the acquired company compared to those of the PLDT Group, as well as the ability to execute the identified strategies in order to generate fair returns on the investment; and | ||
• | our ability to successfully integrate the acquired company or business with our existing businesses. |
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• | physical damage; | ||
• | power loss; | ||
• | capacity limitation; |
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• | cable theft; | ||
• | software defects; and | ||
• | breaches of security by computer viruses, break-ins or otherwise. |
• | capital expenditures in excess of US$50 million; | ||
• | any investments, if the aggregate amount of all investments for the previous 12 months is greater than US$25 million in the case of all investments to any existing investees and US$100 million in the case of all investments to any new or existing investees, determined on a rolling monthly basis; | ||
• | any investments in a specific investee, if the cumulative value of all investments made by us in that investee is greater than US$10 million in the case of an existing investee and US$50 million in the case of a new investee; | ||
• | issuance of common stock or stock that is convertible into common stock; | ||
• | new business activities other than those we currently engage in; and | ||
• | merger or consolidation. |
• | elections of PLDT’s directors; and | ||
• | approval of major corporate actions, which require the vote of common stockholders. |
• | NTT DoCoMo is entitled to nominate one additional NTT DoCoMo nominee to the board of directors of each of PLDT and Smart; |
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• | PLDT must consult NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or certain of its committees of any proposal of investment in an entity that would primarily engage in a business that would be in direct competition or substantially the same business opportunities, customer base, products or services with business carried on by NTT DoCoMo, or which NTT DoCoMo has announced publicly an intention to carry on; | ||
• | PLDT must procure that Smart does not cease to carry on its business, dispose of all of its assets, issue common shares, merge or consolidate, or effect winding up or liquidation without PLDT first consulting with NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or Smart, or certain of its committees; and | ||
• | PLDT must first consult with NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or certain of its committees for the approval of any transfer by any member of the PLDT Group of Smart common capital stock to any person who is not a member of the PLDT Group. |
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(a) | guidelines on the mandatory interconnection of backhaul networks to the cable landing station, which were issued on October 7, 2008 and became effective on October 23, 2008; and | ||
(b) | guidelines on the interconnection of LECs in local calling areas that eliminate interconnection access charges between LECs within a local calling area, which were issued on May 30, 2008 and became effective on June 17, 2008. |
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• | shortages of equipment, materials and labor; | ||
• | work stoppages and labor disputes; | ||
• | interruptions resulting from inclement weather and other natural disasters; | ||
• | unforeseen engineering, environmental and geological problems; and | ||
• | unanticipated cost increases. |
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• | suspend temporarily or restrict sales of foreign exchange; | ||
• | require licensing of foreign exchange transactions; or | ||
• | require the delivery of foreign exchange to the BSP or its designee banks. |
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Place of | Percentage of Ownership | |||||||||||
Name of Subsidiary | Incorporation | Principal Business Activity | Direct | Indirect | ||||||||
Wireless | ||||||||||||
Smart: | Philippines | Cellular mobile services | 100.0 | — | ||||||||
Smart Broadband, Inc., or SBI, and Subsidiaries, or SBI Group | Philippines | Internet broadband distribution | — | 100.0 | ||||||||
Primeworld Digital Systems, Inc., or PDSI | Philippines | Internet broadband distribution services | — | 100.0 | ||||||||
I-Contacts Corporation, or I-Contacts | Philippines | Call center services | — | 100.0 | ||||||||
Wolfpac Mobile, Inc., or Wolfpac | Philippines | Mobile applications development and services | — | 100.0 | ||||||||
Wireless Card, Inc., or WCI | Philippines | Promotion of the sale and/or patronage of debit and/or charge cards | — | 100.0 | ||||||||
Smarthub, Inc., or SHI | Philippines | Software development and sale of maintenance and support services | — | 100.0 | ||||||||
Smart Money Holdings Corporation, or SMHC: | Cayman Islands | Investment company | — | 100.0 | ||||||||
Smart Money, Inc., or SMI | Cayman Islands | Mobile commerce solutions marketing | — | 100.0 | ||||||||
Telecoms Solutions, Inc., or TSI | Mauritius | Mobile commerce platforms | — | 100.0 | ||||||||
Far East Capital Limited and Subsidiary | Cayman Islands | Cost effective offshore financing and risk management activities for Smart | — | 100.0 | ||||||||
PH Communications Holdings Corporation, or PHC | Philippines | Investment company | — | 100.0 | ||||||||
Francom Holdings, Inc., or FHI: | Philippines | Investment company | — | 100.0 | ||||||||
Connectivity Unlimited Resource Enterprise, Inc., or CURE | Philippines | Cellular mobile services | — | 100.0 | ||||||||
Chikka Holdings Limited, or Chikka, and Subsidiaries, or Chikka Group | British Virgin Islands | Mobile applications development and services; Content provider | — | 100.0 | ||||||||
PLDT Communications and Energy Ventures, Inc., or PCEV, (formerly known as Pilipino Telephone Corporation, or Piltel) and Subsidiaries, or PCEV Group | Philippines | Investment company | — | 99.5 | ||||||||
SmartConnect Holdings Pte. Ltd., or SCH: | Singapore | Investment company | — | 100.0 | ||||||||
SmartConnect Global Pte. Ltd., or SGP | Singapore | International trade of satellites and Global System for Mobile Communication, or GSM, enabled global telecommunications | — | 100.0 | ||||||||
3rd Brand Pte. Ltd., or 3rd Brand | Singapore | Solutions and systems integration services | — | 85.0 | ||||||||
Blue Ocean Wireless, or BOW | Isle of Man | Delivery of GSM communication capability for the maritime sector | — | 51.0 | ||||||||
Telesat, Inc., or Telesat* | Philippines | Satellite communications services | 100.0 | — | ||||||||
ACeS Philippines Cellular Satellite Corporation, or ACeS Philippines | Philippines | Satellite information and messaging services | 88.5 | 11.5 | ||||||||
Mabuhay Satellite Corporation, or Mabuhay Satellite* | Philippines | Satellite communications services | 67.0 | — | ||||||||
Fixed Line | ||||||||||||
PLDT Clark Telecom, Inc., or ClarkTel | Philippines | Telecommunications services | 100.0 | — | ||||||||
PLDT Subic Telecom, Inc., or SubicTel | Philippines | Telecommunications services | 100.0 | — | ||||||||
PLDT Global Corporation, or PLDT Global, and Subsidiaries, or PLDT Global Group | British Virgin Islands | Telecommunications services | 100.0 | — | ||||||||
Smart-NTT Multimedia, Inc., or SNMI* | Philippines | Data and network services | 100.0 | — | ||||||||
PLDT-Philcom, Inc. (formerly known as Philcom Corporation), or Philcom, and Subsidiaries, or Philcom Group | Philippines | Telecommunications services | 100.0 | — | ||||||||
PLDT-Maratel, Inc., or Maratel | Philippines | Telecommunications services | 97.8 | — | ||||||||
Bonifacio Communications Corporation, or BCC | Philippines | Telecommunications, infrastructure and related value-added services, or VAS | 75.0 | — | ||||||||
Information and Communications Technology, or ICT | ||||||||||||
ePLDT, Inc., or ePLDT: | Philippines | Information and communications infrastructure for Internet-based services, e-commerce, customer relationship management and IT-related services | 100.0 | — | ||||||||
SPi Technologies, Inc., or SPi, and Subsidiaries, or SPi Group | Philippines | Knowledge processing solutions | — | 100.0 | ||||||||
SPi CRM Inc., or SPi CRM (formerly ePLDT Ventus, Inc.)** | Philippines | Customer relationship management | — | 100.0 | ||||||||
Parlance Systems, Inc., or Parlance** | Philippines | Customer relationship management | — | — | ||||||||
Vocativ Systems, Inc., or Vocativ** | Philippines | Customer relationship management | — | — | ||||||||
Infocom Technologies, Inc., or Infocom | Philippines | Internet services | — | 99.6 | ||||||||
BayanTrade, Inc. (formerly BayanTrade Dotcom, Inc.), or BayanTrade, and Subsidiaries, or BayanTrade Group | Philippines | Internet-based purchasing, IT consulting and professional services | — | 93.5 | ||||||||
Digital Paradise, Inc., or Digital Paradise | Philippines | Internet services | — | 75.0 | ||||||||
Level Up!, Inc., or Level Up! | Philippines | Publisher of online games | — | 57.5 | ||||||||
netGames, Inc., or netGames | Philippines | Customer relationship management | — | 57.5 |
* | Ceased commercial operations | |
** | On April 8, 2010, SPi CRM, Parlance and Vocativ were merged, with SPi CRM as the surviving entity. |
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• | Recognized Brands. PLDT and Smart are strong and widely recognized brand names in the Philippines. We have built the PLDT brand name for over 80 years as the leading telecommunications provider in the Philippines. Smart is recognized in the Philippines as an innovative provider of high-quality cellular services. TheTalk ‘N Textbrand, which is provided using Smart’s network, has also gained significant recognition as a reliable value for money brand. | ||
• | Leading Market Shares. With over 49 million fixed line, cellular and broadband subscribers as at December 31, 2010, we have the leading market positions in each of the fixed line, cellular and broadband markets in the Philippines. | ||
• | Diversified Revenue Sources. We derive our revenues from our three business segments, namely, wireless, fixed line and ICT businesses, with wireless contributing 61%, fixed line 32% and ICT 7% to our total revenues in 2010. Revenue sources of our wireless business include cellular services, which include voice services and text message-related and VAS, and wireless broadband services. Our fixed line business derives service revenues from local exchange, international long distance, national long distance and data and other network services. In our ICT business, sources of revenue include knowledge processing solutions, customer relationship management and internet and online gaming business, and data center and other services. Revenues from our fixed line services, such as local exchange, national and international long distance, have been declining over the past years due to |
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pressures on traditional fixed line voice revenues and reductions in international interconnection rates, offset by the significant revenue contribution of our data and other network service. Fixed line revenues represent 32% of our total revenues in 2010, 2009, and 2008. We will continue to identify and develop new revenue sources to further broaden our diversified revenue base for our wireless, fixed line and ICT businesses. | |||
• | Advanced Integrated Network. With the most advanced and extensive telecommunications networks in the Philippines, we are able to offer a wide array of communications services. We are enhancing the capabilities of our fixed line and wireless networks to allow us to better exploit this competitive strength and achieve higher levels of network efficiency in providing voice and data services. This includes the build out of a second network that has been designed to contain the increase in voice traffic resulting from lower cost voice offers under our Red Mobile brand. This network and brand strategy will allow the quality of service on our main network serving our Buddy and Talk and Text brands to be maintained. In addition, we continue our upgrade of our fixed line network to an all IP-based NGN, and continue to roll out 3G and wireless broadband in order to increase broadband subscribers and expand our data/broadband capabilities. We are also investing in the upgrade of our wireless network to achieve, among others, greater operational and cost efficiencies. | ||
• | Innovative Products and Services. We have successfully introduced a number of innovative and award-winning cellular products and services, includingSmart Money, Smart LoadandPasa Load. Smart Loadis an “over-the-air” electronic loading facility designed to make reloading of air time credits more convenient for, and accessible to consumers.Pasa Load(the term “pasa” means “transfer”) is a derivative service ofSmart Loadthat allows load transfers to otherSmart BuddyandTalk ‘N Text subscribers. | ||
• | Strong Strategic Relationships. We have important strategic relationships with First Pacific, NTT DoCoMo and NTT Communications. The technological support, international experience and management expertise made available to us through these strategic relationships enhance our market leadership and ability to provide and cross-sell a more complete range of products and services. |
• | Build on our leading positions in the fixed line and wireless businesses. We plan to build on our position as the leading fixed line and wireless service providers in the Philippines by continuing to launch new products and services to increase subscriber value and utilization of our existing facilities and equipment at reduced cost and to increase our subscribers’ use of our network for both voice and data, as well as their reliance on our services. We are currently upgrading our fixed line facilities to NGN, and have rolled out a 3G network based on a W-CDMA technology as well as expanding our DSL and wireless broadband facilities. We plan to upgrade of our wireless network to achieve operating and cost efficiencies. Our operating target is to continue growth in profitability by increasing our revenues while controlling our costs. | ||
• | Capitalize on our strength as an integrated provider of telecommunications services. We offer the broadest range of telecommunications services among all operators in the Philippines. We plan to capitalize on this position to maximize revenue opportunities by bundling and cross-selling our products and services, and by developing convergent products that feature the combined benefits of voice and data, fixed line, wireless and ICT services utilizing our network and business platforms. We are also lowering our costs by integrating the operations of our different businesses. | ||
• | Strengthen our leading position in the data and broadband market. Leveraging on the inherent strength of our fixed line and wireless businesses, we are committed to further develop our fastest growing business — broadband, data and other network services. Consistent with our strategy of introducing innovative products and services using advanced technology, we have launched various products and services in the data and broadband market that address different market needs. | ||
• | Maintain a strong financial position and improve shareholder returns.In recent years, we have significantly improved our financial position by utilizing our cash flows principally for debt reduction. |
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As the cash flows generated by our businesses have increased and our leverage ratios have improved, we have been able to restore the payment of cash dividends to our common shareholders beginning 2005 and were able to declare dividend payouts of approximately 100% in each of 2008, 2009 and 2010 of our core earnings. We expect that our free cash flows will continue to be utilized for the payment of cash dividends to common shareholders and investments in new growth areas while continuing to maintain a healthy balance sheet position. As part of our growth strategy, we made and may continue to make acquisitions and investments in companies or businesses. We will continue to consider value-accretive investments in telecommunications as well as telco-related businesses such as those in the global outsourcing and off-shoring industry. |
2010 | 2009 | 2008 | ||||||||||
Systemwide cellular subscriber base | 45,636,008 | 41,328,641 | 35,224,604 | |||||||||
Prepaid | 45,214,433 | 40,893,098 | 34,826,468 | |||||||||
Smart Buddy | 25,293,443 | 23,762,814 | 20,501,617 | |||||||||
Talk ‘N Text | 18,967,381 | 17,050,713 | 14,308,493 | |||||||||
Red Mobile(1) | 953,609 | 79,571 | 16,358 | |||||||||
Postpaid | 421,575 | 435,543 | 398,136 | |||||||||
Growth rate of cellular subscribers | 10 | % | 17 | % | 17 | % | ||||||
Smart Buddy | 6 | % | 16 | % | 3 | % | ||||||
Talk ‘N Text | 11 | % | 19 | % | 47 | % | ||||||
Red Mobile(1) | 1,098 | % | 386 | % | 100 | % | ||||||
Cellular revenues (in millions) | Php | 86,399 | Php | 88,410 | Php | 87,518 | ||||||
Voice | 42,250 | 38,850 | 37,275 | |||||||||
Data | 41,529 | 47,072 | 47,804 | |||||||||
Others(2) | 2,620 | 2,488 | 2,439 | |||||||||
Percentage of cellular revenues to total wireless service revenues | 92 | % | 92 | % | 94 | % | ||||||
Percentage of cellular revenues to total service revenues | 56 | % | 56 | % | 57 | % |
(1) | The Red Mobile brand was launched in November 2008 by CURE. | |
(2) | Refers to other non-subscriber-related revenues consisting primarily of inbound international roaming fees, share in revenues from PLDT’s WeRoam and PLP services, a small number of leased line contracts, and revenues from Chikka, Wolfpac and other Smart subsidiaries. |
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• | “Smartalk 100” which offers five days of unlimited calls for Php100; and | ||
• | “Smartalk 500” which offers 30 days of unlimited calls for Php500 to any subscriber on the Smart network. |
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• | Smart Money,which is a reloadable payment card powered by MasterCard, enables subscribers to pay for their purchases by transferring money from their bank accounts to their Smart Money cards and reload theirSmart Buddy,Talk ‘N TextandSmart Bro accounts electronically; and | ||
• | Mobile Banking, launched in collaboration with various banks, allows subscribers to execute banking transactions such as balance inquiries and transfers over their mobile telephones. |
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2010 | 2009 | 2008 | ||||||||||
Number of local exchange line subscribers | 1,822,105 | 1,816,541 | 1,782,356 | |||||||||
Number of fixed line employees | 7,395 | 7,947 | 7,813 | |||||||||
Number of local exchange line subscribers per employee | 246 | 229 | 228 | |||||||||
Total local exchange service revenues (in millions) | Php | 15,321 | Php | 15,681 | Php | 15,923 | ||||||
Local exchange service revenues as a percentage of total fixed line service revenues | 31 | % | 31 | % | 32 | % | ||||||
Local exchange service revenues as a percentage of total service revenues | 10 | % | 10 | % | 10 | % |
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2010 | 2009 | 2008 | ||||||||||
Total call volumes (in million minutes) | 1,714 | 1,863 | 2,024 | |||||||||
Inbound call volumes (in million minutes) | 1,515 | 1,653 | 1,786 | |||||||||
Outbound call volumes (in million minutes) | 199 | 210 | 238 | |||||||||
Inbound-outbound call ratio | 7.6:1 | 7.9:1 | 7.5:1 | |||||||||
Total international long distance service revenues (in millions) | Php | 5,224 | Php | 6,255 | Php | 7,063 | ||||||
International long distance service revenues as a percentage of total fixed line service revenues | 11 | % | 12 | % | 14 | % | ||||||
International long distance service revenues as a percentage of total service revenues | 4 | % | 4 | % | 5 | % |
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Net Settlement | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in millions) | ||||||||||||
Saudi Arabia | US$ | 32 | US$ | 33 | US$ | 30 | ||||||
United States | 31 | 25 | 46 | |||||||||
United Arab Emirates | 14 | 20 | 20 | |||||||||
Japan | 11 | 17 | 14 | |||||||||
Qatar | 11 | 5 | 4 | |||||||||
Hongkong | 10 | 8 | 4 | |||||||||
Taiwan | 6 | 6 | 6 | |||||||||
Singapore | 4 | 5 | 5 | |||||||||
Canada | 3 | 9 | 9 | |||||||||
Others | 19 | 29 | 36 | |||||||||
Total | US$ | 141 | US$ | 157 | US$ | 174 | ||||||
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2010 | 2009 | 2008 | ||||||||||
Total call volumes (in million minutes) | 1,290 | 1,822 | 1,944 | |||||||||
Total national long distance service revenues (in million pesos) | 4,690 | 5,969 | 6,207 | |||||||||
National long distance service revenue as a percentage of total fixed line service revenues | 10 | % | 12 | % | 13 | % | ||||||
National long distance service revenue as a percentage of total service revenues | 3 | % | 4 | % | 4 | % |
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2010 | 2009 | 2008 | ||||||||||
Subscriber base: | ||||||||||||
Broadband | 665,027 | 576,687 | 448,826 | |||||||||
DSL | 643,048 | 559,664 | 432,583 | |||||||||
WeRoam | 21,979 | 17,023 | 16,243 | |||||||||
SWUP | 15,641 | 12,383 | 6,516 | |||||||||
Total data and other network service revenues (in million pesos) | 21,646 | 21,567 | 18,607 | |||||||||
Domestic | 15,637 | 16,391 | 14,155 | |||||||||
Broadband | 8,511 | 7,232 | 5,563 | |||||||||
DSL | 8,263 | 7,024 | 5,360 | |||||||||
WeRoam | 248 | 208 | 203 | |||||||||
Leased Lines and Others | 7,126 | 9,159 | 8,592 | |||||||||
International | ||||||||||||
Leased Lines and Others | 6,009 | 5,176 | 4,452 | |||||||||
Data and other network service revenues as a percentage of total fixed line service revenues | 44 | % | 42 | % | 38 | % | ||||||
Data and other network service revenues as a percentage of total service revenues | 14 | % | 14 | % | 12 | % |
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Cable System | Countries Being Linked | |
G-P | Guam and the Philippines | |
Asia-Pacific Cable Network 2 | Philippines, Hong Kong, Japan, Korea, Malaysia, Singapore, China and Taiwan | |
SEA-ME-WE-3 | Japan, Korea, China, Taiwan, Hong Kong, Macau, Philippines, Vietnam, Brunei, Malaysia, Singapore, Indonesia, Australia, Thailand, Myanmar, Sri Lanka, India, Pakistan, United Arab Emirates, Oman, Djibouti, Saudi Arabia, Egypt, Cyprus, Turkey, Greece, Italy, Morocco, Portugal, France, UK, Belgium and Germany | |
China-U.S. Cable | Japan, China, Taiwan, Korea, Guam and the U.S. Mainland | |
FLAG Cable | Japan, Korea, China, Hong Kong, Malaysia, Thailand, India, United Arab Emirates, Saudi Arabia, Egypt, Italy, Spain and UK | |
Southern Cross Cable | U.S. Mainland, Hawaii, Fiji, Australia and New Zealand | |
EAC Cable | Japan, Hong Kong, Korea, Taiwan, Singapore and the Philippines | |
PC-1, Japan-U.S. Cable and TGN | Japan and the U.S. | |
Asia-America Gateway | Malaysia, Singapore, Thailand, Vietnam, Brunei, Hong Kong, Philippines, Guam, Hawaii and the U.S. Mainland |
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• | begin installation and rollout of its 3G network no later than 18 months from the date of the award; | ||
• | start commercial operations no later than 30 months from the date of the award; and | ||
• | cover at least 80% of provincial capitals and 80% of chartered cities within five years. |
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Carrier | Spectrum System | Frequency Assignment | Bandwidth | |||
Smart | ETACS/GSM 900 | 897.5-905/942.5-950 MHz | 7.5 MHz | |||
GSM 1800 | 1725-1730/1820-1825 MHz | 5.0 MHz | ||||
1730-1732.5/1825-1827.5 MHz | 2.5 MHz | |||||
1735-1740/1830-1835 MHz | 5.0 MHz | |||||
1745-1750/1840-1845 MHz | 5.0 MHz | |||||
1780-1782.5/1875-1877.5 MHz | 2.5 MHz | |||||
3G (W-CDMA) | 1920-1935/2110-2125 MHz | 15.0 MHz | ||||
825-835/870-880 MHz | 10.0 MHz | |||||
SBI | AMPS/CDMA(1) | 824-825/869-870 MHz | 1.0 MHz | |||
845-846.5/890-891.5 MHz | 1.5 MHz | |||||
Wireless broadband | 2670-2690 MHz(2) | 20.0 MHz | ||||
2400-2483.5 MHz(2) | 73.0 MHz | |||||
3400-3590 MHz(2) | 94.0MHz | |||||
5470-5850 MHz(2) | 123.0MHz | |||||
CURE | 3G | 1955-1965/2145-2155 MHz | 10.0 MHz | |||
PDSI | BWA (WiMAX) | 2332.5-2362.5 MHz(3) | 30.0 MHz |
(1) | On January 8, 2010, the NTC approved the transfer of PCEV’s CPCN to SBI | |
(2) | SBI frequency assignments on these bands are non-contiguous and are on a per station and location basis | |
(3) | On May 27, 2010, the NTC adjusted PDSI’s frequency assignments from 2340-2370 MHz to 2332.5-2362.5 MHz, due to various technical considerations |
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• | On July 3, 2009, the NTC issued Memorandum Circular No. 03-07-2009, imposing an extension of the expiration of the prepaid loads from two months to various expiration periods ranging from three days to 120 days. Smart has been implementing the new validity period of prepaid loads since July 19, 2009. | ||
• | On July 7, 2009, the NTC amended its rules on broadcast messaging in Memorandum Circular No. 04-07-2009, which prohibits content and/or information providers from initiating push messages. It further requires that subscribers be the party to initiate any services with public telecommunication entities and/or content providers, be sent a notification when they subscribe for any service and be given an option whether to continue with the availed service. | ||
• | On July 23, 2009, the NTC issued Memorandum Circular No. 05-07-2009 mandating cellular operators, including Smart, to charge calls on a maximum six-second pulse basis instead of the previous per minute basis whether the subscriber is prepaid or postpaid. The NTC granted Smart the provisional authority to charge new rates and implement six second pulse scheme on December 5, 2009. Smart subsequently implemented the six seconds per pulse directive by billing on a six second per pulse basis, if subscribers entered additional dialing numbers as a prefix before the actual number. The NTC opposed Smart’s implementation of the six seconds per pulse directive. As of March 31, 2010, the matter is pending before the Court of Appeals and is the subject of a temporary restraining order preventing the NTC from implementing its six second per pulse billing directive. In December 2009, Smart and other CMTS providers challenged the implementation of the NTC memorandum circular before the Court of Appeals, which issued a writ of preliminary injunction preventing the NTC from implementing its six second per pulse billing directive. | ||
• | On December 28, 2010, the Court of Appeals promulgated a decision finding that the NTC had no basis to impose the rates it fixed for the six second pulse and that the CMTS operators have the option to file their rate applications anew. However, the Court ruled also that under the NTC memorandum circular, the six second pulse is the default mode and that the NTC has the power to regulate the rates of CMTS providers under Section 17 of R. A. 7925, even in the absence of ruinous competition, monopoly, cartel |
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or combination thereof in restraint of free competition. The NTC, through the Office of the Solicitor General filed a motion for reconsideration of the decision. Smart was required by the Court of Appeals to file its comment. |
(a) | guidelines on the mandatory interconnection of backhaul networks to the cable landing station, which were issued on October 7, 2008 and became effective on October 23, 2008; and | ||
(b) | guidelines on the interconnection of LECs in local calling areas that eliminate interconnection access charges between LECs within a local calling area, which were issued on May 30, 2008 and became effective on June 17, 2008. |
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• | 69% consisted of cable, wire and cellular facilities, including our DFON, subscriber cable facilities, inter-office trunking and toll cable facilities and cellular facilities; | ||
• | 15% consisted of central office equipment, including international gateway facilities, pure national toll exchanges and combined local and toll exchanges; | ||
• | 10% consisted of land and improvements and buildings, which we acquired to house our telecommunications equipment, personnel, inventory and/or fleet; | ||
• | 5% consisted of information origination and termination equipment, including pay telephones and radio equipment installed for customers use, and cables and wires installed within customers’ premises; and | ||
• | 1% consisted of other work equipment. |
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• | Wireless —wireless telecommunications services provided through our cellular service providers namely, Smart, PCEV (on August 17, 2009, Smart acquired the cellular business of PCEV, which is formerly known as Pilipino Telephone Corporation) and CURE; SBI, BOW, Airborne Access Corporation and PDSI, our wireless broadband service providers; Wolfpac and Chikka Group, our wireless content operators; and ACeS Philippines, our satellite operator; | ||
• | Fixed Line —fixed line telecommunications services primarily provided by PLDT. We also provide fixed line services through PLDT’s subsidiaries ClarkTel, SubicTel, Philcom and subsidiaries, Maratel, SBI, PDSI, BCC and PLDT Global, all of which together account for approximately 4% of our consolidated fixed line subscribers; and | ||
• | ICT —information and communications infrastructure and services for internet applications, internet protocol-based solutions and multimedia content delivery provided by ePLDT and BayanTrade Group; knowledge processing solutions provided by the SPi Group; customer relationship management provided by SPi CRM, (on April 8, 2010, SPi CRM, Parlance and Vocativ were merged wherein SPi CRM became the surviving entity); internet access and online gaming services provided by Infocom, Digital Paradise, netGames and Level Up!; and e-commerce, and IT-related services provided by other investees of ePLDT, as discussed in Note 10 — Investments in Associates and Joint Ventures to the accompanying consolidated financial statements in Item 18. |
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated adjusted EBITDA | 83,717 | 86,194 | 87,996 | |||||||||
Amortization of intangible assets | (388 | ) | (368 | ) | (377 | ) | ||||||
Depreciation and amortization | (26,277 | ) | (25,607 | ) | (24,709 | ) | ||||||
Asset impairment: | ||||||||||||
Investments in associates and joint ventures | (78 | ) | — | (282 | ) | |||||||
Property, plant and equipment | (120 | ) | (634 | ) | (104 | ) | ||||||
Goodwill and intangible assets | (1,243 | ) | (379 | ) | (2,450 | ) | ||||||
Prepayments and others | (55 | ) | (1,324 | ) | (23 | ) | ||||||
Consolidated operating profit for the year | 55,556 | 57,882 | 60,051 | |||||||||
Foreign exchange gains (losses) — net | 1,807 | 909 | (6,170 | ) | ||||||||
Equity share in net earnings (losses) of associates and joint ventures | 1,408 | 2 | (176 | ) | ||||||||
Interest income | 1,200 | 1,539 | 1,668 | |||||||||
Gains (losses) on derivative financial instruments — net | (1,741 | ) | (1,006 | ) | 3,115 | |||||||
Financing costs — net | (6,698 | ) | (6,556 | ) | (6,104 | ) | ||||||
Other income | 2,153 | 2,069 | 1,665 | |||||||||
Consolidated income before income tax | 53,685 | 54,839 | 54,049 | |||||||||
Provision for income tax | 13,426 | 14,744 | 19,073 | |||||||||
Consolidated net income for the year | 40,259 | 40,095 | 34,976 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated core income for the year | 42,028 | 41,138 | 38,214 | |||||||||
Foreign exchange gains (losses) — net | 1,819 | 908 | (6,170 | ) | ||||||||
Core income adjustment on equity share in net earnings of associates and joint ventures | (699 | ) | (517 | ) | — | |||||||
Gains (losses) on derivative financial instruments — net, excluding hedge cost | (1,307 | ) | (407 | ) | 3,934 | |||||||
Asset impairment on noncurrent assets | (1,492 | ) | (1,948 | ) | (2,486 | ) | ||||||
Net tax effect of aforementioned adjustments | (132 | ) | 607 | 825 | ||||||||
Net income for the year attributable to equity holders of PLDT | 40,217 | 39,781 | 34,317 | |||||||||
Net income for the year attributable to non-controlling interests | 42 | 314 | 659 | |||||||||
Consolidated net income for the year | 40,259 | 40,095 | 34,976 | |||||||||
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in millions) | ||||||||||||||||||||
For the year ended December 31, 2010 | ||||||||||||||||||||
Revenues | Php | 95,187 | Php | 48,951 | Php | 11,358 | Php(11,037 | ) | Php | 144,459 | ||||||||||
Expenses | 49,632 | 38,745 | 11,944 | (11,418 | ) | 88,903 | ||||||||||||||
Other income (expenses) | 1,235 | (2,946 | ) | 221 | (381 | ) | (1,871 | ) | ||||||||||||
Income (loss) before income tax | 46,790 | 7,260 | (365 | ) | — | 53,685 | ||||||||||||||
Provision for (benefit from) income tax | 11,414 | 2,050 | (38 | ) | — | 13,426 | ||||||||||||||
Net income (loss) for the year/ Segment profit (loss) for the year | 35,376 | 5,210 | (327 | ) | — | 40,259 | ||||||||||||||
Adjusted EBITDA for the year | 58,945 | 22,668 | 1,723 | 381 | 83,717 | |||||||||||||||
Adjusted EBITDA margin for the year(1) | 63 | % | 47 | % | 16 | % | — | 59 | % | |||||||||||
Core income for the year | 35,418 | 5,580 | 1,030 | — | 42,028 | |||||||||||||||
For the year ended December 31, 2009 | ||||||||||||||||||||
Revenues | 97,524 | 51,373 | 11,549 | (12,453 | ) | 147,993 | ||||||||||||||
Expenses | 52,432 | 39,081 | 11,289 | (12,691 | ) | 90,111 | ||||||||||||||
Other income (expenses) | 1,149 | (4,170 | ) | 216 | (238 | ) | (3,043 | ) | ||||||||||||
Income before income tax | 46,241 | 8,122 | 476 | — | 54,839 | |||||||||||||||
Provision for (benefit from) income tax | 12,514 | 2,258 | (28 | ) | — | 14,744 | ||||||||||||||
Net income for the year/ Segment profit for the year | 33,727 | 5,864 | 504 | — | 40,095 | |||||||||||||||
Adjusted EBITDA for the year | 59,411 | 25,215 | 1,330 | 238 | 86,194 | |||||||||||||||
Adjusted EBITDA margin for the year (1) | 62 | % | 49 | % | 12 | % | — | 59 | % | |||||||||||
Core income for the year | 33,026 | 7,502 | 613 | (3 | ) | 41,138 | ||||||||||||||
For the year ended December 31, 2008 | ||||||||||||||||||||
Revenues | 95,852 | 49,686 | 10,983 | (10,684 | ) | 145,837 | ||||||||||||||
Expenses | 47,589 | 35,733 | 13,267 | (10,803 | ) | 85,786 | ||||||||||||||
Other expenses | (2,640 | ) | (3,173 | ) | (1 | ) | (188 | ) | (6,002 | ) | ||||||||||
Income (loss) before income tax | 45,623 | 10,780 | (2,285 | ) | (69 | ) | 54,049 | |||||||||||||
Provision for (benefit from) income tax | 16,124 | 3,048 | (99 | ) | — | 19,073 | ||||||||||||||
Net income for the year/ Segment profit (loss) for the year | 29,499 | 7,732 | (2,186 | ) | (69 | ) | 34,976 | |||||||||||||
Adjusted EBITDA for the year | 60,967 | 25,854 | 1,056 | 119 | 87,996 | |||||||||||||||
Adjusted EBITDA margin for the year (1) | 65 | % | 52 | % | 10 | % | — | 62 | % | |||||||||||
Core income for the year | 30,250 | 7,890 | 138 | (64 | ) | 38,214 |
(1) | Adjusted EBITDA margin is derived as a percentage of service revenues. |
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Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 95,187 | 66 | Php | 97,524 | 66 | Php | (2,337 | ) | (2 | ) | |||||||||||||
Fixed line | 48,951 | 34 | 51,373 | 34 | (2,422 | ) | (5 | ) | ||||||||||||||||
Information and communications technology | 11,358 | 8 | 11,549 | 8 | (191 | ) | (2 | ) | ||||||||||||||||
Inter-segment transactions | (11,037 | ) | (8 | ) | (12,453 | ) | (8 | ) | 1,416 | (11 | ) | |||||||||||||
Consolidated | Php | 144,459 | 100 | Php | 147,993 | 100 | Php | (3,534 | ) | (2 | ) | |||||||||||||
Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 49,632 | 56 | Php | 52,432 | 58 | Php | (2,800 | ) | (5 | ) | |||||||||||||
Fixed line | 38,745 | 44 | 39,081 | 43 | (336 | ) | (1 | ) | ||||||||||||||||
Information and communications technology | 11,944 | 13 | 11,289 | 13 | 655 | 6 | ||||||||||||||||||
Inter-segment transactions | (11,418 | ) | (13 | ) | (12,691 | ) | (14 | ) | 1,273 | 10 | ||||||||||||||
Consolidated | Php | 88,903 | 100 | Php | 90,111 | 100 | Php | (1,208 | ) | (1 | ) | |||||||||||||
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Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 1,235 | (66 | ) | Php | 1,149 | (38 | ) | Php | 86 | 7 | |||||||||||||
Fixed line | (2,946 | ) | 158 | (4,170 | ) | 137 | 1,224 | (29 | ) | |||||||||||||||
Information and communications technology | 221 | (12 | ) | 216 | (7 | ) | 5 | 2 | ||||||||||||||||
Inter-segment transactions | (381 | ) | 20 | (238 | ) | 8 | (143 | ) | 60 | |||||||||||||||
Consolidated | Php | (1,871 | ) | 100 | Php | (3,043 | ) | 100 | Php | 1,172 | (39 | ) | ||||||||||||
Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 35,376 | 88 | Php | 33,727 | 84 | Php | 1,649 | 5 | |||||||||||||||
Fixed line | 5,210 | 13 | 5,864 | 15 | (654 | ) | (11 | ) | ||||||||||||||||
Information and communications technology | (327 | ) | (1 | ) | 504 | 1 | (831 | ) | (165 | ) | ||||||||||||||
Consolidated | Php | 40,259 | 100 | Php | 40,095 | 100 | Php | 164 | — | |||||||||||||||
Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 58,945 | 70 | Php | 59,411 | 69 | Php | (466 | ) | (1 | ) | |||||||||||||
Fixed line | 22,668 | 27 | 25,215 | 29 | (2,547 | ) | (10 | ) | ||||||||||||||||
Information and communications technology | 1,723 | 2 | 1,330 | 2 | 393 | 30 | ||||||||||||||||||
Inter-segment transactions | 381 | 1 | 238 | — | 143 | 60 | ||||||||||||||||||
Consolidated | Php | 83,717 | 100 | Php | 86,194 | 100 | Php | (2,477 | ) | (3 | ) | |||||||||||||
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Change | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 35,418 | 84 | Php | 33,026 | 80 | Php | 2,392 | 7 | |||||||||||||||
Fixed line | 5,580 | 13 | 7,502 | 18 | (1,922 | ) | (26 | ) | ||||||||||||||||
Information and communications technology | 1,030 | 3 | 613 | 2 | 417 | 68 | ||||||||||||||||||
Inter-segment transactions | — | — | (3 | ) | — | 3 | 100 | |||||||||||||||||
Consolidated | Php | 42,028 | 100 | Php | 41,138 | 100 | Php | 890 | 2 | |||||||||||||||
Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Cellular | Php | 86,399 | 91 | Php | 88,410 | 91 | Php | (2,011 | ) | (2 | ) | |||||||||||||
Wireless broadband, satellite and others | ||||||||||||||||||||||||
Wireless broadband | 6,286 | 7 | 5,383 | 5 | 903 | 17 | ||||||||||||||||||
Satellite and others | 1,145 | 1 | 2,036 | 2 | (891 | ) | (44 | ) | ||||||||||||||||
93,830 | 99 | 95,829 | 98 | (1,999 | ) | (2 | ) | |||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of cellular handsets, cellular subsriber identification module, or SIM,-packs and broadband data modems | 1,357 | 1 | 1,695 | 2 | (338 | ) | (20 | ) | ||||||||||||||||
Total Wireless Revenues | Php | 95,187 | 100 | Php | 97,524 | 100 | Php | (2,337 | ) | (2 | ) | |||||||||||||
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Increase (Decrease) | |||||||||||||||||||
2010 | 2009 | Amount | % | ||||||||||||||||
(in millions) | |||||||||||||||||||
Cellular service revenues | Php | 86,399 | Php | 88,410 | Php | (2,011 | ) | (2 | ) | ||||||||||
By service type | 83,779 | 85,922 | (2,143 | ) | (2 | ) | |||||||||||||
Prepaid | 77,231 | 79,284 | (2,053 | ) | (3 | ) | |||||||||||||
Postpaid | 6,548 | 6,638 | (90 | ) | (1 | ) | |||||||||||||
By component | 83,779 | 85,922 | (2,143 | ) | (2 | ) | |||||||||||||
Voice | 42,250 | 38,850 | 3,400 | 9 | |||||||||||||||
Data | 41,529 | 47,072 | (5,543 | ) | (12 | ) | |||||||||||||
Others(1) | 2,620 | 2,488 | 132 | 5 |
(1) | Refers to other non-subscriber-related revenues consisting primarily of inbound international roaming fees, share in revenues from PLDT’s WeRoam and PLP services, a small number of leased line contracts, and revenues from Chikka, Wolfpac and other Smart subsidiaries. |
Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Cellular subscriber base | 45,636,008 | 41,328,641 | 4,307,367 | 10 | ||||||||||||
Prepaid | 45,214,433 | 40,893,098 | 4,321,335 | 11 | ||||||||||||
Smart Buddy | 25,293,443 | 23,762,814 | 1,530,629 | 6 | ||||||||||||
Talk ’N Text | 18,967,381 | 17,050,713 | 1,916,668 | 11 | ||||||||||||
Red Mobile | 953,609 | 79,571 | 874,038 | 1,098 | ||||||||||||
Postpaid | 421,575 | 435,543 | (13,968 | ) | (3 | ) | ||||||||||
Systemwide traffic volumes (in millions) | ||||||||||||||||
Calls (in minutes) | 26,136 | 16,305 | 9,831 | 60 | ||||||||||||
Domestic | 23,110 | 13,371 | 9,739 | 73 | ||||||||||||
Inbound | 1,438 | 1,495 | (57 | ) | (4 | ) | ||||||||||
Outbound | 21,672 | 11,876 | 9,796 | 82 | ||||||||||||
International | 3,026 | 2,934 | 92 | 3 | ||||||||||||
Inbound | 2,817 | 2,738 | 79 | 3 | ||||||||||||
Outbound | 209 | 196 | 13 | 7 | ||||||||||||
SMS/Data count (in hits) | 341,113 | 287,921 | 53,192 | 18 | ||||||||||||
Text messages | 339,530 | 286,294 | 53,236 | 19 | ||||||||||||
Domestic | 339,011 | 285,847 | 53,164 | 19 | ||||||||||||
Inbound | 8,058 | 8,289 | (231 | ) | (3 | ) | ||||||||||
Outbound | 330,953 | 277,558 | 53,395 | 19 | ||||||||||||
Bucket-Priced | 312,634 | 258,190 | 54,444 | 21 | ||||||||||||
Standard | 18,319 | 19,368 | (1,049 | ) | (5 | ) | ||||||||||
International | 519 | 447 | 72 | 16 | ||||||||||||
Inbound | 211 | 136 | 75 | 55 | ||||||||||||
Outbound | 308 | 311 | (3 | ) | (1 | ) | ||||||||||
Value-Added Services | 1,557 | 1,608 | (51 | ) | (3 | ) | ||||||||||
Financial Services | 26 | 19 | 7 | 37 |
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Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Voice services: | ||||||||||||||||
Domestic | ||||||||||||||||
Inbound | Php | 5,203 | Php | 5,095 | �� | Php | 108 | 2 | ||||||||
Outbound | 20,632 | 16,534 | 4,098 | 25 | ||||||||||||
25,835 | 21,629 | 4,206 | 19 | |||||||||||||
International | ||||||||||||||||
Inbound | 14,698 | 15,287 | (589 | ) | (4 | ) | ||||||||||
Outbound | 1,717 | 1,934 | (217 | ) | (11 | ) | ||||||||||
16,415 | 17,221 | (806 | ) | (5 | ) | |||||||||||
Total | Php | 42,250 | Php | 38,850 | Php | 3,400 | 9 | |||||||||
• | “Smartalk 100” which offers five days of unlimited calls for Php100; and | ||
• | “Smartalk 500” which offers 30 days of unlimited calls for Php500 to any subscriber on the Smart network. |
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Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Text messaging | ||||||||||||||||
Domestic | Php | 37,478 | Php | 42,905 | Php | (5,427 | ) | (13 | ) | |||||||
Bucket-Priced | 23,138 | 26,797 | (3,659 | ) | (14 | ) | ||||||||||
Standard | 14,340 | 16,108 | (1,768 | ) | (11 | ) | ||||||||||
International | 1,423 | 1,668 | (245 | ) | (15 | ) | ||||||||||
38,901 | 44,573 | (5,672 | ) | (13 | ) | |||||||||||
Value-added services | ||||||||||||||||
Standard(1) | 1,012 | 1,057 | (45 | ) | (4 | ) | ||||||||||
Rich Media(2) | 1,083 | 998 | 85 | 9 | ||||||||||||
Pasa Load(3) | 493 | 413 | 80 | 19 | ||||||||||||
2,588 | 2,468 | 120 | 5 | |||||||||||||
Financial services | ||||||||||||||||
Smart Money | 34 | 27 | 7 | 26 | ||||||||||||
Mobile Banking | 6 | 4 | 2 | 50 | ||||||||||||
40 | 31 | 9 | 29 | |||||||||||||
Total | Php | 41,529 | Php | 47,072 | Php | (5,543 | ) | (12 | ) | |||||||
(1) | Includes standard services such as info-on-demand, ringtone and logo downloads, etc. | |
(2) | Includes Multimedia Messaging System, or MMS, internet browsing, General Packet Radio Service, or GPRS, etc. | |
(3) | A service which allows prepaid and postpaid subscribers to transfer small denominations of air time credits to other prepaid subscribers. |
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Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Prepaid | 4,321,335 | 6,066,630 | (1,745,295 | ) | (29 | ) | ||||||||||
Smart Buddy | 1,530,629 | 3,261,197 | (1,730,568 | ) | (53 | ) | ||||||||||
Talk ’N Text | 1,916,668 | 2,742,220 | (825,552 | ) | (30 | ) | ||||||||||
Red Mobile | 874,038 | 63,213 | 810,825 | 1,283 | ||||||||||||
Postpaid | (13,968 | ) | 37,407 | (51,375 | ) | (137 | ) | |||||||||
Total | 4,307,367 | 6,104,037 | (1,796,670 | ) | (29 | ) | ||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||
Prepaid | 1,868,812 | 2,144,244 | (1,212,389 | ) | 1,520,668 | 1,692,767 | 1,575,585 | 621,154 | 2,177,124 | |||||||||||||||||||||||
Smart Buddy | 1,271,132 | 730,346 | (588,862 | ) | 118,013 | 419,821 | 523,496 | 644,932 | 1,672,948 | |||||||||||||||||||||||
Talk ‘N Text | 394,984 | 562,375 | 128,786 | 830,523 | 1,256,907 | 1,019,162 | (32,419 | ) | 498,570 | |||||||||||||||||||||||
Red Mobile | 202,696 | 851,523 | (752,313 | ) | 572,132 | 16,039 | 32,927 | 8,641 | 5,606 | |||||||||||||||||||||||
Postpaid | 9,870 | (5,569 | ) | (21,266 | ) | 2,997 | 9,328 | 17,746 | 6,806 | 3,527 | ||||||||||||||||||||||
Total | 1,878,682 | 2,138,675 | (1,233,655 | ) | 1,523,665 | 1,702,095 | 1,593,331 | 627,960 | 2,180,651 | |||||||||||||||||||||||
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Gross(1) | Decrease | Net(2) | Decrease | |||||||||||||||||||||||||||||
2010 | 2009 | Amount | % | 2010 | 2009 | Amount | % | |||||||||||||||||||||||||
Prepaid | ||||||||||||||||||||||||||||||||
Smart Buddy | Php | 220 | Php | 261 | Php | (41 | ) | (16 | ) | Php | 174 | Php | 207 | Php | (33 | ) | (16 | ) | ||||||||||||||
Talk ’N Text | 139 | 161 | (22 | ) | (14 | ) | 115 | 133 | (18 | ) | (14 | ) | ||||||||||||||||||||
Red Mobile | 11 | 20 | (9 | ) | (45 | ) | 9 | 13 | (4 | ) | (31 | ) | ||||||||||||||||||||
Prepaid — Blended(3) | 183 | 218 | (35 | ) | (16 | ) | 147 | 175 | (28 | ) | (16 | ) | ||||||||||||||||||||
Postpaid — Smart | 1,678 | 1,817 | (139 | ) | (8 | ) | 1,257 | 1,313 | (56 | ) | (4 | ) | ||||||||||||||||||||
Prepaid and Postpaid Blended(4) | 198 | 235 | (37 | ) | (16 | ) | 158 | 188 | (30 | ) | (16 | ) |
(1) | Gross monthly ARPU is calculated by dividing gross cellular service revenues for the month, gross of discounts, allocated content-provider costs and interconnection income but excluding inbound roaming revenues, by the average number of subscribers in the month. | |
(2) | Net monthly ARPU is calculated by dividing gross cellular service revenues for the month, including interconnection income net of interconnection expense, but net of discounts and content-provider costs, by the average number of subscribers in the month. | |
(3) | The average monthly ARPU of Smart Buddy, Talk ’N Text and Red Mobile. | |
(4) | The average monthly ARPU of all prepaid and postpaid cellular subscribers. |
Prepaid | Postpaid | |||||||||||||||||||||||||||||||
Smart Buddy | Talk ’N Text | Red Mobile | Smart | |||||||||||||||||||||||||||||
Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | |||||||||||||||||||||||||
2010 | ||||||||||||||||||||||||||||||||
First Quarter | Php | 232 | Php | 184 | Php | 140 | Php | 115 | Php | 11 | Php | 8 | Php | 1,686 | Php | 1,286 | ||||||||||||||||
Second Quarter | 224 | 179 | 141 | 116 | 4 | 3 | 1,665 | 1,257 | ||||||||||||||||||||||||
Third Quarter | 207 | 163 | 135 | 112 | 6 | 5 | 1,661 | 1,229 | ||||||||||||||||||||||||
Fourth Quarter | 215 | 171 | 140 | 116 | 22 | 19 | 1,702 | 1,256 | ||||||||||||||||||||||||
2009 | ||||||||||||||||||||||||||||||||
First Quarter | 272 | 216 | 176 | 144 | 25 | 14 | 1,863 | 1,364 | ||||||||||||||||||||||||
Second Quarter | 269 | 212 | 168 | 138 | 16 | 10 | 1,816 | 1,278 | ||||||||||||||||||||||||
Third Quarter | 249 | 197 | 148 | 122 | 19 | 12 | 1,801 | 1,307 | ||||||||||||||||||||||||
Fourth Quarter | 252 | 203 | 152 | 127 | 18 | 15 | 1,791 | 1,304 |
(1) | Gross monthly ARPU is calculated based on the average of the gross monthly ARPUs for the quarter. | |
(2) | Net monthly ARPU is calculated based on the average of the net monthly ARPUs for the quarter. |
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Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Depreciation and amortization | Php | 13,243 | 27 | Php | 13,237 | 25 | Php | 6 | — | |||||||||||||||
Rent | 9,038 | 18 | 10,553 | 20 | (1,515 | ) | (14 | ) | ||||||||||||||||
Compensation and employee benefits(1) | 6,385 | 13 | 6,059 | 12 | 326 | 5 | ||||||||||||||||||
Repairs and maintenance | 5,058 | 10 | 4,340 | 8 | 718 | 17 | ||||||||||||||||||
Selling and promotions | 3,809 | 8 | 4,051 | 8 | (242 | ) | (6 | ) | ||||||||||||||||
Cost of sales | 3,587 | 7 | 4,363 | 8 | (776 | ) | (18 | ) | ||||||||||||||||
Professional and other contracted services | 3,113 | 6 | 2,904 | 6 | 209 | 7 | ||||||||||||||||||
Taxes and licenses | 1,683 | 3 | 2,022 | 4 | (339 | ) | (17 | ) | ||||||||||||||||
Communication, training and travel | 948 | 2 | 972 | 2 | (24 | ) | (2 | ) | ||||||||||||||||
Insurance and security services | 831 | 2 | 781 | 1 | 50 | 6 | ||||||||||||||||||
Asset impairment | 824 | 2 | 2,026 | 4 | (1,202 | ) | (59 | ) | ||||||||||||||||
Amortization of intangible assets | 134 | — | 126 | — | 8 | 6 | ||||||||||||||||||
Other expenses | 979 | 2 | 998 | 2 | (19 | ) | (2 | ) | ||||||||||||||||
Total | Php | 49,632 | 100 | Php | 52,432 | 100 | Php | (2,800 | ) | (5 | ) | |||||||||||||
(1) | Includes salaries and employee benefits, long-term incentive plan, or LTIP, pension and manpower rightsizing program, or MRP, costs. |
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Change | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Equity share in net earnings (losses) of associates | Php | 1,222 | Php | (68 | ) | Php | 1,290 | 1,897 | ||||||||
Foreign exchange gains — net | 865 | 387 | 478 | 124 | ||||||||||||
Interest income | 698 | 1,139 | (441 | ) | (39 | ) | ||||||||||
Gains on derivative financial instruments — net | 3 | 1,166 | (1,163 | ) | (100 | ) | ||||||||||
Financing costs — net | (2,683 | ) | (2,619 | ) | (64 | ) | 2 | |||||||||
Others | 1,130 | 1,144 | (14 | ) | (1 | ) | ||||||||||
Total | Php | 1,235 | Php | 1,149 | Php | 86 | 7 | |||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Fixed Line Services: | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Local exchange | Php | 15,321 | 31 | Php | 15,681 | 31 | Php | (360 | ) | (2 | ) | |||||||||||||
International long distance | 5,224 | 11 | 6,255 | 12 | (1,031 | ) | (16 | ) | ||||||||||||||||
National long distance | 4,690 | 10 | 5,969 | 12 | (1,279 | ) | (21 | ) | ||||||||||||||||
Data and other network | 21,646 | 44 | 21,567 | 42 | 79 | — | ||||||||||||||||||
Miscellaneous | 1,728 | 3 | 1,668 | 3 | 60 | 4 | ||||||||||||||||||
48,609 | 99 | 51,140 | 100 | (2,531 | ) | (5 | ) | |||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of computers,PLPunits and SIM cards | 342 | 1 | 233 | — | 109 | 47 | ||||||||||||||||||
Total Fixed Line Revenues | Php | 48,951 | 100 | Php | 51,373 | 100 | Php | (2,422 | ) | (5 | ) | |||||||||||||
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Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Total local exchange service revenues (in millions) | Php | 15,321 | Php | 15,681 | Php | (360 | ) | (2 | ) | |||||||
Number of fixed line subscribers | 1,822,105 | 1,816,541 | 5,564 | — | ||||||||||||
Postpaid | 1,703,998 | 1,637,981 | 66,017 | 4 | ||||||||||||
Prepaid | 118,107 | 178,560 | (60,453 | ) | (34 | ) | ||||||||||
Number of fixed line employees | 7,395 | 7,947 | (552 | ) | (7 | ) | ||||||||||
Number of fixed line subscribers per employee | 246 | 229 | 17 | 7 |
Decrease | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Total international long distance service revenues (in millions) | Php | 5,224 | Php | 6,255 | Php | (1,031 | ) | (16 | ) | |||||||
Inbound | 4,499 | 5,198 | (699 | ) | (13 | ) | ||||||||||
Outbound | 725 | 1,057 | (332 | ) | (31 | ) | ||||||||||
International call volumes (in million minutes, except call ratio) | 1,714 | 1,863 | (149 | ) | (8 | ) | ||||||||||
Inbound | 1,515 | 1,653 | (138 | ) | (8 | ) | ||||||||||
Outbound | 199 | 210 | (11 | ) | (5 | ) | ||||||||||
Inbound-outbound call ratio | 7.6:1 | 7.9:1 | — | — |
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Decrease | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Total national long distance service revenues (in millions) | Php | 4,690 | Php | 5,969 | Php | (1,279 | ) | (21 | ) | |||||||
National long distance call volumes (in million minutes) | 1,290 | 1,822 | (532 | ) | (29 | ) |
Increase (Decrease) | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
Data and other network service revenues (in millions) | Php | 21,646 | Php | 21,567 | Php | 79 | — | |||||||||
Domestic | 15,637 | 16,391 | (754 | ) | (5 | ) | ||||||||||
Broadband | 8,511 | 7,232 | 1,279 | 18 | ||||||||||||
DSL | 8,263 | 7,024 | 1,239 | 18 | ||||||||||||
WeRoam | 248 | 208 | 40 | 19 | ||||||||||||
Leased Lines and Others | 7,126 | 9,159 | (2,033 | ) | (22 | ) | ||||||||||
International | ||||||||||||||||
Leased Lines and Others | 6,009 | 5,176 | 833 | 16 | ||||||||||||
Subscriber base: | ||||||||||||||||
Broadband | 665,027 | 576,687 | 88,340 | 15 | ||||||||||||
DSL | 643,048 | 559,664 | 83,384 | 15 | ||||||||||||
WeRoam | 21,979 | 17,023 | 4,956 | 29 | ||||||||||||
SWUP | 15,641 | 12,383 | 3,258 | 26 |
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Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Depreciation and amortization | Php | 12,292 | 32 | Php | 11,619 | 30 | Php | 673 | 6 | |||||||||||||||
Compensation and employee benefits(1) | 11,692 | 30 | 10,637 | 27 | 1,055 | 10 | ||||||||||||||||||
Repairs and maintenance | 4,527 | 12 | 4,345 | 11 | 182 | 4 | ||||||||||||||||||
Professional and other contracted services | 3,199 | 8 | 2,485 | 6 | 714 | 29 | ||||||||||||||||||
Rent | 2,469 | 6 | 2,749 | 7 | (280 | ) | (10 | ) | ||||||||||||||||
Selling and promotions | 1,376 | 3 | 1,590 | 4 | (214 | ) | (13 | ) | ||||||||||||||||
Taxes and licenses | 780 | 2 | 755 | 2 | 25 | 3 | ||||||||||||||||||
Communication, training and travel | 627 | 2 | 658 | 2 | (31 | ) | (5 | ) | ||||||||||||||||
Insurance and security services | 434 | 1 | 488 | 1 | (54 | ) | (11 | ) | ||||||||||||||||
Cost of sales | 433 | 1 | 310 | 1 | 123 | 40 | ||||||||||||||||||
Asset impairment | 291 | 1 | 2,901 | 8 | (2,610 | ) | (90 | ) | ||||||||||||||||
Other expenses | 625 | 2 | 544 | 1 | 81 | 15 | ||||||||||||||||||
Total | Php | 38,745 | 100 | Php | 39,081 | 100 | Php | (336 | ) | (1 | ) | |||||||||||||
(1) | Includes salaries and employee benefits, LTIP, pension and MRP costs. |
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Change | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Foreign exchange gains — net | Php | 1,008 | Php | 532 | Php | 476 | 89 | |||||||||
Interest income | 484 | 402 | 82 | 20 | ||||||||||||
Losses on derivative financial instruments — net | (1,746 | ) | (2,180 | ) | 434 | (20 | ) | |||||||||
Financing costs — net | (3,856 | ) | (3,796 | ) | (60 | ) | 2 | |||||||||
Equity share in net losses of joint ventures | — | (98 | ) | 98 | 100 | |||||||||||
Others | 1,164 | 970 | 194 | 20 | ||||||||||||
Total | (Php | 2,946 | ) | (Php | 4,170 | ) | Php | 1,224 | (29 | ) | ||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Knowledge processing solutions | Php | 5,289 | 47 | Php | 5,215 | 45 | Php | 74 | 1 | |||||||||||||||
Customer relationship management | 2,823 | 25 | 3,319 | 29 | (496 | ) | (15 | ) | ||||||||||||||||
Internet and online gaming | 1,059 | 9 | 1,113 | 10 | (54 | ) | (5 | ) | ||||||||||||||||
Data center and others | 1,506 | 13 | 1,204 | 10 | 302 | 25 | ||||||||||||||||||
10,677 | 94 | 10,851 | 94 | (174 | ) | (2 | ) | |||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Point-product sales | 681 | 6 | 698 | 6 | (17 | ) | (2 | ) | ||||||||||||||||
Total ICT Revenues | Php | 11,358 | 100 | Php | 11,549 | 100 | Php | (191 | ) | (2 | ) | |||||||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2010 | % | 2009 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Compensation and employee benefits(1) | Php | 6,000 | 50 | Php | 6,418 | 57 | Php | (418 | ) | (7 | ) | |||||||||||||
Asset impairment | 1,323 | 11 | 134 | 1 | 1,189 | 887 | ||||||||||||||||||
Repairs and maintenance | 752 | 6 | 669 | 6 | 83 | 12 | ||||||||||||||||||
Cost of sales | 751 | 6 | 799 | 7 | (48 | ) | (6 | ) | ||||||||||||||||
Depreciation and amortization | 742 | 6 | 751 | 7 | (9 | ) | (1 | ) | ||||||||||||||||
Rent | 687 | 6 | 716 | 6 | (29 | ) | (4 | ) | ||||||||||||||||
Professional and other contracted services | 500 | 4 | 592 | 5 | (92 | ) | (16 | ) | ||||||||||||||||
Communication, training and travel | 461 | 4 | 500 | 4 | (39 | ) | (8 | ) | ||||||||||||||||
Amortization of intangible assets | 254 | 2 | 242 | 2 | 12 | 5 | ||||||||||||||||||
Taxes and licenses | 108 | 1 | 104 | 1 | 4 | 4 | ||||||||||||||||||
Selling and promotions | 103 | 1 | 113 | 1 | (10 | ) | (9 | ) | ||||||||||||||||
Insurance and security services | 79 | 1 | 68 | 1 | 11 | 16 | ||||||||||||||||||
Other expenses | 184 | 2 | 183 | 2 | 1 | 1 | ||||||||||||||||||
Total | Php | 11,944 | 100 | Php | 11,289 | 100 | Php | 655 | 6 | |||||||||||||||
(1) | Includes salaries and employee benefits, LTIP, pension and MRP costs. |
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Change | ||||||||||||||||
2010 | 2009 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Equity share in net earnings of associates | Php | 186 | Php | 168 | Php | 18 | 11 | |||||||||
Interest income | 35 | 28 | 7 | 25 | ||||||||||||
Gains on derivative financial instruments — net | 2 | 8 | (6 | ) | (75 | ) | ||||||||||
Foreign exchange losses — net | (66 | ) | (12 | ) | (54 | ) | 450 | |||||||||
Financing costs — net | (176 | ) | (171 | ) | (5 | ) | 3 | |||||||||
Others | 240 | 195 | 45 | 23 | ||||||||||||
Total | Php | 221 | Php | 216 | Php | 5 | 2 | |||||||||
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Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 97,524 | 66 | Php | 95,852 | 66 | Php | 1,672 | 2 | |||||||||||||||
Fixed line | 51,373 | 34 | 49,686 | 34 | 1,687 | 3 | ||||||||||||||||||
Information and communications technology | 11,549 | 8 | 10,983 | 7 | 566 | 5 | ||||||||||||||||||
Inter-segment transactions | (12,453 | ) | (8 | ) | (10,684 | ) | (7 | ) | (1,769 | ) | 17 | |||||||||||||
Consolidated | Php | 147,993 | 100 | Php | 145,837 | 100 | Php | 2,156 | 1 | |||||||||||||||
Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 52,432 | 58 | Php | 47,589 | 55 | Php | 4,843 | 10 | |||||||||||||||
Fixed line | 39,081 | 43 | 35,733 | 42 | 3,348 | 9 | ||||||||||||||||||
Information and communications technology | 11,289 | 13 | 13,267 | 16 | (1,978 | ) | (15 | ) | ||||||||||||||||
Inter-segment transactions | (12,691 | ) | (14 | ) | (10,803 | ) | (13 | ) | (1,888 | ) | 17 | |||||||||||||
Consolidated | Php | 90,111 | 100 | Php | 85,786 | 100 | Php | 4,325 | 5 | |||||||||||||||
Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 1,149 | (38 | ) | Php | (2,640 | ) | 44 | Php | 3,789 | 144 | |||||||||||||
Fixed line | (4,170 | ) | 137 | (3,173 | ) | 53 | (997 | ) | 31 | |||||||||||||||
Information and communications technology | 216 | (7 | ) | (1 | ) | — | 217 | 21,700 | ||||||||||||||||
Inter-segment transactions | (238 | ) | 8 | (188 | ) | 3 | (50 | ) | 27 | |||||||||||||||
Consolidated | Php | (3,043 | ) | 100 | Php | (6,002 | ) | 100 | Php | 2,959 | (49 | ) | ||||||||||||
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Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 33,727 | 84 | Php | 29,499 | 84 | Php | 4,228 | 14 | |||||||||||||||
Fixed line | 5,864 | 15 | 7,732 | 22 | (1,868 | ) | (24 | ) | ||||||||||||||||
Information and communications technology | 504 | 1 | (2,186 | ) | (6 | ) | 2,690 | 123 | ||||||||||||||||
Inter-segment transactions | — | — | (69 | ) | — | 69 | 100 | |||||||||||||||||
Consolidated | Php | 40,095 | 100 | Php | 34,976 | 100 | Php | 5,119 | 15 | |||||||||||||||
Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 59,411 | 69 | Php | 60,967 | 69 | Php | (1,556 | ) | (3 | ) | |||||||||||||
Fixed line | 25,215 | 29 | 25,854 | 30 | (639 | ) | (2 | ) | ||||||||||||||||
Information and communications technology | 1,330 | 2 | 1,056 | 1 | 274 | 26 | ||||||||||||||||||
Inter-segment transactions | 238 | — | 119 | — | 119 | 100 | ||||||||||||||||||
Consolidated | Php | 86,194 | 100 | Php | 87,996 | 100 | Php | (1,802 | ) | (2 | ) | |||||||||||||
Change | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 33,026 | 80 | Php | 30,250 | 79 | Php | 2,776 | 9 | |||||||||||||||
Fixed line | 7,502 | 18 | 7,890 | 21 | (388 | ) | (5 | ) | ||||||||||||||||
Information and communications technology | 613 | 2 | 138 | — | 475 | 344 | ||||||||||||||||||
Inter-segment transactions | (3 | ) | — | (64 | ) | — | 61 | 95 | ||||||||||||||||
Consolidated | Php | 41,138 | 100 | Php | 38,214 | 100 | Php | 2,924 | 8 | |||||||||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless Services: | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Cellular | Php | 88,410 | 91 | Php | 87,518 | 92 | Php | 892 | 1 | |||||||||||||||
Wireless broadband, satellite and others | ||||||||||||||||||||||||
Wireless broadband | 5,383 | 5 | 4,327 | 4 | 1,056 | 24 | ||||||||||||||||||
Satellite and others | 2,036 | 2 | 1,748 | 2 | 288 | 16 | ||||||||||||||||||
95,829 | 98 | 93,593 | 98 | 2,236 | 2 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of cellular handsets, cellular SIM-packs and broadband data modems | 1,695 | 2 | 2,259 | 2 | (564 | ) | (25 | ) | ||||||||||||||||
Total Wireless Revenues | Php | 97,524 | 100 | Php | 95,852 | 100 | Php | 1,672 | 2 | |||||||||||||||
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Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Cellular service revenues | Php | 88,410 | Php | 87,518 | Php | 892 | 1 | |||||||||
By service type | 85,922 | 85,079 | 843 | 1 | ||||||||||||
Prepaid | 79,284 | 78,743 | 541 | 1 | ||||||||||||
Postpaid | 6,638 | 6,336 | 302 | 5 | ||||||||||||
By component | 85,922 | 85,079 | 843 | 1 | ||||||||||||
Voice | 38,850 | 37,275 | 1,575 | 4 | ||||||||||||
Data | 47,072 | 47,804 | (732 | ) | (2 | ) | ||||||||||
Others(1) | 2,488 | 2,439 | 49 | 2 |
(1) | Refers to other non-subscriber-related revenues consisting primarily of inbound international roaming fees, revenues from Smart’s public calling offices and share in PLDT’s WeRoam and PLP services, a small number of leased line contracts, revenues from Wolfpac and other Smart subsidiaries |
Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Cellular subscriber base | 41,328,641 | 35,224,604 | 6,104,037 | 17 | ||||||||||||
Prepaid | 40,893,098 | 34,826,468 | 6,066,630 | 17 | ||||||||||||
Smart Buddy | 23,762,814 | 20,501,617 | 3,261,197 | 16 | ||||||||||||
Talk ’N Text(1) | 17,050,713 | 14,308,493 | 2,742,220 | 19 | ||||||||||||
Red Mobile(2) | 79,571 | 16,358 | 63,213 | 386 | ||||||||||||
Postpaid | 435,543 | 398,136 | 37,407 | 9 | ||||||||||||
Systemwide traffic volumes (in millions) | ||||||||||||||||
Calls (in minutes) | 16,305 | 9,192 | 7,113 | 77 | ||||||||||||
Domestic | 13,371 | 6,287 | 7,084 | 113 | ||||||||||||
Inbound | 1,495 | 1,654 | (159 | ) | (10 | ) | ||||||||||
Outbound | 11,876 | 4,633 | 7,243 | 156 | ||||||||||||
International | 2,934 | 2,905 | 29 | 1 | ||||||||||||
Inbound | 2,738 | 2,684 | 54 | 2 | ||||||||||||
Outbound | 196 | 221 | (25 | ) | (11 | ) | ||||||||||
SMS/Data count (in hits) | 287,921 | 258,246 | 29,675 | 11 | ||||||||||||
Text messages | 286,294 | 256,606 | 29,688 | 12 | ||||||||||||
Domestic | 285,847 | 256,181 | 29,666 | 12 | ||||||||||||
Inbound | 8,289 | 8,430 | (141 | ) | (2 | ) | ||||||||||
Outbound | 277,558 | 247,751 | 29,807 | 12 | ||||||||||||
Bucket-Priced | 258,190 | 226,937 | 31,253 | 14 | ||||||||||||
Standard | 19,368 | 20,814 | (1,446 | ) | (7 | ) | ||||||||||
International | 447 | 425 | 22 | 5 | ||||||||||||
Inbound | 136 | 125 | 11 | 9 | ||||||||||||
Outbound | 311 | 300 | 11 | 4 | ||||||||||||
Value-Added Services | 1,608 | 1,614 | (6 | ) | — | |||||||||||
Financial Services | 19 | 26 | (7 | ) | (27 | ) |
(1) | The transfer of PCEV’s cellular business to Smart was completed on August 17, 2009 | |
(2) | The Red Mobile brand was launched in November 2008 by CURE |
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Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Voice services: | ||||||||||||||||
Domestic | ||||||||||||||||
Inbound | Php | 5,095 | Php | 5,405 | (Php | 310 | ) | (6 | ) | |||||||
Outbound | 16,534 | 15,959 | 575 | 4 | ||||||||||||
21,629 | 21,364 | 265 | 1 | |||||||||||||
International | ||||||||||||||||
Inbound | 15,287 | 13,732 | 1,555 | 11 | ||||||||||||
Outbound | 1,934 | 2,179 | (245 | ) | (11 | ) | ||||||||||
17,221 | 15,911 | 1,310 | 8 | |||||||||||||
Total | Php | 38,850 | Php | 37,275 | Php | 1,575 | 4 | |||||||||
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Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Text messaging | ||||||||||||||||
Domestic | Php | 42,905 | Php | 43,477 | Php | (572 | ) | (1 | ) | |||||||
Bucket-Priced | 26,797 | 26,461 | 336 | 1 | ||||||||||||
Standard | 16,108 | 17,016 | (908 | ) | (5 | ) | ||||||||||
International | 1,668 | 1,808 | (140 | ) | (8 | ) | ||||||||||
44,573 | 45,285 | (712 | ) | (2 | ) | |||||||||||
Value-added services | ||||||||||||||||
Standard(1) | 1,057 | 1,325 | (268 | ) | (20 | ) | ||||||||||
Rich Media(2) | 998 | 679 | 319 | 47 | ||||||||||||
Pasa Load | 413 | 470 | (57 | ) | (12 | ) | ||||||||||
2,468 | 2,474 | (6 | ) | — | ||||||||||||
Financial services | ||||||||||||||||
Smart Money | 27 | 41 | (14 | ) | (34 | ) | ||||||||||
Mobile Banking | 4 | 4 | — | — | ||||||||||||
31 | 45 | (14 | ) | (31 | ) | |||||||||||
Total | Php | 47,072 | Php | 47,804 | Php | (732 | ) | (2 | ) | |||||||
(1) | Includes standard services such as info-on-demand, ringtone and logo download, etc. | |
(2) | Includes Multimedia Messaging System, or MMS, internet browsing, General Packet Radio Service, or GPRS, etc. |
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Our net subscriber activations for the years ended December 31, 2009 and 2008 were as follows: |
Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Prepaid | 6,066,630 | 5,127,318 | 939,312 | 18 | ||||||||||||
Smart Buddy | 3,261,197 | 504,293 | 2,756,904 | 547 | ||||||||||||
Talk ’N Text(1) | 2,742,220 | 4,606,667 | (1,864,447 | ) | (40 | ) | ||||||||||
Red Mobile(2) | 63,213 | 16,358 | 46,855 | 286 | ||||||||||||
Postpaid | 37,407 | 56,256 | (18,849 | ) | (34 | ) | ||||||||||
Total | 6,104,037 | 5,183,574 | 920,463 | 18 | ||||||||||||
(1) | The transfer of PCEV’s cellular business to Smart was completed on August 17, 2009 | |
(2) | The Red Mobile brand was launched in November 2008 by CURE |
2009 | 2008 | |||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||
Prepaid | 1,692,767 | 1,575,585 | 621,154 | 2,177,124 | 1,533,812 | 1,660,040 | 917,528 | 1,015,938 | ||||||||||||||||||||||||
Smart Buddy | 419,821 | 523,496 | 644,932 | 1,672,948 | 282,044 | 130,697 | 111,487 | (19,935 | ) | |||||||||||||||||||||||
Talk ‘N Text | 1,256,907 | 1,019,162 | (32,419 | ) | 498,570 | 1,251,768 | 1,529,343 | 806,041 | 1,019,515 | |||||||||||||||||||||||
Red Mobile | 16,039 | 32,927 | 8,641 | 5,606 | — | — | — | 16,358 | ||||||||||||||||||||||||
Postpaid | 9,328 | 17,746 | 6,806 | 3,527 | 1,117 | 5,027 | 17,816 | 32,296 | ||||||||||||||||||||||||
Total | 1,702,095 | 1,593,331 | 627,960 | 2,180,651 | 1,534,929 | 1,665,067 | 935,344 | 1,048,234 | ||||||||||||||||||||||||
Gross(1) | Decrease | Net(2) | Decrease | |||||||||||||||||||||||||||||
2009 | 2008 | Amount | % | 2009 | 2008 | Amount | % | |||||||||||||||||||||||||
Prepaid | ||||||||||||||||||||||||||||||||
Smart Buddy | Php | 261 | Php | 290 | Php | (29 | ) | (10 | ) | Php | 207 | Php | 230 | Php | (23 | ) | (10 | ) | ||||||||||||||
Talk ’N Text | 161 | 194 | (33 | ) | (17 | ) | 133 | 158 | (25 | ) | (16 | ) | ||||||||||||||||||||
Red Mobile | 20 | 48 | (28 | ) | (58 | ) | 13 | 39 | (26 | ) | (67 | ) | ||||||||||||||||||||
Prepaid — Blended(3) | 218 | 254 | (36 | ) | (14 | ) | 175 | 203 | (28 | ) | (14 | ) | ||||||||||||||||||||
Postpaid — Smart | 1,817 | 2,065 | (248 | ) | (12 | ) | 1,313 | 1,483 | (170 | ) | (11 | ) | ||||||||||||||||||||
Prepaid and Postpaid Blended(4) | 235 | 274 | (39 | ) | (14 | ) | 188 | 217 | (29 | ) | (13 | ) |
(1) | Gross monthly ARPU is calculated by dividing gross cellular service revenues for the month, including discounts, allocated content-provider costs and interconnection income but excluding inbound roaming revenues, by the average number of subscribers in the month. | |
(2) | Net monthly ARPU is calculated by dividing gross cellular service revenues for the month, including interconnection income net of interconnection expense, but net of discounts and content-provider costs, by the average number of subscribers in the month. | |
(3) | The average monthly ARPU of Smart Buddy, Talk ’N Text and Red Mobile. | |
(4) | The average monthly ARPU of all prepaid and postpaid cellular subscribers. |
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Prepaid | Postpaid | |||||||||||||||||||||||||||||||
Smart Buddy | Talk’N Text | Red Mobile | Smart | |||||||||||||||||||||||||||||
Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | |||||||||||||||||||||||||
2009 | ||||||||||||||||||||||||||||||||
First Quarter | Php | 272 | Php | 216 | Php | 176 | Php | 144 | Php | 25 | Php | 14 | Php | 1,863 | Php | 1,364 | ||||||||||||||||
Second Quarter | 269 | 212 | 168 | 138 | 16 | 10 | 1,816 | 1,278 | ||||||||||||||||||||||||
Third Quarter | 249 | 197 | 148 | 122 | 19 | 12 | 1,801 | 1,307 | ||||||||||||||||||||||||
Fourth Quarter | 252 | 203 | 152 | 127 | 18 | 15 | 1,791 | 1,304 | ||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||||||
First Quarter | 292 | 230 | 207 | 163 | — | — | �� | 2,013 | 1,472 | |||||||||||||||||||||||
Second Quarter | 294 | 232 | 199 | 159 | — | — | 2,134 | 1,510 | ||||||||||||||||||||||||
Third Quarter | 285 | 223 | 178 | 148 | — | — | 2,078 | 1,505 | ||||||||||||||||||||||||
Fourth Quarter | 291 | 234 | 192 | 162 | 48 | 39 | 2,037 | 1,445 |
(1) | Gross quarterly ARPU is calculated based on the average of the gross monthly ARPUs for the quarter. | |
(2) | Net quarterly ARPU is calculated based on the average of the net monthly ARPUs for the quarter. |
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless Services: | ||||||||||||||||||||||||
Depreciation and amortization | Php | 13,237 | 25 | Php | 11,975 | 25 | Php | 1,262 | 11 | |||||||||||||||
Rent | 10,553 | 20 | 9,267 | 20 | 1,286 | 14 | ||||||||||||||||||
Compensation and employee benefits(1) | 6,059 | 12 | 5,433 | 11 | 626 | 12 | ||||||||||||||||||
Cost of sales | 4,363 | 8 | 4,236 | 9 | 127 | 3 | ||||||||||||||||||
Repairs and maintenance | 4,340 | 8 | 4,230 | 9 | 110 | 3 | ||||||||||||||||||
Selling and promotions | 4,051 | 8 | 3,781 | 8 | 270 | 7 | ||||||||||||||||||
Professional and other contracted services | 2,904 | 6 | 2,529 | 5 | 375 | 15 | ||||||||||||||||||
Asset impairment | 2,026 | 4 | 1,006 | 2 | 1,020 | 101 | ||||||||||||||||||
Taxes and licenses | 2,022 | 4 | 1,872 | 4 | 150 | 8 | ||||||||||||||||||
Communication, training and travel | 972 | 2 | 1,091 | 2 | (119 | ) | (11 | ) | ||||||||||||||||
Insurance and security services | 781 | 1 | 722 | 2 | 59 | 8 | ||||||||||||||||||
Amortization of intangible assets | 126 | — | 133 | — | (7 | ) | (5 | ) | ||||||||||||||||
Provisions | — | — | 897 | 2 | (897 | ) | (100 | ) | ||||||||||||||||
Other expenses | 998 | 2 | 417 | 1 | 581 | 139 | ||||||||||||||||||
Total | Php | 52,432 | 100 | Php | 47,589 | 100 | Php | 4,843 | 10 | |||||||||||||||
(1) | Includes salaries and employee benefits, long-term incentive plan, or LTIP, pension and MRP costs. |
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Change | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Gains (losses) on derivative financial instruments — net | Php | 1,166 | Php | (241 | ) | Php | 1,407 | 584 | ||||||||
Interest income | 1,139 | 1,197 | (58 | ) | (5 | ) | ||||||||||
Foreign exchange gains (losses) — net | 387 | (1,771 | ) | 2,158 | 122 | |||||||||||
Equity share in net losses of associates | (68 | ) | (119 | ) | 51 | (43 | ) | |||||||||
Financing costs — net | (2,619 | ) | (2,029 | ) | (590 | ) | 29 | |||||||||
Others | 1,144 | 323 | 821 | 254 | ||||||||||||
Total | Php | 1,149 | Php | (2,640 | ) | Php | 3,789 | 144 | ||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Fixed Line Services: | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Local exchange | Php | 15,681 | 31 | Php | 15,923 | 32 | Php | (242 | ) | (2 | ) | |||||||||||||
International long distance | 6,255 | 12 | 7,063 | 14 | (808 | ) | (11 | ) | ||||||||||||||||
National long distance | 5,969 | 12 | 6,207 | 13 | (238 | ) | (4 | ) | ||||||||||||||||
Data and other network | 21,567 | 42 | 18,607 | 37 | 2,960 | 16 | ||||||||||||||||||
Miscellaneous | 1,668 | 3 | 1,466 | 3 | 202 | 14 | ||||||||||||||||||
51,140 | 100 | 49,266 | 99 | 1,874 | 4 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of computers | 233 | — | 420 | 1 | (187 | ) | (45 | ) | ||||||||||||||||
Total Fixed Line Revenues | Php | 51,373 | 100 | Php | 49,686 | 100 | Php | 1,687 | 3 | |||||||||||||||
Increase (Decrease) | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Total local exchange service revenues (in millions) | Php | 15,681 | Php | 15,923 | Php | (242 | ) | (2 | ) | |||||||
Number of fixed line subscribers | 1,816,541 | 1,782,356 | 34,185 | 2 | ||||||||||||
Postpaid | 1,637,981 | 1,533,687 | 104,294 | 7 | ||||||||||||
Prepaid | 178,560 | 248,669 | (70,109 | ) | (28 | ) | ||||||||||
Number of fixed line employees(1) | 7,947 | 7,813 | 134 | 2 | ||||||||||||
Number of fixed line subscribers per employee | 229 | 228 | 1 | — |
(1) | Increase in headcount was primarily due to the acquisition of Philcom. |
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Decrease | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Total international long distance service revenues (in millions) | Php | 6,255 | Php | 7,063 | Php | (808 | ) | (11 | ) | |||||||
Inbound | 5,198 | 5,667 | (469 | ) | (8 | ) | ||||||||||
Outbound | 1,057 | 1,396 | (339 | ) | (24 | ) | ||||||||||
International call volumes (in million minutes, except call ratio) | 1,863 | 2,024 | (161 | ) | (8 | ) | ||||||||||
Inbound | 1,653 | 1,786 | (133 | ) | (7 | ) | ||||||||||
Outbound | 210 | 238 | (28 | ) | (12 | ) | ||||||||||
Inbound-outbound call ratio | 7.9:1 | 7.5:1 | — | — |
Decrease | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Total national long distance service revenues (in millions) | Php | 5,969 | Php | 6,207 | Php | (238 | ) | (4 | ) | |||||||
National long distance call volumes (in million minutes) | 1,822 | 1,944 | (122 | ) | (6 | ) |
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Increase | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
Data and other network service revenues (in millions) | Php | 21,567 | Php | 18,607 | Php | 2,960 | 16 | |||||||||
Domestic | 16,391 | 14,155 | 2,236 | 16 | ||||||||||||
Broadband | 7,232 | 5,563 | 1,669 | 30 | ||||||||||||
DSL | 7,024 | 5,360 | 1,664 | 31 | ||||||||||||
WeRoam | 208 | 203 | 5 | 2 | ||||||||||||
Leased Lines and Others | 9,159 | 8,592 | 567 | 7 | ||||||||||||
International | ||||||||||||||||
Leased Lines and Others | 5,176 | 4,452 | 724 | 16 | ||||||||||||
Subscriber base: | ||||||||||||||||
Broadband | 576,687 | 448,826 | 127,861 | 28 | ||||||||||||
DSL | 559,664 | 432,583 | 127,081 | 29 | ||||||||||||
WeRoam | 17,023 | 16,243 | 780 | 5 | ||||||||||||
SWUP | 12,383 | 6,516 | 5,867 | 90 |
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Fixed Line Services: | ||||||||||||||||||||||||
Depreciation and amortization | Php | 11,619 | 30 | Php | 11,901 | 33 | Php | (282 | ) | (2 | ) | |||||||||||||
Compensation and employee benefits(1) | 10,637 | 27 | 9,093 | 25 | 1,544 | 17 | ||||||||||||||||||
Repairs and maintenance | 4,345 | 11 | 4,634 | 13 | (289 | ) | (6 | ) | ||||||||||||||||
Asset impairment | 2,901 | 8 | 888 | 3 | 2,013 | 227 | ||||||||||||||||||
Rent | 2,749 | 7 | 2,492 | 7 | 257 | 10 | ||||||||||||||||||
Professional and other contracted services | 2,485 | 6 | 2,143 | 6 | 342 | 16 | ||||||||||||||||||
Selling and promotions | 1,590 | 4 | 1,715 | 5 | (125 | ) | (7 | ) | ||||||||||||||||
Taxes and licenses | 755 | 2 | 769 | 2 | (14 | ) | (2 | ) | ||||||||||||||||
Communication, training and travel | 658 | 2 | 608 | 2 | 50 | 8 | ||||||||||||||||||
Insurance and security services | 488 | 1 | 487 | 1 | 1 | — | ||||||||||||||||||
Cost of sales | 310 | 1 | 356 | 1 | (46 | ) | (13 | ) | ||||||||||||||||
Provisions | — | — | 1 | — | (1 | ) | (100 | ) | ||||||||||||||||
Other expenses | 544 | 1 | 646 | 2 | (102 | ) | (16 | ) | ||||||||||||||||
Total | Php | 39,081 | 100 | Php | 35,733 | 100 | Php | 3,348 | 9 | |||||||||||||||
(1) | Includes salaries and employee benefits, LTIP, pension and MRP costs. |
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Change | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Foreign exchange gains (losses) — net | Php | 532 | Php | (4,513 | ) | Php | 5,045 | 112 | ||||||||
Interest income | 402 | 448 | (46 | ) | (10 | ) | ||||||||||
Equity share in net losses of joint ventures | (98 | ) | (74 | ) | (24 | ) | 32 | |||||||||
Gains (losses) on derivative financial instruments — net | (2,180 | ) | 3,444 | (5,624 | ) | (163 | ) | |||||||||
Financing costs — net | (3,796 | ) | (3,903 | ) | 107 | (3 | ) | |||||||||
Others | 970 | 1,425 | (455 | ) | (32 | ) | ||||||||||
Total | Php | (4,170 | ) | Php | (3,173 | ) | Php | (997 | ) | 31 | ||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Knowledge processing solutions | Php | 5,215 | 45 | Php | 5,272 | 48 | Php | (57 | ) | (1 | ) | |||||||||||||
Customer relationship management | 3,319 | 29 | 3,402 | 31 | (83 | ) | (2 | ) | ||||||||||||||||
Internet and online gaming | 1,113 | 10 | 976 | 9 | 137 | 14 | ||||||||||||||||||
Data center and others | 1,284 | 11 | 767 | 7 | 517 | 67 | ||||||||||||||||||
10,931 | 95 | 10,417 | 95 | 514 | 5 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Point-product sales | 618 | 5 | 566 | 5 | 52 | 9 | ||||||||||||||||||
Total ICT Revenues | Php | 11,549 | 100 | Php | 10,983 | 100 | Php | 566 | 5 | |||||||||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2009 | % | 2008 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
ICT Services: | ||||||||||||||||||||||||
Compensation and employee benefits(1) | Php | 6,418 | 57 | Php | 6,131 | 46 | Php | 287 | 5 | |||||||||||||||
Cost of sales | 799 | 7 | 660 | 5 | 139 | 21 | ||||||||||||||||||
Depreciation and amortization | 751 | 7 | 833 | 6 | (82 | ) | (10 | ) | ||||||||||||||||
Rent | 716 | 6 | 665 | 5 | 51 | 8 | ||||||||||||||||||
Repairs and maintenance | 669 | 6 | 573 | 4 | 96 | 17 | ||||||||||||||||||
Professional and other contracted services | 592 | 5 | 747 | 6 | (155 | ) | (21 | ) | ||||||||||||||||
Communication, training and travel | 500 | 4 | 573 | 4 | (73 | ) | (13 | ) | ||||||||||||||||
Amortization of intangible assets | 242 | 2 | 244 | 2 | (2 | ) | (1 | ) | ||||||||||||||||
Asset impairment | 134 | 1 | 2,286 | 17 | (2,152 | ) | (94 | ) | ||||||||||||||||
Selling and promotions | 113 | 1 | 203 | 2 | (90 | ) | (44 | ) | ||||||||||||||||
Taxes and licenses | 104 | 1 | 98 | 1 | 6 | 6 | ||||||||||||||||||
Insurance and security services | 68 | 1 | 61 | — | 7 | 11 | ||||||||||||||||||
Other expenses | 183 | 2 | 193 | 2 | (10 | ) | (5 | ) | ||||||||||||||||
Total | Php | 11,289 | 100 | Php | 13,267 | 100 | Php | (1,978 | ) | (15 | ) | |||||||||||||
(1) | Includes salaries and employee benefits, LTIP, pension and MRP costs. |
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Change | ||||||||||||||||
2009 | 2008 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Equity share in net earnings of associates | Php | 168 | Php | 17 | Php | 151 | 888 | |||||||||
Interest income | 28 | 22 | 6 | 27 | ||||||||||||
Gains (losses) on derivative financial instruments — net | 8 | (59 | ) | 67 | 114 | |||||||||||
Foreign exchange gains (losses) — net | (12 | ) | 93 | (105 | ) | (113 | ) | |||||||||
Financing costs — net | (171 | ) | (172 | ) | 1 | (1 | ) | |||||||||
Others | 195 | 98 | 97 | 99 | ||||||||||||
Total | Php | 216 | Php | (1 | ) | Php | 217 | 21,700 | ||||||||
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(1) | Technical Objectives — these include the upgrade and modernization of the wireless network in order to realize operating and cost efficiencies, provide greater resilience and redundancy, as well as investments in additional cable systems; | ||
(2) | Commercial Objectives — these include the provisioning of expanded capacity and coverage as well as new platforms to expand service offerings; and | ||
(3) | IT/Support Systems — these include the upgrade of our IT and support systems. |
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2010 | 2009 | 2008 | ||||||||||
(in millions) | ||||||||||||
Cash Flows | ||||||||||||
Net cash provided by operating activities | Php | 77,260 | Php | 74,386 | Php | 78,302 | ||||||
Net cash used in investing activities | 23,283 | 49,132 | 17,014 | |||||||||
Capital expenditures | 28,766 | 28,069 | 25,203 | |||||||||
Net cash used in financing activities | 55,322 | 20,293 | 45,464 | |||||||||
Net increase (decrease) in cash and cash equivalents | (1,641 | ) | 4,635 | 16,237 |
2010 | 2009 | |||||||
(in millions) | ||||||||
Capitalization | ||||||||
Interest-bearing financial liabilities: | ||||||||
Long-term portion of financial liabilities: | ||||||||
Long-term debt | Php | 75,879 | Php | 86,066 | ||||
Obligations under finance lease | 9 | 13 | ||||||
75,888 | 86,079 | |||||||
Current portion of interest-bearing financial liabilities: | ||||||||
Notes payable | — | 2,279 | ||||||
Long-term debt maturing within one year | 13,767 | 10,384 | ||||||
Obligations under finance lease maturing within one year | 34 | 51 | ||||||
13,801 | 12,714 | |||||||
Total interest-bearing financial liabilities | 89,689 | 98,793 | ||||||
Total equity | 97,069 | 98,575 | ||||||
Php | 186,758 | Php | 197,368 | |||||
Other Selected Financial Data | ||||||||
Total assets | Php | 277,815 | Php | 280,148 | ||||
Property, plant and equipment — net | 163,184 | 161,256 | ||||||
Cash and cash equivalents | 36,678 | 38,319 | ||||||
Short-term investments | 669 | 3,824 |
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Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | 5 years | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||
Debt(1): | 113,394 | 6,569 | 51,308 | 33,978 | 21,539 | |||||||||||||||
Principal | 92,590 | 6,206 | 38,263 | 29,335 | 18,786 | |||||||||||||||
Interest | 20,804 | 363 | 13,045 | 4,643 | 2,753 | |||||||||||||||
Lease obligations: | 8,003 | 4,383 | 1,710 | 948 | 962 | |||||||||||||||
Operating lease | 7,959 | 4,353 | 1,697 | 947 | 962 | |||||||||||||||
Finance lease | 44 | 30 | 13 | 1 | — | |||||||||||||||
Unconditional purchase obligations(2) | 797 | 271 | 263 | 263 | — | |||||||||||||||
Other obligations: | 68,714 | 50,247 | 13,895 | 683 | 3,889 | |||||||||||||||
Derivative financial liabilities(3): | 4,173 | — | 1,667 | 674 | 1,832 | |||||||||||||||
Long-term currency swaps | 4,173 | — | 1,667 | 674 | 1,832 | |||||||||||||||
Various trade and other obligations: | 64,541 | 50,247 | 12,228 | 9 | 2,057 | |||||||||||||||
Suppliers and contractors | 32,997 | 20,957 | 12,040 | — | — | |||||||||||||||
Utilities and related expenses | 16,477 | 16,446 | 10 | 3 | 18 | |||||||||||||||
Employee benefits | 3,853 | 3,853 | — | — | — | |||||||||||||||
Customers’ deposits | 2,223 | — | 178 | 6 | 2,039 | |||||||||||||||
Dividends | 2,086 | 2,086 | — | — | — | |||||||||||||||
Carriers | 1,866 | 1,866 | — | — | — | |||||||||||||||
Others | 5,039 | 5,039 | — | — | — | |||||||||||||||
Total contractual obligations | 190,908 | 61,470 | 67,176 | 35,872 | 26,390 | |||||||||||||||
(1) | Consist of notes payable and long-term debt, including current portion; gross of unamortized debt discount and debt issuance costs. | |
(2) | Based on the Amended ATPA with AIL. | |
(3) | Gross liabilities before any offsetting application. |
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Name | Age | Period during which individual has served as such | ||
Manuel V. Pangilinan | 64 | November 24, 1998 to present | ||
Napoleon L. Nazareno | 61 | November 24, 1998 to present | ||
Donald G. Dee(1) | 64 | September 30, 2008 to December 5, 2010 | ||
Helen Y. Dee | 66 | June 18, 1986 to present | ||
Ray C. Espinosa | 54 | November 24, 1998 to present | ||
Tatsu Kono | 58 | March 28, 2006 to present | ||
Rev. Fr. Bienvenido F. Nebres, S.J.(2) | 70 | November 24, 1998 to present | ||
Takashi Ooi | 49 | November 6, 2007 to present | ||
Juan B. Santos(3) | 72 | January 25, 2011 to present | ||
Oscar S. Reyes | 64 | April 5, 2005 to present | ||
Albert F. del Rosario(4) | 71 | November 24, 1998 to present | ||
Pedro E. Roxas(2) | 54 | March 1, 2001 to present | ||
Alfred V. Ty(2) | 43 | June 13, 2006 to present | ||
Tony Tan Caktiong | 58 | July 8, 2008 to present | ||
Ma. Lourdes C. Rausa-Chan(5) | 57 | March 29, 2011 to present |
(1) | Resigned effective December 6, 2010. | |
(2) | Independent Director. | |
(3) | Elected effective January 25, 2011. | |
(4) | Resigned effective March 25, 2011. | |
(5) | Elected effective March 29, 2011. |
Name | Age | Position(s) | Period during which individual has served as such | |||
Manuel V. Pangilinan | 64 | Chairman of the Board | February 19, 2004 to present | |||
Napoleon L. Nazareno | 61 | President and Chief Executive Officer | February 19, 2004 to present | |||
President and Chief Executive Officer of Smart | January 2000 to present | |||||
Ray C. Espinosa | 55 | Regulatory Affairs and Policies Head | March 4, 2008 to present | |||
Ma. Lourdes C. Rausa-Chan | 57 | Corporate Secretary | November 24, 1998 to present | |||
Senior Vice President | January 5, 1999 to present | |||||
Corporate Affairs and Legal Services Head | ||||||
Chief Governance Officer | March 4, 2008 to present | |||||
Anabelle L. Chua | 50 | Senior Vice President | February 26, 2002 to present | |||
Corporate Finance and Treasury Head | March 1, 1998 to present | |||||
Treasurer | February 1, 1999 to present | |||||
Chief Financial Officer of Smart | December 1, 2005 to present | |||||
Ernesto R. Alberto | 49 | Senior Vice President | May 15, 2003 to present | |||
Customer Sales and Marketing Head | February 1, 2008 to present | |||||
Corporate Business Head | May 15, 2003 to January 31, 2008 | |||||
Rene G. Bañez | 55 | Senior Vice President | January 25, 2005 to present | |||
Administration and Materials | January 1, 2008 to present | |||||
Management Head | ||||||
Chief Governance Officer | October 5, 2004 to March 3, 2008 | |||||
Jun R. Florencio | 55 | Senior Vice President | June 14, 2005 to present | |||
Internal Audit and Fraud Risk | February 16, 2006 to present | |||||
Management Head | ||||||
Audit and Assurance Head | September 1, 2000 to February 15, 2006 | |||||
Menardo G. Jimenez, Jr. | 47 | Senior Vice President | December 9, 2004 to present | |||
Human Resources Head and Business | August 1, 2010 to present | |||||
Transformation Office Head | ||||||
Business Transformation Office — | January 1, 2008 to July 2010 | |||||
Revenue Team Head | ||||||
Retail Business Head | June 16, 2004 to December 31, 2007 | |||||
Corporate Communications and | December 1, 2001 to June 15, 2004 | |||||
Public Affairs Head |
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Name | Age | Position(s) | Period during which individual has served as such | |||
George N. Lim | 58 | Senior Vice President | February 26, 1999 to present | |||
Network Services Assurance Head | October 16, 2010 to present | |||||
Business Transformation Office — | January 1, 2008 to present | |||||
Network Team Head | ||||||
Network Services Head | February 1, 2003 to December 31, 2007 | |||||
Alfredo S. Panlilio(1) | 47 | Senior Vice President | May 8, 2001 to December 15, 2010 | |||
International and Carrier Business Head | February 1, 2003 to June 15, 2004 | |||||
PLDT Global Corp. President | June 16, 2004 to December 15, 2010 | |||||
Claro Carmelo P. Ramirez | 50 | Senior Vice President | July 1, 1999 to present | |||
Office of the President and CEO | January 1, 2008 to present | |||||
Consumer Affairs Head | December 5, 2005 to December 31, 2007 | |||||
International and Carrier Business Head | June 16, 2004 to December 4, 2005 | |||||
Retail Business Head | February 1, 2003 to June 15, 2004 | |||||
Victorico P. Vargas(2) | 59 | Senior Vice President | February 15, 2000 to August 1, 2010 | |||
Human Resources Head | February 15, 2000 to August 1, 2010 | |||||
International and Carrier Business Head | March 1, 2007 to December 31, 2007 | |||||
Business Transformation Office Head | January 1, 2008 to August 1, 2010 | |||||
June Cheryl A. Cabal | 37 | First Vice President | May 6, 2008 to present | |||
Financial Reporting and Controllership Head | November 15, 2006 to present | |||||
Financial Reporting and Planning Head | May 1, 2002 to November 15, 2006 | |||||
Christopher H. Young | 53 | Chief Financial Advisor | November 24, 1998 to present |
(1) | Availed of the MRP effective at the close of business hours on December 15, 2010. | |
(2) | Availed of the MRP effective at the close of business hours on August 1, 2010. |
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Name of Companies | ||||
Name of Director | Public | Private | ||
Helen Y. Dee | EEI Corporation | AY Holdings, Inc. | ||
National Reinsurance Corporation of the Philippines (Chairman) | Great Life Financial Assurance Corporation Great Pacific Life Assurance Corp. | |||
Petro Energy Resources Corporation | Hi-Eisai Pharmaceuticals, Inc. (Chairman) | |||
Rizal Commercial Banking Corporation (Chairman) | Honda Cars, Kalookan | |||
Seafront Resources Corporation | Honda Cars Philippines, Inc. | |||
Bankard, Inc. | Isuzu Philippines, Inc. | |||
La Funeraria Paz, Inc. (Chairman) | ||||
Landev Corp. (Chairman) | ||||
Malayan Insurance Company (Chairman) | ||||
Manila Memorial Park Cemetery, Inc. (Chairman) | ||||
Mapua Information Technology Center, Inc. (Chairman) | ||||
Merchants Bank (Chairman) | ||||
MICO Equities, Inc. | ||||
Pan Malayan Express | ||||
Pan Malayan Management and Investment Corporation (Vice Chairman) | ||||
Pan Malayan Realty Corp. (Chairman) | ||||
RCBC Forex Brokers Corp.(Chairman) | ||||
RCBC Savings Bank (Chairman) | ||||
South Western Cement Corporation (Chairman) | ||||
Xamdu Motors, Inc. (Chairman) | ||||
Ray C. Espinosa | Cyber Bay Corporation | ABC Development Corporation |
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Name of Companies | ||||
Name of Director | Public | Private | ||
Lepanto Consolidated Mining Company (Independent Director) | Beacon Electric Asset Holdings, Inc. | |||
Metro Pacific Investments Corporation | Bonifacio Communications Corporation | |||
Manila Electric Company | ePDS, Inc. | |||
Philweb Corporation (Vice Chairman) | Meralco PowerGen Corporation | |||
Metro Pacific Assets Holdings, Inc. | ||||
Metro Pacific Resources, Inc. | ||||
Philippine Telecommunications Investment Corporation | ||||
Oscar S. Reyes | Alcorn Gold Resources, Inc. (Independent Director) | Mindoro Resources Ltd. | ||
Ayala Land, Inc. (Independent Drector) | Petrolift, Inc. (Independent Director) | |||
Bank of the Philippine Islands | Smart Communications, Inc. | |||
Basic Energy Corporation (Independent Director) | Sun Life Dollar Advantage Fund, Inc. (Independent Director) | |||
Manila Water Company, Inc. (Independent Director) | Sun Life Dollar Abundance Fund, Inc. (Independent Director) | |||
Pepsi Cola Products Philippines, Inc. (Independent Director) | Sun Life Financial Plans, Inc. (Independent Director) |
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2011 | 2010 | 2009 | ||||||||||
Estimate | Actual | |||||||||||
(in millions) | ||||||||||||
President and CEO(1)and four most highly compensated key officers: | ||||||||||||
Salary(2) | Php55 | Php51 | Php47 | |||||||||
Bonus(3) | 14 | 12 | 10 | |||||||||
Other compensation(4) | 46 | 225 | 52 | |||||||||
115 | 288 | 109 | ||||||||||
All other key officers, other officers and directors as a group (excluding the President and CEO and four most highly compensated key officers): | ||||||||||||
Salary(2) | 227 | 232 | 204 | |||||||||
Bonus(3) | 62 | 61 | 54 | |||||||||
Other compensation(4) | 215 | 1,087 | 246 | |||||||||
Php504 | Php1,380 | Php504 | ||||||||||
(1) | The President and CEO receives compensation from Smart but not from PLDT. | |
(2) | Basic monthly salary. | |
(3) | Includes longevity pay, mid-year bonus, 13th month and Christmas bonus. | |
(4) | Includes variable pay and other payments. Variable pay is based on an annual incentive system that encourages and rewards both individual and group/team performance and is tied to the achievement of Corporate/Unit/Customer Satisfaction Objectives. It covers regular officers and executives of PLDT and is based on a percentage of their guaranteed annual cash compensation. The 2010 other compensation includes LTIP payments during the year. |
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Shares of | Shares of | |||||||
Name of Owner | Common Stock | Preferred Stock | ||||||
Manuel V. Pangilinan | 227,450 | (1) | 360 | |||||
Napoleon L. Nazareno | 13,927 | (1) | 495 | |||||
Helen Y. Dee | 98 | 180 | ||||||
Ray C. Espinosa | 18,743 | (1) | — | |||||
Takashi Ooi | 1 | — | ||||||
Tatsu Kono | 100 | — | ||||||
Rev. Fr. Bienvenido F. Nebres, S.J. | 2 | — | ||||||
Oscar S. Reyes | 1 | 360 | ||||||
Albert F. del Rosario(2) | 140,005 | (3) | 2,100 | |||||
Pedro E. Roxas | 21 | 540 | ||||||
Juan B. Santos(4) | 2 | 360 | ||||||
Alfred V. Ty | 1 | — | ||||||
Tony Tan Caktiong | 1 | 50 | ||||||
Ma. Lourdes C. Rausa-Chan | 699 | (1) | 350 | |||||
Ernesto R. Alberto | 9,000 | (1) | — | |||||
Rene G. Bañez | 1 | 540 | ||||||
Anabelle L. Chua | 13,878 | (1) | — | |||||
Jun R. Florencio | 15 | 530 | ||||||
Menardo G. Jimenez, Jr. | 22 | — | ||||||
George N. Lim | 5,356 | (1) | 360 | |||||
Claro Carmelo P. Ramirez | 11,500 | — | ||||||
June Cheryl A. Cabal | — | — | ||||||
Christopher H. Young | 54,313 | (1) | — |
(1) | Includes PLDT common shares that have been lodged with the Philippine Depository and Trust Co., or PDTC. | |
(2) | Resigned effective March 25, 2011. | |
(3) | Out of the 140,005 common shares, 140,004 common shares are under the name of Albert F. del Rosario and/or Margaret Gretchen del Rosario. | |
(4) | Elected effective January 25, 2011. |
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• | to review and evaluate the qualifications, performance and independence of the external auditors and the lead partner of the external auditors; | ||
• | to select and appoint the external auditors and to remove or replace the external auditors; | ||
• | to review and approve in consultation with the head of the internal audit organization and the chief financial advisor the fees charged by the external auditors for audit and non-audit services; | ||
• | to pre-approve all audit and non-audit services to be provided by and all fees to be paid to the external auditors; | ||
• | to ensure that the external auditors prepare and deliver annually the statement as to independence, to discuss with the external auditors any relationships or services disclosed in such statements that may impact the objectivity, independence or quality of services of said external auditors and to take appropriate action in response to such statement to satisfy itself of the external auditor’s independence; |
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• | to ensure that the external auditors or the lead partner of the external auditors having the primary responsibility for the audit of PLDT’s accounts is rotated at least once every five years; | ||
• | to advise the external auditors that they are expected to provide the committee a timely analysis of significant/critical financial reporting issues and practices; | ||
• | to obtain assurance from the external auditors that the audit was conducted in a manner consistent with the requirement under applicable rules; and | ||
• | to resolve disagreements between management and the external auditors regarding financial reporting. |
• | Each voting member of the audit committee is an independent director as determined by the board of directors; | ||
• | In the performance of their oversight responsibilities, the audit committee has reviewed and discussed our financial statements as at and for the year ended December 31, 2009 with management, which has the primary responsibility for the financial statements, and with SGV & Co., our independent auditor, who is responsible for expressing an opinion on the conformity of our financial statements with generally accepted accounting principles; | ||
• | The audit committee has discussed with SGV & Co. the matters required to be discussed by the Statement on Auditing Standards No. 61 (Communication with Audit Committees) as modified or supplemented; | ||
• | The audit committee has received written disclosures and the letter from SGV & Co. pursuant to Rule 3526 of the Public Company Accounting Oversight Board (Communication with Audit Committees Concerning Independence) and has discussed with SGV & Co. its independence from the PLDT Group and the PLDT Group’s management; | ||
• | The audit committee likewise discussed with our internal audit group and SGV & Co. the overall scope and plans for their respective audits. The audit committee also met with our internal audit group and representatives of SGV & Co. to discuss the results of their examinations, their evaluations of our internal controls and the overall quality of our financial reporting; | ||
• | Based on the reviews and discussions referred to above, in reliance on management and SGV & Co. and subject to the limitations of the audit committee’s role, the audit committee recommended to our board of directors and our board has approved, the inclusion of our financial statements as at and for the year ended December 31, 2009 in our Annual Report to the Stockholders and to the Philippine SEC and U.S. SEC on Form 17-A; and | ||
• | Based on a review of SGV & Co.’s performance and qualifications, including consideration of management’s recommendation, the audit committee approved the appointment of SGV & Co. as our independent auditor. |
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1. | To develop and recommend to the board for approval and oversee the implementation of corporate governance principles and policies; | ||
2. | To review and evaluate the qualifications of the persons nominated for election as directors (including independent directors) or other positions requiring board appointment; | ||
3. | To identify the qualified nominees and recommend that the board select and recommend such qualified nominees for election as directors/independent directors at the annual meeting of shareholders; and | ||
4. | To provide an assessment on our board’s effectiveness in the process of replacing or appointing new directors or members of the board committees. |
1. | To provide guidance to and assist our board of directors in developing a compensation philosophy or policy consistent with our culture, strategy and control environment; | ||
2. | To oversee the development and administration of our compensation programs; and | ||
3. | To review and approve corporate goals and objectives relevant to the compensation of our chief executive officer, evaluate the performance of our chief executive officer in light of those goals and objectives, and set the compensation level of our chief executive officer based on such evaluation. |
1. | To review and approve our technology strategy and roadmap, and to review and advise our board on major technology trends and strategies; | ||
2. | To evaluate and advise our board on actual and proposed technology investments and transactions; | ||
3. | To review and submit to the board recommendations regarding management’s formulation and execution and overall performance in achieving technology-related strategic goals and objectives; and | ||
4. | To recommend to the board approaches to acquiring and maintaining technology positions and maximizing our access to relevant technologies, and to ensure optimized contribution of technology to our business strategy and growth targets. |
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(b) | any bankruptcy petition filed by or against any business of which a director/independent director or officer or person nominated for election as a director/independent director or officer was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | ||
(c) | any conviction by final judgment in a criminal proceeding, domestic or foreign, or any criminal proceeding, domestic or foreign, pending against any director/independent director or officer or person nominated for election as a director/independent director or officer, except as noted below; | ||
(d) | any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or otherwise limiting the involvement of any director/independent director or officer or person nominated for election as a director/independent director or officer in any type of business, securities, commodities or banking activities; and |
1. | Mr. Napoleon L. Nazareno and other directors and officers of the former PDCP Bank and some officers of the BSP and Development Bank of the Philippines (hereinafter the “Respondents”), were charged in a complaint docketed as I.S. No. 2004-631 filed by Chung Hing Wong/Unisteel/Unisco Metals, Inc. (the “Complainants”) with the Department of Justice, or DOJ, for alleged syndicated estafa, estafa thru falsification of documents, other deceits, malversation and robbery. In the complaint-affidavit, the Complainants alleged that the officers and directors of PDCP Bank deceived the Complainants to secure a loan from PDCP Bank through misrepresentation and with the sinister purpose of taking over the Complainants’ corporation. As stated in Mr. Nazareno’s counter-affidavit, the charges against him are manifestly unmeritorious since he has not personally met the Complainants, nor is he a party to the questioned transactions and, as such, could not have deceived the Complainants in any manner. The complaint was referred to the Office of the Ombudsman, or OMB, by the DOJ on October 30, 2007 considering that some of the Respondents are public officers and the offenses charged were committed in the performance of their official functions. | ||
Meanwhile, on July 23, 2008, the Complainants filed with the DOJ a Motion for Reconsideration of a Resolution of the DOJ dated September 7, 2007 dismissing their complaint. It appears that prior to forwarding the case records to the OMB, the DOJ has prepared a Resolution recommending the dismissal of all the charges against the Respondents but did not release the said Resolution to the parties because it wanted the OMB to conduct a review of the DOJ Resolution in view of the fact that some of the Respondents are public officers. | |||
In an Order dated July 30, 2008, the OMB confirmed that it was conducting a review of the said DOJ Resolution for the abovestated reason and that its authority relative to the case forwarded to it by the DOJ is limited to conducting a review of the DOJ Resolution and not to conduct another preliminary investigation of the case. | |||
In the OMB’s Review and Recommendation dated November 28, 2008, the OMB approved the DOJ Resolution dated September 7, 2007 dismissing the complaint and referred the case to the DOJ for appropriate action. | |||
The Complainants filed separate Motions for Reconsideration before the DOJ and OMB on July 16, 2008 and December 1, 2009, respectively. On December 16, 2009, the DOJ issued a Resolution |
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denying the Complainants’ Motion for Reconsideration for lack of merit. In response, the Complainants filed a Petition for Review with the Secretary of Justice on March 2, 2010. Mr. Nazareno and the other Respondents have filed their respective Comments to the petition, which remain pending to date with the Office of the Secretary of Justice. | |||
With respect to the Complainants’ Motion for Reconsideration with the OMB, the latter issued an Order dated December 4, 2009 denying the same and affirming its Review and Recommendation of November 28, 2008. In response, the Complainants filed a Petition for Certiorari with the Court of Appeals (“CA”) on July 12, 2010. In a Resolution dated July 26, 2010, the CA dismissed the petition for lack of jurisdiction. The Complainants filed a Motion for Reconsideration on August 17, 2010. Acting on the said motion, the CA issued a Resolution dated September 1, 2010, requiring the Respondents to file their Comment to the motion. On September 28, 2010, the Respondents through counsel filed their Opposition to the Complainants’ Motion for Reconsideration. In a Resolution dated December 1, 2010, the CA noted the respective Comments and/or Opposition filed by the Respondents and considered the Complainants’ Motion for Reconsideration submitted for resolution. | |||
2. | Atty. Ma. Lourdes C. Rausa-Chan and other former corporate secretaries/assistant corporate secretaries of Steniel Cavite Packaging Corporation, Metro Paper and Packaging Products, Inc., AR Packaging Corporation and Starpack Philippines Corporation, are respondents in a complaint docketed as OMB C-C-04-0363-H (CPL No. C-04-1248), filed with the OMB. The complaint is for alleged: (a) violation of Republic Act No. 3019 (otherwise known as the Anti-Graft and Corrupt Practices Act); (b) estafa through falsification of public documents; (c) falsification of public documents under Article 171, in relation to Article 172, of the Revised Penal Code; (d) infidelity in the custody of public documents under Article 226 of the RPC; and (e) grave misconduct. It relates to various tax credit certificates (allegedly fraudulent, with spurious and fake supporting documents) issued to Victory Textile Mills, Inc. (allegedly, a non-existent corporation with fictitious incorporators and directors) and transferred to several companies including the aforesaid companies. The complaints against Atty. Rausa-Chan involve the first two offenses only and in her capacity as corporate secretary of Metro Paper and Packaging Products, Inc. In the opinion of the legal counsel of Atty. Rausa-Chan, there are no legal and factual bases for her inclusion as respondent in this complaint. Atty. Rausa-Chan had no participation or involvement in the alleged anomalous acquisition and transfer of the subject tax credit certificates. The case is still pending with the OMB. |
2010 | 2009 | 2008 | ||||||||||
PLDT Group | 28,770 | 29,035 | 29,904 | |||||||||
Wireless | 5,165 | 5,507 | 5,602 | |||||||||
Fixed Line | 7,395 | 7,947 | 7,813 | |||||||||
ICT | 16,210 | 15,581 | 16,489 | |||||||||
PLDT Only | 7,008 | 7,543 | 7,590 |
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Name and Address | Name of Beneficial | Number of | ||||||||||||
Title | of Record Owner and | Place of | Owner and Relationship | Shares Held of | Percentage | |||||||||
of Class | Relationship With Issuer | Incorporation | with Record Owner | Record | of Class | |||||||||
Common | Philippine Telecommunications | Philippine | Same as Record Owner | 26,034,263 | (2) | 13.94 | ||||||||
Investment Corporation(1) | Corporation | |||||||||||||
12th Floor Ramon Cojuangco Bldg. Makati Avenue, Makati City | ||||||||||||||
Common | Metro Pacific Resources, Inc.(3) | Philippine | Same as Record Owner | 15,745,172 | (2) | 8.43 | ||||||||
c/o Corporate Secretary | Corporation | |||||||||||||
18th Floor, Liberty Center, 104 H. V. dela Costa St. Salcedo Village, Makati City | ||||||||||||||
Common | NTT Communications Corporation(4) | Japanese | See Footnote (5) | 12,633,487 | 6.76 | |||||||||
1-1-6 Uchisaiwai-cho | Corporation | |||||||||||||
1-Chome, Chiyoda-ku Tokyo 100-8019, Japan | ||||||||||||||
Common | NTT DoCoMo, Inc.(6) | Japanese | See Footnote (5) | 18,234,821 | (7) | 9.76 | ||||||||
41st Floor, Sanno Park Tower | Corporation | |||||||||||||
2-11-1 Nagata-cho, Chiyoda-ku Tokyo 100-6150, Japan | ||||||||||||||
Common | Social Security System(8) | Philippine | Same as Record Owner | 5,024,789 | (9) | 2.69 | ||||||||
SSS Building | Corporation | |||||||||||||
East Avenue, Quezon City | ||||||||||||||
Common | PCD Nominee Corporation(10) | Philippine | See Footnote (10) | 53,084,846 | 28.42 | |||||||||
37/F Enterprise Building, Tower I | Corporation | |||||||||||||
Ayala Avenue cor. Paseo de Roxas St. Makati City | ||||||||||||||
Common | J. P. Morgan Asset Holdings | HongKong | See Footnote (11) | 45,102,238 | 24.15 | |||||||||
(HK) Limited(11) | Corporation | |||||||||||||
(various accounts) 20/F Chater House 8 Connaught Road Central, Hongkong | ||||||||||||||
Common | Lazard Asset Management LLC(12) | Delaware Corporation | See Footnote (12) | 13,525,292 | 7.24 |
(1) | Based on a resolution adopted by the Board of Directors of PTIC, the Chairman of the Board of PTIC, Mr. Manuel V. Pangilinan, has the continuing authority to represent PTIC at any and all meetings of the stockholders of a corporation in which PTIC owns of record or beneficially any shares of stock or other voting security, and to sign and deliver, in favor of any person he may deem fit, a proxy or other power of attorney, with full power of delegation and substitution, authorizing his designated proxy or attorney-in-fact to vote any and all shares of stock and other voting securities owned of record or beneficially by PTIC at any and all meetings of the stockholders of the corporation issuing such shares of stock or voting securities. | |
(2) | First Pacific Group beneficially owned 26% of the outstanding common stock of PLDT as at February 28, 2011 by virtue of PLDT common |
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shareholdings by intermediate holding companies, including PTIC and MPRI. | ||
(3) | Based on a resolution adopted by the Board of Directors of MPRI, Mr. Manuel V. Pangilinan has been appointed as proxy or duly authorized representative of MPRI to represent and vote the PLDT shares of common stock of MPRI in the Annual Meeting. | |
(4) | Based on publicly available information, NTT Communications is a wholly-owned subsidiary of NTT. Based on a certification signed by a duly authorized officer of NTT Communications, Mr. Jun Sawada is authorized to execute for and on behalf of NTT Communications, endorsements, transfers and other matters relating to the PLDT shares of common stock held by NTT Communications. | |
(5) | In publicly available reports filed by NTT Communications and NTT DoCoMo, it is stated that because of NTT’s ownership of all the outstanding capital stock of NTT Communications and a majority of the common stock of NTT DoCoMo, NTT, NTT Communications and NTT DoCoMo may be considered to constitute a “group” within the meaning of Section 13(d)(3) of the U.S Securities Exchange Act of 1934, as amended. Therefore, each of them may be deemed to have beneficial ownership of the 39,401,561 shares in aggregate held by NTT Communications and NTT DoCoMo, representing approximately 21% of the outstanding common stock of PLDT as at February 28, 2011. | |
(6) | Based on publicly available information, NTT DoCoMo, is a majority-owned and publicly traded subsidiary of NTT. Based on a certification signed by a duly authorized officer of NTT DoCoMo, Mr. Toshinari Kunieda or Mr. Mutsuo Yamamoto, is authorized to execute for and on behalf of NTT DoCoMo, endorsements, transfers and other matters relating to the PLDT shares of common stock held by NTT DoCoMo. | |
(7) | The total PLDT shareholdings of NTT DoCoMo is 26,768,074 shares, of which 18,234,821 are owned on record by NTT DoCoMo, and 8,533,253 are shares underlying ADSs, collectively representing 14.33% of the outstanding common stock of PLDT as at February 28, 2011. | |
(8) | Based on a resolution adopted by the Board of Directors of the SSC, Mr. Juan B. Santos, as Chairman of the SSC, has been authorized to sign the proxy constituting the lawful attorney/proxy of SSS with full power to represent and vote the PLDT shares of common stock of SSS in the Annual Meeting of PLDT. | |
(9) | The total PLDT shareholdings of SSS is 10,703,748 shares of PLDT of which 5,024,789 are owned on record by SSS and 5,678,959 shares are held on record by PCD, collectively representing 5.73% of the outstanding common stock of PLDT as at February 28, 2011. | |
(10) | PCD is the registered owner of shares held by participants in the Philippine Depository and Trust Co., or PDTC, a private company organized to implement an automated book entry system of handling securities transactions in the Philippines. Under the PDTC procedures, when an issuer of a PDTC-eligible issue will hold a stockholders’ meeting, the PDTC will execute a pro-forma proxy in favor of its participants for the total number of shares in their respective principal securities account as well as for the total number of shares in their client securities account. For the shares held in the principal securities account, the participant concerned is appointed as proxy with full voting rights and powers as registered owner of such shares. For the shares held in the client securities account, the participant concerned is appointed as proxy, with the obligation to constitute a sub-proxy in favor of its clients with full voting and other rights for the number of shares beneficially owned by such clients. Based on available information, none of the owners of the PLDT common shares registered under the name of PCD, owned more than 5% of PLDT’s outstanding common stock as at February 28, 2011, except The Hongkong and Shanghai Banking Corp. Ltd.—Clients, which owned approximately 14.92% of PLDT’s outstanding common stock as of such date. PLDT has no knowledge if any beneficial owner of the shares under The Hongkong and Shanghai Banking Corp. Ltd.—Clients owned more than 5% of PLDT’s outstanding common stock as at February 28, 2011. | |
The PCD account also includes 5,678,959 shares of PLDT common stock beneficially owned by the SSS. | ||
(11) | JP Morgan Asset Holdings (HK) Limited holds shares as nominee of JPMorgan Chase Bank, successor depositary under the Common Stock Deposit Agreement, dated October 14, 1994, as amended on February 10, 2003, between JPMorgan Chase Bank and the holders of ADRs evidencing ADSs, representing shares of common stock of PLDT (the “Deposit Agreement”). Under the Deposit Agreement, if the depositary does not receive voting instructions from a holder of ADRs, such holder will be deemed to have instructed the depositary to provide a discretionary proxy to a person designated by PLDT for the purpose of exercising the voting rights pertaining to the shares of common stock represented by such holder of ADRs, except that no discretionary proxy will be given with respect to any matter as to which substantial opposition exists or which materially and adversely affects the rights of the holders of such ADRs. | |
This account also includes 8,533,253 shares of PLDT common stock underlying ADS beneficially owned by NTT DoCoMo, and 13,525,292 shares of PLDT common stock underlying ADSs beneficially owned by Lazard Asset Management LLC, or LAMLLC. | ||
(12) | According to the Schedule 13G/A of LAMLLC filed with the U.S. Securities and Exchange Commission on February 11, 2011, LAMLLC, as an investment adviser, beneficially owned 13,525,292 shares of PLDT common stock. LAMLLC confirmed that all of the 13,525,292 shares of PLDT common stock are underlying ADSs. |
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Philippine Stock | New York Stock | |||||||||||||||
Exchange | Exchange | |||||||||||||||
High | Low | High | Low | |||||||||||||
2011 | ||||||||||||||||
First Quarter | ||||||||||||||||
January | 2,550.00 | 2,456.00 | 58.80 | 55.55 | ||||||||||||
February | 2,524.00 | 2,150.00 | 56.44 | 49.48 | ||||||||||||
March (until March 29, 2011) | 2.292.00 | 1,990.00 | 53.50 | 46.08 | ||||||||||||
2010 | ||||||||||||||||
First Quarter | 2,775.00 | 2,420.00 | 60.65 | 53.05 | ||||||||||||
Second Quarter | 2,540.00 | 2,320.00 | 57.49 | 50.04 | ||||||||||||
Third Quarter | 2,630.00 | 2,355.00 | 59.92 | 51.47 | ||||||||||||
September | 2,630.00 | 2,398.00 | 59.92 | 54.10 | ||||||||||||
Fourth Quarter | 2,764.00 | 2,360.00 | 64.35 | 53.61 | ||||||||||||
October | 2,764.00 | 2,596.00 | 64.35 | 59.52 | ||||||||||||
November | 2,684.00 | 2,364.00 | 63.45 | 53.61 | ||||||||||||
December | 2,558.00 | 2,360.00 | 58.70 | 54.28 | ||||||||||||
2009 | 2,670.00 | 1,830.00 | 58.17 | 38.43 | ||||||||||||
First Quarter | 2,310.00 | 1,830.00 | 49.80 | 38.43 | ||||||||||||
Second Quarter | 2,620.00 | 2,125.00 | 52.16 | 43.01 | ||||||||||||
Third Quarter | 2,625.00 | 2,300.00 | 54.50 | 48.12 | ||||||||||||
Fourth Quarter | 2,670.00 | 2,405.00 | 58.17 | 51.12 | ||||||||||||
2008 | 3,175.00 | 1,810.00 | 76.72 | 36.05 | ||||||||||||
2007 | 3,285.00 | 2,250.00 | 76.30 | 45.25 | ||||||||||||
2006 | 2,610.00 | 1,675.00 | 51.90 | 32.15 |
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(a) | After the requirements with respect to preferential dividends on the serial Preferred Stock shall have been met and after PLDT shall have complied with all the requirements, if any, with respect to the setting aside of sums as purchase, retirement or sinking funds, the holders of the Common Stock shall be entitled to receive such dividends as may be declared from time to time by the board of directors out of funds legally available therefore. | ||
(b) | After distribution in full of the preferential amounts to be distributed to the holders of serial Preferred Stock in the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding up of PLDT, the holders of Common Stock shall be entitled to receive all the remaining assets of PLDT of whatever kind available for distribution to stockholders ratably in proportion to the number of Common Stock held by them, respectively. | ||
(c) | Except as may be otherwise required by law, or by the Articles of Incorporation of PLDT, each holder of Common Stock shall have one vote in respect of each share of such stock held by him on all matters to be voted upon by the stockholders, and the holders of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. At every election of directors, each holder of Common Stock is entitled to vote such shares of Common Stock held by him and he may vote such number of shares for as many persons as there are directors to be elected, or to cumulate said shares and give one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or to distribute such votes on the same principle among as many candidates as he shall think fit. |
(a) | Appraisal right or the right of a dissenting stockholder to demand payment of the fair value of his shares of stock in the following instances: (i) in case any amendment to the articles of incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence; (ii) in case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets of the corporation; (iii) in case of merger or consolidation; and (iv) in case of investment of funds of the corporation in any other corporation or business or for any purpose other than the primary purpose for which it was organized, except where the investment by the corporation is reasonably necessary to |
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accomplish its primary purpose as stated in its articles of incorporation. | |||
(b) | The right to approve certain corporate acts, such as: (i) election of directors; (ii) removal of directors; (iii) extension or shortening of the corporate term; (iv) increase or decrease of capital stock, and incurring, creating or increasing bonded indebtedness; (v) sale or other disposition of all or substantially all of the corporate assets; (vi) investment of corporate funds in any other corporation or business or for any purpose other than the primary purpose for which it was organized except where the investment is reasonably necessary to accomplish its primary purpose as stated in the corporation’s articles of incorporation; (vii) declaration of stock dividend; (viii) entering into a management contract with another corporation; (ix) plan of merger or consolidation; and (x) voluntary dissolution of the corporation by shortening the corporate term. | ||
(c) | The right to inspect at reasonable hours on business days the records of all business transactions of the corporation and the minutes of any meeting; however, the stockholders’ right to inspect corporate records and books is not an absolute right so that the corporation may deny said right on the basis of impropriety of the purpose or motive of the stockholder. | ||
(d) | The right to be furnished the most recent financial statements of the corporation, within ten (10) days from receipt by the corporation of a written request from a stockholder. The same right exists at the annual meeting of stockholders at which the board of directors must present to the stockholders a financial report of the operations of the corporation for the preceding year which shall include financial statements duly signed and certified by an independent certified public accountant. |
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Series | No. of Shares | |||||||
February 28, 2011 | December 31, 2010 | |||||||
Series A to HH 10% Cumulative Convertible | 405,912,897 | 405,887,387 | ||||||
Series IV Cumulative Non-convertible Redeemable | 36,000,000 | * | 36,000,000 | * |
* | Total subscribed shares is 300 million with a total subscription price of Php3 billion, out of which amount Php360 million has been paid. |
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• | if the deceased at the time of death, or the donor at the time of donation, was a citizen and resident of a foreign country which at the time of his death or donation did not impose a transfer tax of any character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country, or | ||
• | if the laws of the foreign country of which the deceased or the donor was a citizen and resident at the time of his death or donation allow a similar exemption from transfer or death taxes of every character or description in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country. |
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2010 | 2009 | |||||||||||||||
U.S. Dollar | Php(1) | U.S. Dollar | Php(2) | |||||||||||||
(in millions) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Note receivable | 2 | 84 | 2 | 81 | ||||||||||||
Derivative financial assets | 4 | 178 | — | — | ||||||||||||
Advances and refundable deposits | 1 | 38 | — | 7 | ||||||||||||
Total noncurrent financial assets | 7 | 300 | 2 | 88 | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents | 138 | 6,050 | 140 | 6,496 | ||||||||||||
Short-term investments | 15 | 652 | 47 | 2,164 | ||||||||||||
Trade and other receivables — net | 214 | 9,361 | 206 | 9,573 | ||||||||||||
Derivative financial assets | — | 5 | — | 6 | ||||||||||||
Total current financial assets | 367 | 16,068 | 393 | 18,239 | ||||||||||||
Total Financial Assets | 374 | 16,368 | 395 | 18,327 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities — net of current portion | 782 | 34,244 | 837 | 38,871 | ||||||||||||
Derivative financial liabilities | 82 | 3,604 | 59 | 2,751 | ||||||||||||
Total noncurrent financial liabilities | 864 | 37,848 | 896 | 41,622 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable | 169 | 7,415 | 155 | 7,180 | ||||||||||||
Accrued expenses and other current liabilities | 143 | 6,267 | 95 | 4,409 | ||||||||||||
Current portion of interest-bearing financial liabilities | 103 | 4,537 | 155 | 7,220 | ||||||||||||
Total current financial liabilities | 415 | 18,219 | 405 | 18,809 | ||||||||||||
Total Financial Liabilities | 1,279 | 56,067 | 1,301 | 60,431 | ||||||||||||
(1) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was Php43.81 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2010. | |
(2) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was Php46.43 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2009. |
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Cash in Bank | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 11 | — | — | — | — | 11 | 474 | — | 474 | 11 | 474 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0025% to 0.7840% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 31 | — | — | — | — | 31 | 1,362 | — | 1,362 | 31 | 1,362 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0625% to 2.9000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Other Currencies | 3 | — | — | — | — | 3 | 118 | — | 118 | 3 | 118 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0100% to 2.4000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 110 | — | — | — | — | 110 | 4,813 | — | 4,813 | 110 | 4,813 | |||||||||||||||||||||||||||||||||
Interest rate | 0.1000% to 1.7000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 661 | — | — | — | — | 661 | 28,959 | — | 28,959 | 661 | 28,959 | |||||||||||||||||||||||||||||||||
Interest rate | 1.0000% to 4.8100% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 15 | — | — | — | — | 15 | 652 | — | 652 | 15 | 652 | |||||||||||||||||||||||||||||||||
Interest rate | 1.9000% to 10.672% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | — | — | — | — | — | 17 | — | 17 | — | 17 | |||||||||||||||||||||||||||||||||
Interest rate | 3.2500% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | — | — | 8 | 3 | — | 11 | 484 | — | 484 | 11 | 502 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | 6.8750 | % | 7.0000 | % | — | — | — | — | — | — | ��� | |||||||||||||||||||||||||||||||
831 | — | 8 | 3 | — | 842 | 36,879 | — | 36,879 | 842 | 36,897 | ||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | — | 146 | — | — | 234 | 380 | 16,650 | 200 | 16,450 | 440 | 19,274 | |||||||||||||||||||||||||||||||||
Interest rate | — | 11.3750% | — | — | 8.3500% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 9 | 29 | 15 | 295 | — | 348 | 15,264 | 2,586 | 12,678 | 276 | 12,120 | |||||||||||||||||||||||||||||||||
Interest rate | 4.7000% | 2.9900% to 3.7900% | 2.9900% to 3.7900% | 2.2500% to 2.9900% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 68 | 146 | 121 | 339 | 195 | 869 | 38,066 | 74 | 37,992 | 961 | 42,091 | |||||||||||||||||||||||||||||||||
Interest rate | 6.0323% to 8.7792% | 5.6250% to 8.4346% | 6.5000% to 8.4346% | 6.5000% to 9.1038% | 6.5000% to 9.1038% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 6 | 148 | 45 | 15 | — | 214 | 9,357 | 71 | 9,286 | 212 | 9,286 | |||||||||||||||||||||||||||||||||
Interest rate | US$ LIBOR + 0.8150% | US$ Swap rate + 2.7900%; LIBOR + 0.4200% to 1.8500% | US$ Swap rate + 2.7900%; LIBOR + 0.4200% to 1.8500% | US$ Swap rate + 2.7900%; LIBOR + 1.3500% to 1.8500% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 58 | 150 | 74 | 20 | — | 302 | 13,253 | 13 | 13,240 | 302 | 13,240 | |||||||||||||||||||||||||||||||||
Interest rate | PDST-F + 0.3000% to 1.2500% | PDST-F + 0.3000% to 1.3750%; AUB’s prime rate | PDST-F + 0.3000% | PDST-F + 0.3000% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
141 | 619 | 255 | 669 | 429 | 2,113 | 92,590 | 2,944 | 89,646 | 2,191 | 96,011 | ||||||||||||||||||||||||||||||||||
Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Cash in Bank | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 11 | — | — | — | — | 11 | 540 | — | 540 | 11 | 540 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0025% to 0.88% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 36 | — | — | — | — | 36 | 1,673 | — | 1,673 | 36 | 1,673 | |||||||||||||||||||||||||||||||||
Interest rate | 0.625% to 2.90% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Other Currencies | 1 | — | — | — | — | 1 | 31 | — | 31 | 1 | 31 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0014 to 2.40% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 384 | — | — | — | — | 384 | 17,870 | — | 17,870 | 384 | 17,870 | |||||||||||||||||||||||||||||||||
Interest rate | 0.50% to 1.75% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 369 | — | — | — | — | 369 | 17,149 | — | 17,149 | 369 | 17,149 | |||||||||||||||||||||||||||||||||
Interest rate | 1.25% to 5.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 46 | — | — | — | — | 46 | 2,132 | — | 2,132 | 46 | 2,132 | |||||||||||||||||||||||||||||||||
Interest rate | 4.25% to 7.006% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 36 | — | — | — | — | 36 | 1,692 | — | 1,692 | 36 | 1,692 | |||||||||||||||||||||||||||||||||
Interest rate | 4.40% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | — | — | — | 10 | — | 10 | 462 | — | 462 | 10 | 474 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | — | 6.92% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
883 | — | — | 10 | — | 893 | 41,549 | — | 41,549 | 893 | 41,561 | ||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | — | — | 146 | — | 245 | 391 | 18,161 | 285 | 17,876 | 449 | 20,837 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | 11.375% | — | 8.350% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 14 | 27 | 5 | 285 | — | 331 | 15,397 | 3,338 | 12,059 | 229 | 10,654 | |||||||||||||||||||||||||||||||||
Interest rate | 4.515% | 3.79% to 4.70% | 3.79% | 2.25% to 3.79% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 63 | 126 | 236 | 305 | 730 | 33,858 | 84 | 33,774 | 744 | 34,535 | |||||||||||||||||||||||||||||||||
Interest rate | — | 6.0323% to 8.4346% | 5.625% to 8.4346% | 6.125% to 9.1038% | 6.50% to 9.1038% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 41 | 160 | 74 | 60 | — | 335 | 15,543 | 124 | 15,419 | 332 | 15,419 | |||||||||||||||||||||||||||||||||
Interest rate | US$ LIBOR + 0.05% to 2.5% | US$ LIBOR + 0.42% to 1.85%; swap rate + 2.79% | US$ LIBOR + 0.42% to 1.85%; swap rate + 2.79% | US$ LIBOR + 0.42% to 1.85%; swap rate + 2.79% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 185 | 81 | 107 | — | 373 | 17,349 | 27 | 17,322 | 373 | 17,322 |
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate | — | PDST-F + 0.75% to 1.5%; AUB’s prime rate | PDST-F + 1.0% to 1.50%; AUB’s prime rate | PDST-F + 1.0% to 1.50% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 6 | — | — | — | — | 6 | 279 | — | 279 | 6 | 279 | |||||||||||||||||||||||||||||||||
Interest rate | 3.25% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 43 | — | — | — | — | 43 | 2,000 | — | 2,000 | 43 | 2,000 | |||||||||||||||||||||||||||||||||
Interest rate | PDST-F + 1.5%; 6.0896% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
104 | 435 | 432 | 688 | 550 | 2,209 | 102,587 | 3,858 | 98,729 | 2,176 | 101,046 | ||||||||||||||||||||||||||||||||||
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Gross Maximum Exposure(1) | Net Maximum Exposure(2) | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(in million pesos) | ||||||||||||||||
Loans and receivables: | ||||||||||||||||
Advances and refundable deposits | 1,000 | 849 | 999 | 848 | ||||||||||||
Cash and cash equivalents | 36,678 | 38,319 | 36,458 | 38,101 | ||||||||||||
Short-term investments | 152 | 3,338 | 152 | 3,338 | ||||||||||||
Foreign administrations | 4,321 | 4,064 | 4,277 | 4,011 | ||||||||||||
Retail subscribers | 3,872 | 3,546 | 3,799 | 3,505 | ||||||||||||
Corporate subscribers | 2,042 | 2,429 | 1,918 | 2,328 | ||||||||||||
Domestic carriers | 1,453 | 1,184 | 1,453 | 1,184 | ||||||||||||
Dealers, agents and others | 4,740 | 3,506 | 4,740 | 3,506 | ||||||||||||
Held-to-maturity investments: | ||||||||||||||||
Investment in debt securities | 484 | 462 | 484 | 462 | ||||||||||||
Available-for-sale financial assets | 147 | 134 | 147 | 134 | ||||||||||||
Fair value through profit or loss: | ||||||||||||||||
Short-term investments | 517 | 486 | 517 | 486 | ||||||||||||
Long-term currency swap | 178 | — | 178 | — | ||||||||||||
Bifurcated embedded derivatives | 5 | 6 | 5 | 6 | ||||||||||||
Total | 55,589 | 58,323 | 55,127 | 57,909 | ||||||||||||
(1) | Gross financial assets before taking into account any collateral held or other credit enhancements or offsetting arrangements. | |
(2) | Gross financial assets after taking into account any collateral held or other credit enhancements or offsetting arrangements or deposit insurance. |
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Neither past due | ||||||||||||||||||||
nor impaired | Past due but | |||||||||||||||||||
Total | Class A(1) | Class B(2) | not impaired | Impaired | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 1,000 | 951 | 49 | — | — | |||||||||||||||
Cash and cash equivalents | 36,678 | 35,368 | 1,310 | — | — | |||||||||||||||
Short-term investments | 152 | 152 | — | — | — | |||||||||||||||
Retail subscribers | 8,917 | 946 | 926 | 2,000 | 5,045 | |||||||||||||||
Corporate subscribers | 7,998 | 393 | 612 | 1,037 | 5,956 | |||||||||||||||
Foreign administrations | 4,479 | 1,756 | 699 | 1,866 | 158 | |||||||||||||||
Domestic carriers | 1,591 | 191 | 23 | 1,239 | 138 | |||||||||||||||
Dealers, agents and others | 5,273 | 2,599 | 2,013 | 128 | 533 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 484 | 484 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 147 | 108 | 39 | — | — | |||||||||||||||
Fair value through profit or loss(3): | ||||||||||||||||||||
Short-term investments | 517 | 517 | — | — | — | |||||||||||||||
Long-term currency swap | 178 | 178 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 5 | 5 | — | — | — | |||||||||||||||
Total | 67,419 | 43,648 | 5,671 | 6,270 | 11,830 | |||||||||||||||
December 31, 2009 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 849 | 790 | 59 | — | — | |||||||||||||||
Cash and cash equivalents | 38,319 | 37,767 | 552 | — | — | |||||||||||||||
Short-term investments | 3,338 | 2,971 | 367 | — | — | |||||||||||||||
Corporate subscribers | 9,106 | 1,078 | 283 | 1,068 | 6,677 | |||||||||||||||
Retail subscribers | 8,026 | 1,236 | 518 | 1,792 | 4,480 | |||||||||||||||
Foreign administrations | 4,353 | 1,261 | 451 | 2,352 | 289 | |||||||||||||||
Domestic carriers | 1,267 | 157 | 8 | 1,019 | 83 | |||||||||||||||
Dealers, agents and others | 3,927 | 2,068 | 1,022 | 416 | 421 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 462 | 462 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 134 | 103 | 31 | — | — | |||||||||||||||
Fair value through profit or loss(3): | ||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | |||||||||||||||
Total | 70,273 | 48,385 | 3,291 | 6,647 | 11,950 | |||||||||||||||
(1) | This includes low risk and good paying customer accounts with no history of account treatment for a defined period and no overdue accounts as at report date; and deposits or placements to counterparties with good credit rating or bank standing financial review. | |
(2) | This includes medium risk and average paying customer accounts with no overdue accounts as at report date, and new customer accounts for which sufficient credit history has not been established; and deposits or placements to counterparties not classified as Class A. | |
(3) | Gross receivables from counterparties, before any offsetting arrangements. |
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Past due but not impaired | ||||||||||||||||||||||||
Neither past due | ||||||||||||||||||||||||
Total | nor impaired | 1-60 days | 61-90 days | Over 91 days | Impaired | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 1,000 | 1,000 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 36,678 | 36,678 | — | — | — | — | ||||||||||||||||||
Short-term investments | 152 | 152 | — | — | — | — | ||||||||||||||||||
Retail subscribers | 8,917 | 1,872 | 1,387 | 150 | 463 | 5,045 | ||||||||||||||||||
Corporate subscribers | 7,998 | 1,005 | 642 | 159 | 236 | 5,956 | ||||||||||||||||||
Foreign administrations | 4,479 | 2,455 | 616 | 393 | 857 | 158 | ||||||||||||||||||
Domestic carriers | 1,591 | 214 | 165 | 182 | 892 | 138 | ||||||||||||||||||
Dealers, agents and others | 5,273 | 4,612 | 21 | 20 | 87 | 533 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 484 | 484 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 147 | 147 | — | — | — | — | ||||||||||||||||||
Fair value through profit or loss: | ||||||||||||||||||||||||
Short-term investments | 517 | 517 | — | — | — | — | ||||||||||||||||||
Long-term currency swap | 178 | 178 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 5 | 5 | — | — | — | — | ||||||||||||||||||
Total | 67,419 | 49,319 | 2,831 | 904 | 2,535 | 11,830 | ||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 849 | 849 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 38,319 | 38,319 | — | — | — | — | ||||||||||||||||||
Short-term investments | 3,338 | 3,338 | — | — | — | — | ||||||||||||||||||
Corporate subscribers | 9,106 | 1,361 | 433 | 198 | 437 | 6,677 | ||||||||||||||||||
Retail subscribers | 8,026 | 1,754 | 1,362 | 184 | 246 | 4,480 | ||||||||||||||||||
Foreign administrations | 4,353 | 1,712 | 1,320 | 405 | 627 | 289 | ||||||||||||||||||
Domestic carriers | 1,267 | 165 | 283 | 293 | 443 | 83 | ||||||||||||||||||
Dealers, agents and others | 3,927 | 3,090 | 332 | 21 | 63 | 421 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 462 | 462 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 134 | 134 | — | — | — | — | ||||||||||||||||||
Fair value through profit or loss: | ||||||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | — | ||||||||||||||||||
Total | 70,273 | 51,676 | 3,730 | 1,101 | 1,816 | 11,950 | ||||||||||||||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Long-term debt, including current portion (Note 20) | 89,646 | 96,450 | ||||||
Notes payable (Note 20) | — | 2,279 | ||||||
Total consolidated debt | 89,646 | 98,729 | ||||||
Cash and cash equivalents (Note 15) | (36,678 | ) | (38,319 | ) | ||||
Short-term investments | (669 | ) | (3,824 | ) | ||||
Net consolidated debt | 52,299 | 56,586 | ||||||
Equity attributable to equity holders of PLDT | 97,069 | 98,575 | ||||||
Net consolidated debt to equity ratio | 54 | % | 57 | % | ||||
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• | US$0.02 or less per ADS (or portion thereof) for any cash distribution made; | ||
• | US$1.50 per ADR for transfer made (to the extent such fee is not prohibited by the rules of the primary stock exchange upon which the ADSs are listed); | ||
• | a fee in an amount equal to the fee for the execution and delivery of ADSs for the distribution or sale of securities, which would have been charged as a result of the deposit of such securities but which securities or the net proceeds from the sale thereof are instead distributed by the depositary to the holders entitled thereto; | ||
• | US$0.02 per ADS (or a portion thereof) per year for the services rendered by the depositary for administering the ADR program (which fee shall be assessed as of the record date or dates set by the depositary not more than once each calendar year and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distribution); | ||
• | such fees and expenses as are incurred by the depositary (including without limitation expenses incurred on behalf of holders in compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in the delivery of the common stock or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or regulations; | ||
• | stock transfer and other taxes and governmental charges (which are payable by the holder or person depositing the common stock), cable, telex and facsimile transmission and delivery charges incurred at the request of the person depositing the common stock or holder delivering the common stock, ADRs or deposited common stock (which are payable by such person or holder), transfer or registration fees for the registration or transfer of deposited common stock in connection with the deposit or withdrawal of the deposited common stock (which are payable by the person depositing or withdrawing deposited common stock), expense by the depositary in the conversion of foreign currency into U.S. dollars; and | ||
• | any other charge payable by the depositary or its agents in connection with its service as depositary in implementation of the Company’s ADR Program pursuant to Section 4.02, 4.03, 4.04, or 4.05 of the Deposit Agreement, as amended. |
Category of Expenses | Amount Reimbursed for | |||
Investor relations and investor event fees | US$ | 643,783 | ||
Legal and accounting fees incurred in connection with the preparation of Form 20-F, ongoing SEC compliance and listing requirements | 258,103 | |||
Listing fees | 57,014 | |||
Total | US$ | 958,900 | ||
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• | Compliance with applicable laws, rules and regulations; | ||
• | Ethical handling of conflicts of interest, corporate opportunities and confidential information; | ||
• | Protection and proper use of company assets; | ||
• | Fair dealing with employees, customers, service providers, suppliers, and competitors; | ||
• | Compliance with reporting and disclosure obligations to the relevant regulators and to investors; | ||
• | Compliance with disclosure and financial reporting controls and procedures; | ||
• | Assessment and management of risks involved in business endeavors; and | ||
• | Adoption of international best practices of good corporate governance in the conduct of the Company’s business. |
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(a) | CG Manual —The PLDT CG Manual was approved and adopted by the Board of Directors on March 26, 2010 pursuant to SEC Memorandum Circular No. 6 Series of 2009 or the Revised Code of Corporate Governance. It supersedes the CG Manual approved and adopted on September 24, 2002, as amended on March 30, 2004 and January 30, 3007. The structures and processes set forth in the CG Manual, as well as the Articles of Incorporation and By-Laws, combined with the Company’s commitment to the principles of transparency, accountability, fairness and integrity, form PLDT’s basic framework of governance by which our Board of Directors, officers, executives and employees strive to achieve the Company’s strategic objectives, create value for all its stakeholders, and sustain its long-term viability. |
• | the composition of our Board of Directors as well as the qualifications and grounds for disqualification for directorship; | ||
• | the requirement that at least 20% of the membership of the Board of Directors, and in no case less than two members, must be independent directors and the standards/criteria for the determination of independent directors; | ||
• | the duties and responsibilities of our board of directors and the individual directors; | ||
• | the manner of conduct of Board meetings including the requirement to have an independent director present in every meeting to promote transparency and the need to have an executive session for non-executive and independent directors; | ||
• | establishment of board committees, specifically, the audit committee, ECC and GNC including the composition and the principal duties and responsibilities of such committees, as well as the requirement for each board committee to have its own charter; | ||
• | the role of the Chairman as the leader of the Board and as the prime mover in ensuring compliance with, and the performance of, corporate governance policies and practices ; | ||
• | the role of the President/Chief Executive Officer in ensuring that the Company’s business affairs are managed in a sound and prudent manner and that operational, financial and internal controls are adequate and effective to ensure reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets and compliance with laws, rules, regulations and contracts; | ||
• | the duties and responsibilities of the Corporate Secretary/Assistant Corporate Secretary in terms of the support services that they need to provide the Board in upholding sound corporate governance; | ||
• | the duties and responsibilities of the head of internal audit organization that would provide the Board of Directors, management and shareholders with reasonable assurance that the Company’s key organizational and procedural controls are appropriate, adequate, effective and reasonably complied with; | ||
• | the functions of the independent auditors that would reasonably ensure an environment of sound corporate governance as reflected in the Company’s financial records and reports; the requirement that non-audit work of the independent auditors should not conflict with their function as independent auditors; the requirement to rotate, at least once every five years, the independent auditors or the lead partner assigned to handle the independent audit of financial statements; | ||
• | the requirement to appoint a Chief Governance Officer and the duties and responsibilities of such Chief Governance Officer including the establishment of an evaluation system to determine and measure compliance with the provisions of our CG Manual; |
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• | the duty of the Board of Directors to promote and uphold stockholders’ rights such as the right to vote, pre-emptive right, the right to inspect corporate books and records, right to timely receive relevant information, right to dividends, and the appraisal right; | ||
• | the requirement for the Board to explore and implement steps to reduce excessive or unnecessary costs that impede stockholders’ participation and to act with transparency and fairness at the annual and special stockholders’ meetings; | ||
• | the Company’s undertaking to disclose material information promptly and accurately as well as the imposition of reasonable rules regarding the treatment and handling of material non-public information; and | ||
• | the establishment of an appropriate evaluation system for purposes of monitoring and assessing compliance with the CG Manual and other applicable laws and administrative issuances. |
(b) | Conflict of Interest Policy approved on October 24, 2005.This Policy aims to ensure that work-related actions of our directors, officers, employees and consultants are based on sound business principles and judgment devoid of bias or partiality. It enjoins all employees to be aware of the possibility of such bias and partiality in dealings with various entities or individuals in the course of or in relation to their work. The policy likewise mandates that employees who find themselves in a possible conflict of interest situation should promptly disclose the matter to the relevant authorities. If warranted, the employee concerned should also obtain appropriate approvals and inhibit himself from any action, transaction or decision involving an existing or potential conflict of interest. | ||
(c) | Policy on Gifts, Entertainment and Sponsored Travel approved on January 31, 2006.This Policy provides safeguards so that the custom of giving gifts is handled in accordance with the principles of integrity, accountability, fairness and transparency. It aims to prevent the occurrence of situations or actions that could significantly affect objective, independent or effective performance of an employee’s duties. Specifically, it prohibits the solicitation of gifts, sponsored travel, and entertainment from third parties. Receipt and acceptance of gifts voluntarily given by such third parties are handled according to this policy as well. | ||
(d) | Supplier/Contractor Relations Policy approved on January 31, 2006. This Policy seeks to ensure that the Company upholds the highest professional standards in business practices and ethics in its dealings with suppliers and contractors in the procurement of goods and services. The policy also seeks to maintain PLDT’s reputation for equal opportunity and honest treatment of suppliers in all business transactions. The policy establishes clear rules for arm’s length transactions and fair treatment of prospective and existing suppliers with the objective of always obtaining the best value for the company. | ||
(e) | Policy on Employee Disclosure on Violations of the Corporate Governance Rules, Questionable Accounting or Auditing Matters, and Offenses covered by PLDT’s Table of Penalties (or the Expanded Whistleblowing Policy) approved on May 9, 2006.This Policy provides guidelines on handling employee disclosure or complaints of violation of rules pertaining to the aforestated matters, protects whistleblowers from retaliation and ensures confidentiality and fairness in the handling of a disclosure or complaint. |
http://www.pldt.com.ph/governance/about/Documents/27623c20007849698da4df57179ec70dPLDT_Code_of_Business_Conduct _and_Ethics.pdf | |||
http://www.pldt.com.ph/governance/about/Documents/22336f71c88c495793d15575c2addffcpldtcorpgov_manual.pdf | |||
http://www.pldt.com.ph/governance/about/Documents/f7933d17962d4b2c942e50ba4980f21bpldtdisclosure.pdf |
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(1) | Mr. Reyes’ status as an independent director ceased as at August 3, 2010 when he was appointed Chief Operating Officer of Meralco, an affiliate and investee company of the PLDT Group. |
1. | Risks are appropriately identified and managed; | ||
2. | Significant financial, managerial, and operating information are accurate, reliable and timely; | ||
3. | Employees’ actions are in compliance with policies, standards, procedures, and applicable laws and regulations; | ||
4. | Resources are acquired economically, used efficiently and adequately protected; | ||
5. | Programs, plans and objectives are achieved; | ||
6. | Quality and continuous improvement are fostered in our control process; | ||
7. | Significant legislative or regulatory issues impacting us are recognized and addressed appropriately; and | ||
8. | Interaction with various governance groups occurs as needed. |
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1. | Provide annually an assessment on the adequacy and effectiveness of our processes for controlling our activities and managing our risks; | ||
2. | Report significant issues related to the processes of controlling our activities, including potential improvements to those processes, and provide information concerning such issues; | ||
3. | Periodically provide information on the status and results of the annual audit plan and the sufficiency of our internal audit organization’s resources; and | ||
4. | Coordinate with and provide oversight of other control and monitoring functions (risk management, compliance, security, legal, ethics, environmental, external audit). |
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2010 | 2009 | |||||||
(in millions) | ||||||||
Audit Fees | Php39 | Php46 | ||||||
All Other Fees | 15 | 19 | ||||||
Total | Php54 | Php65 | ||||||
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Total Number ofShares | ||||||||||||||||
Average Price | Purchased as Part of | Maximum Number of Shares | ||||||||||||||
Total Number of | Paid per | Publicly Announced | that May Yet Be Purchased | |||||||||||||
Period | Shares Purchased(1) | Share | Plans or Programs | Under the Programs | ||||||||||||
March 17-19, 2008 | 60,000 | 2,635 | 60,000 | 1,940,000 | (2) | |||||||||||
March 24-27, 2008 | 92,440 | 2,708 | 152,440 | 1,847,560 | ||||||||||||
April 4, 2008 | 30,000 | 2,782 | 182,440 | 1,817,560 | ||||||||||||
April 8-11, 2008 | 62,000 | 2,777 | 244,440 | 1,755,560 | ||||||||||||
April 14-18, 2008 | 101,820 | 2,727 | 346,260 | 1,653,740 | ||||||||||||
May 9, 2008 | 25,000 | 2,588 | 371,260 | 1,628,740 | ||||||||||||
May 12-16, 2008 | 144,810 | 2,658 | 516,070 | 1,483,930 | ||||||||||||
May 19-23, 2008 | 115,920 | 2,660 | 631,990 | 1,368,010 | ||||||||||||
May 26-30, 2008 | 83,050 | 2,618 | 715,040 | 1,284,960 | ||||||||||||
June 2-6, 2008 | 137,710 | 2,556 | 852,750 | 1,147,250 | ||||||||||||
June 10-13, 2008 | 138,280 | 2,361 | 991,030 | 1,008,970 | ||||||||||||
June 16-20, 2008 | 168,030 | 2,449 | 1,159,060 | 840,940 | ||||||||||||
June 23-27, 2008 | 182,630 | 2,416 | 1,341,690 | 658,310 | ||||||||||||
June 30, 2008 | 41,720 | 2,394 | 1,383,410 | 616,590 | ||||||||||||
July 1-4, 2008 | 150,440 | 2,344 | 1,533,850 | 466,150 | ||||||||||||
July 7-10, 2008 | 121,890 | 2,430 | 1,655,740 | 344,260 | ||||||||||||
July 14-16, 2008 | 83,890 | 2,413 | 1,739,630 | 260,370 | ||||||||||||
September 15-16, 2008 | 16,410 | 2,571 | 1,756,040 | 2,243,960 | (2) | |||||||||||
September 18, 2008 | 4,000 | 2,465 | 1,760,040 | 2,239,960 | ||||||||||||
September 23, 2008 | 3,100 | 2,595 | 1,763,140 | 2,236,860 | ||||||||||||
September 30, 2008 | 10,440 | 2,646 | 1,773,580 | 2,226,420 | ||||||||||||
October 3, 2008 | 20,000 | 2,695 | 1,793,580 | 2,206,420 | ||||||||||||
October 6-10, 2008 | 76,150 | 2,502 | 1,869,730 | 2,130,270 | ||||||||||||
October 13-17, 2008 | 90,160 | 2,328 | 1,959,890 | 2,040,110 | ||||||||||||
November 7, 2008 | 12,400 | 1,983 | 1,972,290 | 3,027,710 | (2) | |||||||||||
March 17-18, 2009 | 39,060 | 1,876 | 2,011,350 | 2,988,650 | ||||||||||||
March 20, 2009 | 130,000 | 1,980 | 2,141,350 | 2,858,650 | ||||||||||||
March 23, 2009 | 523,226 | 2,020 | 2,664,576 | 2,335,424 | ||||||||||||
September 18, 2009 | 13,210 | 2,306 | 2,677,786 | 2,322,214 | ||||||||||||
September 22, 2009 | 5,170 | 2,330 | 2,682,956 | 2,317,044 | ||||||||||||
November 9, 2010 | 20,000 | 2,416 | 2,702,956 | 2,297,044 | ||||||||||||
November 10, 2010 | 21,155 | 2,421 | 2,724,111 | 2,275,889 | ||||||||||||
Total | 2,724,111 | |||||||||||||||
(1) | Outside the share buyback program, we did not repurchase any of our shares in the year ended December 31, 2010. | |
(2) | The Board of Directors approved the initial share buyback program of up to two million shares of PLDT’s common stock on January 29, 2008, authorized the repurchase of up to another two million shares on August 5, 2008, and approved the repurchase of an additional one million shares on December 9, 2008. |
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• | Number of Independent Directors.The NYSE listing standards require a majority of the board of directors to be independent. We have four independent directors out of 13 directors, which exceeds the requirements under the Philippine SEC Governance Code that at least two members or 20% of the board of directors must be independent. | ||
• | Director Independence Tests.There are differences between the director independence tests applied in PLDT’s corporate governance practice and those under the NYSE listing standards. In some cases, the independence tests set forth in the NYSE listing standards are more stringent than those under PLDT’s corporate governance practice and vice versa. |
o | Examples where the NYSE listing standards impose more stringent standards than PLDT’s corporate governance practices include the “auditor affiliation” test. In contrast to the NYSE listing standards, under PLDT’s By-Laws and Board Committee charters, present or previous affiliation or employment of a director’s immediate family member with the external auditors, or a director’s past or present affiliation with a firm that is PLDT’s internal auditor do not preclude a determination that such director is independent. | ||
o | Examples where PLDT’s corporate governance practices impose more stringent standards than NYSE listing standards include the look back periods for the independence tests and the “material relationship with the listed company” test. The look back period for each of the “past employment” and the “auditor affiliation” tests under PLDT’s corporate governance practices is five years compared to three years under the NYSE listing standards. Furthermore, in respect of material relationships that preclude an independence finding, PLDT’s Corporate Governance Manual provides that a director who is, or whose relative is, a substantial shareholder of PLDT, any of its related companies or any of its substantial shareholders cannot be considered as independent. |
• | Meetings of non-management/independent directors.The NYSE listing standards require regularly scheduled executive sessions consisting of non-management directors without management present or regularly scheduled executive sessions consisting of only independent directors. As part of the Board assessment process formally adopted by the GNC, PLDT’s independent directors and/or non-management directors hold meetings at least once a year to, among other things, discuss and evaluate the results of the Board’s annual self-assessment. In addition, while PLDT’s Corporate Governance Manual does not mandate the holding of regularly scheduled executive sessions with non-management directors nor executive sessions with only independent directors, PLDT’s independent and/or non-management directors, through the Audit Committee and the GNC, in either or both of which all independent directors and most non-management directors are serving as members or advisors, are provided the opportunity to have open discussions, whether individually or as a group, without the presence of management/executive directors. | ||
• | Nominating/Corporate Governance Committee and Compensation Committee.The NYSE listing standards require a listed company to maintain a nominating/corporate governance committee and a compensation committee, both composed entirely of independent directors. Our GNC and our ECC is each composed of five voting members, a majority of whom are independent directors, which exceeds the requirements under the Philippine SEC Governance Code that one of the at least three voting members of the nominating/corporate governance committee and one of the at least three members of the compensation committee must be independent. | ||
• | Audit Committee.As required by NYSE listing standards, PLDT maintains an audit committee in full compliance with Rule 10A-3 promulgated under the U.S. Securities Exchange Act of 1934, as amended, and Section 303A.06 of the NYSE Listed Company Manual. All of the members of PLDT’s Audit Committee are independent directors meeting the independence requirements of Rule 10A-3 as well as those under Section 303A.07 of the NYSE Listed Company Manual, except in those areas where our independence tests under the Philippine SEC Governance Code differ from those under the NYSE listing standards, as discussed above. |
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Makati City, Philippines
March 29, 2011
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Philippine Long Distance Telephone Company
Makati City, Philippines
March 29, 2011
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2010 | 2009 | |||||||
ASSETS | ||||||||
Noncurrent Assets | ||||||||
Property, plant and equipment (Notes 3, 5, 9, 13, 20 and 28) | 163,184 | 161,256 | ||||||
Investments in associates and joint ventures (Notes 3, 4, 5, 10, 24 and 28) | 23,203 | 22,233 | ||||||
Available-for-sale financial assets (Notes 6, 13 and 28) | 147 | 134 | ||||||
Investment in debt securities (Notes 11 and 28) | 484 | 462 | ||||||
Investment properties (Notes 3, 6, 9, 12 and 28) | 1,560 | 1,210 | ||||||
Goodwill and intangible assets (Notes 3, 4, 5, 13, 14, 21 and 28) | 11,485 | 13,024 | ||||||
Deferred income tax assets — net (Notes 3, 4, 7, 13 and 28) | 6,110 | 7,721 | ||||||
Derivative financial assets (Note 28) | 178 | — | ||||||
Prepayments — net of current portion (Notes 3, 5, 13,18, 25 and 28) | 8,679 | 8,663 | ||||||
Advances and refundable deposits — net of current portion (Notes 13 and 28) | 1,187 | 1,102 | ||||||
Total Noncurrent Assets | 216,217 | 215,805 | ||||||
Current Assets | ||||||||
Cash and cash equivalents (Notes 13, 15 and 28) | 36,678 | 38,319 | ||||||
Short-term investments (Note 28) | 669 | 3,824 | ||||||
Trade and other receivables (Notes 3, 5, 13, 16, 18, 24 and 28) | 16,428 | 14,729 | ||||||
Inventories and supplies (Notes 3, 4, 5, 13, 17 and 28) | 2,219 | 2,165 | ||||||
Derivative financial assets (Note 28) | 5 | 6 | ||||||
Current portion of prepayments (Notes 13, 18 and 28) | 5,418 | 5,098 | ||||||
Current portion of advances and refundable deposits (Notes 13 and 28) | 181 | 202 | ||||||
Total Current Assets | 61,598 | 64,343 | ||||||
TOTAL ASSETS | 277,815 | 280,148 | ||||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Preferred stock, Php10 par value per share, authorized - 822,500,000 shares; issued and outstanding - 441,887,387 shares as at December 31, 2010 and 441,631,062 shares as at December 31, 2009 (Notes 8, 19 and 28) | 4,419 | 4,416 | ||||||
Common stock, Php5 par value per share, authorized - 234,000,000 shares; issued - 189,480,549 shares and outstanding - 186,756,438 shares as at December 31, 2010; and issued - 189,480,260 shares and outstanding - 186,797,304 shares as at December 31, 2009 (Notes 8, 19 and 28) | 947 | 947 | ||||||
Treasury stock - 2,724,111 shares as at December 31, 2010 and 2,682,956 shares as at December 31, 2009 (Notes 8, 19 and 28) | (6,505 | ) | (6,405 | ) | ||||
Capital in excess of par value (Note 13) | 62,890 | 62,890 | ||||||
Retained earnings (Note 19) | 36,594 | 37,744 | ||||||
Other comprehensive income (Note 6) | (1,276 | ) | (1,017 | ) | ||||
Total Equity Attributable to Equity Holders of PLDT | 97,069 | 98,575 | ||||||
Non-controlling interests (Notes 6 and 13) | 316 | 550 | ||||||
TOTAL EQUITY | 97,385 | 99,125 | ||||||
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December 31, 2010 and 2009
(in million pesos, except par value and number of shares)
2010 | 2009 | |||||||
Noncurrent Liabilities | ||||||||
Interest-bearing financial liabilities — net of current portion (Notes 3, 4, 5, 9, 13, 20, 23, 26 and 28) | 75,888 | 86,079 | ||||||
Deferred income tax liabilities — net (Notes 3, 4, 7, 13 and 28) | 1,099 | 1,321 | ||||||
Derivative financial liabilities (Notes 26 and 28) | 3,604 | 2,751 | ||||||
Pension and other employee benefits (Notes 3, 5, 13, 23, 25, 26 and 28) | 1,834 | 374 | ||||||
Customers’ deposits (Notes 26 and 28) | 2,223 | 2,166 | ||||||
Deferred credits and other noncurrent liabilities (Notes 3, 5, 9, 13, 14, 21, 23, 28 and 29) | 13,567 | 14,438 | ||||||
Total Noncurrent Liabilities | 98,215 | 107,129 | ||||||
Current Liabilities | ||||||||
Accounts payable (Notes 13, 22, 24, 26, 27 and 28) | 25,804 | 19,601 | ||||||
Accrued expenses and other current liabilities (Notes 3, 10, 13, 14, 20, 21, 23, 24, 25, 26, 27 and 28) | 35,959 | 35,446 | ||||||
Provision for assessments (Notes 3, 26, 27 and 28) | 1,555 | 1,555 | ||||||
Current portion of interest-bearing financial liabilities (Notes 3, 4, 5, 9, 13, 20, 23, 26 and 28) | 13,801 | 12,714 | ||||||
Dividends payable (Notes 13, 19, 26 and 28) | 2,086 | 1,749 | ||||||
Income tax payable (Notes 7, 13 and 28) | 3,010 | 2,829 | ||||||
Total Current Liabilities | 82,215 | 73,894 | ||||||
TOTAL LIABILITIES | 180,430 | 181,023 | ||||||
TOTAL EQUITY AND LIABILITIES | 277,815 | 280,148 | ||||||
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2010 | 2009 | 2008 | ||||||||||
REVENUES | ||||||||||||
Service revenues (Notes 3 and 4) | 142,242 | 145,567 | 142,873 | |||||||||
Non-service revenues (Notes 3, 4 and 5) | 2,217 | 2,426 | 2,964 | |||||||||
144,459 | 147,993 | 145,837 | ||||||||||
EXPENSES | ||||||||||||
Depreciation and amortization (Notes 3, 4 and 9) | 26,277 | 25,607 | 24,709 | |||||||||
Compensation and employee benefits (Notes 3, 5 and 25) | 24,070 | 23,100 | 20,709 | |||||||||
Repairs and maintenance (Notes 12, 17 and 24) | 9,434 | 8,631 | 8,569 | |||||||||
Selling and promotions (Note 8) | 5,284 | 5,749 | 5,695 | |||||||||
Professional and other contracted services (Note 24) | 4,853 | 4,361 | 4,591 | |||||||||
Cost of sales (Notes 5, 17 and 24) | 4,771 | 5,432 | 5,252 | |||||||||
Rent (Notes 3 and 26) | 3,970 | 4,055 | 3,656 | |||||||||
Taxes and licenses (Note 27) | 2,571 | 2,881 | 2,736 | |||||||||
Asset impairment (Notes 3, 4, 5, 9, 10, 14, 16, 17, 18 and 28) | 2,438 | 5,061 | 4,180 | |||||||||
Communication, training and travel | 1,832 | 1,902 | 1,993 | |||||||||
Insurance and security services (Note 24) | 1,252 | 1,264 | 1,196 | |||||||||
Amortization of intangible assets (Notes 3, 4 and 14) | 388 | 368 | 377 | |||||||||
Other expenses (Note 24) | 1,763 | 1,700 | 2,123 | |||||||||
88,903 | 90,111 | 85,786 | ||||||||||
55,556 | 57,882 | 60,051 | ||||||||||
OTHER INCOME (EXPENSES) | ||||||||||||
Foreign exchange gains (losses) — net (Notes 4, 9 and 28) | 1,807 | 909 | (6,170 | ) | ||||||||
Equity share in net earnings (losses) of associates and joint ventures (Notes 4 and 10) | 1,408 | 2 | (176 | ) | ||||||||
Interest income (Notes 4, 5, 11 and 15) | 1,200 | 1,539 | 1,668 | |||||||||
Gains (losses) on derivative financial instruments — net (Notes 4 and 28) | (1,741 | ) | (1,006 | ) | 3,115 | |||||||
Financing costs — net (Notes 4, 5, 9, 20 and 28) | (6,698 | ) | (6,556 | ) | (6,104 | ) | ||||||
Other income (Notes 4 and 18) | 2,153 | 2,069 | 1,665 | |||||||||
(1,871 | ) | (3,043 | ) | (6,002 | ) | |||||||
INCOME BEFORE INCOME TAX(Note 4) | 53,685 | 54,839 | 54,049 | |||||||||
PROVISION FOR INCOME TAX(Notes 3, 4 and 7) | 13,426 | 14,744 | 19,073 | |||||||||
NET INCOME FOR THE YEAR(Note 4) | 40,259 | 40,095 | 34,976 | |||||||||
ATTRIBUTABLE TO: | ||||||||||||
Equity holders of PLDT (Notes 4 and 8) | 40,217 | 39,781 | 34,317 | |||||||||
Non-controlling interests (Note 4) | 42 | 314 | 659 | |||||||||
40,259 | 40,095 | 34,976 | ||||||||||
Earnings Per Share For The Year Attributable to Common Equity Holders of PLDT(Note 8) | ||||||||||||
Basic | 212.85 | 210.38 | 179.96 | |||||||||
Diluted | 212.85 | 210.36 | 179.95 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
NET INCOME FOR THE YEAR(Note 4) | 40,259 | 40,095 | 34,976 | |||||||||
OTHER COMPREHENSIVE INCOME (LOSS)(Note 6) | ||||||||||||
Revaluation increment on investment properties: | 314 | — | — | |||||||||
Revaluation increment of property, plant and equipment transferred to investment properties during the year | 449 | — | — | |||||||||
Income tax related to revaluation increment charged directly to equity | (135 | ) | — | — | ||||||||
Net gains (losses) on available-for-sale financial assets: | 22 | 3 | (9 | ) | ||||||||
Gains (losses) from changes in fair value recognized during the year | 23 | 3 | (9 | ) | ||||||||
Losses removed from other comprehensive income taken to income | 3 | — | — | |||||||||
Income tax related to fair value adjustments charged directly to equity | (4 | ) | — | — | ||||||||
Foreign currency translation differences of subsidiaries | (761 | ) | (657 | ) | 1,490 | |||||||
Net transactions on cash flow hedges — net of tax: | — | — | (411 | ) | ||||||||
Net losses on cash flow hedges | — | — | (662 | ) | ||||||||
Income tax related to cash flow hedges: | — | — | 251 | |||||||||
Charged directly to equity | — | — | 251 | |||||||||
Total Other Comprehensive Income (Loss) | (425 | ) | (654 | ) | 1,070 | |||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 39,834 | 39,441 | 36,046 | |||||||||
ATTRIBUTABLE TO: | ||||||||||||
Equity holders of PLDT | 39,958 | 39,142 | 35,322 | |||||||||
Non-controlling interests | (124 | ) | 299 | 724 | ||||||||
39,834 | 39,441 | 36,046 | ||||||||||
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Equity | ||||||||||||||||||||||||||||||||||||||||||||
Portion of | Total Equity | |||||||||||||||||||||||||||||||||||||||||||
Stock | Convertible | Capital in | Other | Attributable to | Non- | |||||||||||||||||||||||||||||||||||||||
Preferred | Common | Treasury | Options | Preferred | Excess of | Retained | Comprehensive | Equity Holders | controlling | Total | ||||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Issued | Stock | Par Value | Earnings | Income | of PLDT | Interests | Equity | ||||||||||||||||||||||||||||||||||
Balances as at January 1, 2008 | 4,417 | 943 | — | 9 | 6 | 67,057 | 39,894 | (1,383 | ) | 110,943 | 1,402 | 112,345 | ||||||||||||||||||||||||||||||||
Total comprehensive income for the year: | — | — | — | — | — | — | 34,317 | 1,005 | 35,322 | 724 | 36,046 | |||||||||||||||||||||||||||||||||
Net income for the year (Notes 4 and 8) | — | — | — | — | — | — | 34,317 | — | 34,317 | 659 | 34,976 | |||||||||||||||||||||||||||||||||
Other comprehensive income (Note 6) | — | — | — | — | — | — | — | 1,005 | 1,005 | 65 | 1,070 | |||||||||||||||||||||||||||||||||
Cash dividends (Note 19) | — | — | — | — | — | — | (37,034 | ) | — | (37,034 | ) | (398 | ) | (37,432 | ) | |||||||||||||||||||||||||||||
Issuance of capital stock — net of conversion (Note 19) | (2 | ) | 4 | — | — | (6 | ) | 1,270 | — | — | 1,266 | — | 1,266 | |||||||||||||||||||||||||||||||
Exercised option shares | — | — | — | (3 | ) | — | 10 | — | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||
Acquisition of treasury stocks (Notes 2, 8, 19 and 25) | — | — | (4,973 | ) | — | — | — | — | — | (4,973 | ) | (308 | ) | (5,281 | ) | |||||||||||||||||||||||||||||
Business combinations and others (Note 13) | — | — | — | — | — | — | — | — | — | 18 | 18 | |||||||||||||||||||||||||||||||||
Balances as at December 31, 2008 | 4,415 | 947 | (4,973 | ) | 6 | — | 68,337 | 37,177 | (378 | ) | 105,531 | 1,438 | 106,969 | |||||||||||||||||||||||||||||||
Balances as at January 1, 2009 | 4,415 | 947 | (4,973 | ) | 6 | — | 68,337 | 37,177 | (378 | ) | 105,531 | 1,438 | 106,969 | |||||||||||||||||||||||||||||||
Total comprehensive income for the year: | — | — | — | — | — | — | 39,781 | (639 | ) | 39,142 | 299 | 39,441 | ||||||||||||||||||||||||||||||||
Net income for the year (Notes 4 and 8) | — | — | — | — | — | — | 39,781 | — | 39,781 | 314 | 40,095 | |||||||||||||||||||||||||||||||||
Other comprehensive income (Note 6) | — | — | — | — | — | — | — | (639 | ) | (639 | ) | (15 | ) | (654 | ) | |||||||||||||||||||||||||||||
Cash dividends (Note 19) | — | — | — | — | — | — | (39,214 | ) | — | (39,214 | ) | (436 | ) | (39,650 | ) | |||||||||||||||||||||||||||||
Issuance of capital stock — net of conversion (Note 19) | 1 | — | — | — | — | 11 | — | — | 12 | — | 12 | |||||||||||||||||||||||||||||||||
Exercised option shares | — | — | — | (6 | ) | — | 21 | — | — | 15 | — | 15 | ||||||||||||||||||||||||||||||||
Acquisition of treasury stocks (Notes 2, 8, 19 and 25) | — | — | (1,432 | ) | — | — | — | — | — | (1,432 | ) | (320 | ) | (1,752 | ) | |||||||||||||||||||||||||||||
Business combinations and others (Note 13) | — | — | — | — | — | (5,479 | ) | — | — | (5,479 | ) | (431 | ) | (5,910 | ) | |||||||||||||||||||||||||||||
Balances as at December 31, 2009 | 4,416 | 947 | (6,405 | ) | — | — | 62,890 | 37,744 | (1,017 | ) | 98,575 | 550 | 99,125 | |||||||||||||||||||||||||||||||
Balances as at January 1, 2010 | 4,416 | 947 | (6,405 | ) | — | — | 62,890 | 37,744 | (1,017 | ) | 98,575 | 550 | 99,125 | |||||||||||||||||||||||||||||||
Total comprehensive income for the year: | — | — | — | — | — | — | 40,217 | (259 | ) | 39,958 | (124 | ) | 39,834 | |||||||||||||||||||||||||||||||
Net income for the year (Notes 4 and 8) | — | — | — | — | — | — | 40,217 | — | 40,217 | 42 | 40,259 | |||||||||||||||||||||||||||||||||
Other comprehensive income (Note 6) | — | — | — | — | — | — | — | (259 | ) | (259 | ) | (166 | ) | (425 | ) | |||||||||||||||||||||||||||||
Cash dividends (Note 19) | — | — | — | — | — | — | (41,367 | ) | — | (41,367 | ) | (50 | ) | (41,417 | ) | |||||||||||||||||||||||||||||
Issuance of capital stock — net of conversion (Note 19) | 3 | — | — | — | — | — | — | — | 3 | — | 3 | |||||||||||||||||||||||||||||||||
Acquisition of treasury stocks (Notes 2, 8, 19 and 25) | — | — | (100 | ) | — | — | — | — | — | (100 | ) | (6 | ) | (106 | ) | |||||||||||||||||||||||||||||
Business combinations and others (Note 13) | — | — | — | — | — | — | — | — | — | (54 | ) | (54 | ) | |||||||||||||||||||||||||||||||
Balances as at December 31, 2010 | 4,419 | 947 | (6,505 | ) | — | — | 62,890 | 36,594 | (1,276 | ) | 97,069 | 316 | 97,385 | |||||||||||||||||||||||||||||||
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2010 | 2009 | 2008 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Income before income tax (Note 4) | 53,685 | 54,839 | 54,049 | |||||||||
Adjustments for: | ||||||||||||
Depreciation and amortization (Notes 3, 4 and 9) | 26,277 | 25,607 | 24,709 | |||||||||
Interest on loans and other related items — net (Notes 4, 5, 9, 20 and 28) | 5,471 | 5,317 | 5,083 | |||||||||
Asset impairment (Notes 3, 4, 5, 9, 10, 14, 16, 17 and 28) | 2,438 | 5,061 | 4,180 | |||||||||
Losses (gains) on derivative financial instruments — net (Notes 4 and 28) | 1,741 | 1,006 | (3,115 | ) | ||||||||
Incentive plans (Notes 3, 5 and 25) | 1,392 | 1,833 | 1,281 | |||||||||
Accretion on financial liabilities — net (Notes 5, 20 and 28) | 1,177 | 1,062 | 956 | |||||||||
Amortization of intangible assets (Notes 3 and 14) | 388 | 368 | 377 | |||||||||
Pension benefit costs (Notes 3, 5 and 25) | 236 | 1,306 | 725 | |||||||||
Gains on disposal of property, plant and equipment (Note 9) | (913 | ) | (127 | ) | (534 | ) | ||||||
Interest income (Notes 4, 5 and 15) | (1,200 | ) | (1,539 | ) | (1,668 | ) | ||||||
Equity share in net losses (earnings) of associates and joint ventures (Notes 4 and 10) | (1,408 | ) | (2 | ) | 176 | |||||||
Foreign exchange losses (gains) — net (Notes 4, 9 and 28) | (1,807 | ) | (909 | ) | 6,170 | |||||||
Dividends on preferred stock subject to mandatory redemption (Notes 5 and 8) | — | — | 4 | |||||||||
Others | (352 | ) | (802 | ) | 830 | |||||||
Operating income before changes in assets and liabilities | 87,125 | 93,020 | 93,223 | |||||||||
Decrease (increase) in: | ||||||||||||
Trade and other receivables | (3,132 | ) | (1,324 | ) | (3,003 | ) | ||||||
Inventories and supplies | 89 | (305 | ) | (913 | ) | |||||||
Prepayments | (146 | ) | (1,333 | ) | (877 | ) | ||||||
Advances and refundable deposits | (15 | ) | 271 | (1,338 | ) | |||||||
Increase (decrease) in: | ||||||||||||
Accounts payable | 6,407 | 130 | 5,244 | |||||||||
Accrued expenses and other current liabilities | 3,722 | 8,227 | 2,084 | |||||||||
Pension and other employee benefits | (4,603 | ) | (9,071 | ) | (1,125 | ) | ||||||
Customers’ deposits | 57 | 32 | 27 | |||||||||
Other noncurrent liabilities | 50 | (46 | ) | 1 | ||||||||
Net cash generated from operations | 89,554 | 89,601 | 93,323 | |||||||||
Income taxes paid | (12,294 | ) | (15,215 | ) | (15,021 | ) | ||||||
Net cash provided by operating activities | 77,260 | 74,386 | 78,302 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Proceeds from: | ||||||||||||
Maturity of short-term investments | 6,256 | 9,728 | 28,476 | |||||||||
Disposal of property, plant and equipment (Note 9) | 859 | 932 | 1,015 | |||||||||
Redemption of investment in debt securities | 409 | 4,005 | 2,676 | |||||||||
Disposal of investment properties (Note 12) | 89 | 18 | 9 | |||||||||
Disposal of investments held-for-sale | 10 | — | — | |||||||||
Disposal of available-for-sale financial assets | — | — | 174 | |||||||||
Disposal of investment in associates | — | — | 3 | |||||||||
Interest received | 1,165 | 1,352 | 1,461 | |||||||||
Dividends received | 534 | 360 | — | |||||||||
Payments for: | ||||||||||||
Available-for-sale financial assets | (2 | ) | — | (206 | ) | |||||||
Acquisition of intangibles (Notes 13 and 14) | (13 | ) | (21 | ) | (69 | ) | ||||||
Purchase of subsidiaries and non-controlling interests — net of cash acquired (Note 13) | (188 | ) | (8,989 | ) | (743 | ) | ||||||
Purchase of investment in debt securities (Note 10) | (403 | ) | (3,572 | ) | (3,457 | ) | ||||||
Short-term investments | (3,114 | ) | (6,838 | ) | (21,072 | ) | ||||||
Notes receivable | — | (80 | ) | — | ||||||||
Purchase of investments in associates (Note 10) | — | (18,070 | ) | — | ||||||||
Interest paid — capitalized to property, plant and equipment (Notes 4, 5, 9, 20 and 28) | (710 | ) | (691 | ) | (778 | ) | ||||||
Additions to property, plant and equipment (Notes 4 and 9) | (28,056 | ) | (27,378 | ) | (24,425 | ) | ||||||
Decrease (increase) in advances and refundable deposits | (119 | ) | 112 | (78 | ) | |||||||
Net cash used in investing activities | (23,283 | ) | (49,132 | ) | (17,014 | ) | ||||||
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For the Years Ended December 31, 2010, 2009 and 2008
(in million pesos)
2010 | 2009 | 2008 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from availment of long-term debt (Note 20) | 7,246 | 41,989 | 17,912 | |||||||||
Availment of long-term financing for capital expenditures | 3,777 | 7,993 | 6,614 | |||||||||
Proceeds from issuance of capital stock | 3 | 18 | 8 | |||||||||
Payments of obligations under finance lease | (29 | ) | (24 | ) | (474 | ) | ||||||
Payments for acquisition of treasury shares (Notes 8, 19 and 28) | (106 | ) | (1,752 | ) | (5,281 | ) | ||||||
Payments of debt issuance costs (Note 20) | (111 | ) | (173 | ) | (149 | ) | ||||||
Settlements of derivative financial instruments (Note 28) | (1,095 | ) | (1,913 | ) | (2,891 | ) | ||||||
Payments of notes payable (Note 20) | (2,274 | ) | (270 | ) | (678 | ) | ||||||
Settlement of long-term financing for capital expenditures | (3,702 | ) | (4,678 | ) | (5,519 | ) | ||||||
Interest paid — net of capitalized portion (Notes 5, 20 and 28) | (5,580 | ) | (5,239 | ) | (5,167 | ) | ||||||
Payments of long-term debt (Note 20) | (12,371 | ) | (18,958 | ) | (13,375 | ) | ||||||
Cash dividends paid (Note 19) | (41,080 | ) | (39,286 | ) | (37,124 | ) | ||||||
Proceeds from notes payable (Note 20) | — | 2,000 | 660 | |||||||||
Net cash used in financing activities | (55,322 | ) | (20,293 | ) | (45,464 | ) | ||||||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (296 | ) | (326 | ) | 413 | |||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,641 | ) | 4,635 | 16,237 | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 38,319 | 33,684 | 17,447 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 36,678 | 38,319 | 33,684 | |||||||||
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2010 | 2009 | |||||||||||||||||||
Place of | Percentage of Ownership | |||||||||||||||||||
Name of Subsidiary | Incorporation | Principal Business Activity | Direct | Indirect | Direct | Indirect | ||||||||||||||
Wireless | ||||||||||||||||||||
Smart: | Philippines | Cellular mobile services | 100.0 | — | 100.0 | — | ||||||||||||||
Smart Broadband, Inc., or SBI, and Subsidiaries, or SBI Group | Philippines | Internet broadband distribution | — | 100.0 | — | 100.0 | ||||||||||||||
Primeworld Digital Systems, Inc., or PDSI | Philippines | Internet broadband distribution services | — | 100.0 | — | 100.0 | ||||||||||||||
I-Contacts Corporation, or I-Contacts | Philippines | Call center services | — | 100.0 | — | 100.0 | ||||||||||||||
Wolfpac Mobile, Inc., or Wolfpac | Philippines | Mobile applications development and services | — | 100.0 | — | 100.0 | ||||||||||||||
Wireless Card, Inc., or WCI | Philippines | Promotion of the sale and/or patronage of debit and/or charge cards | — | 100.0 | — | 100.0 | ||||||||||||||
Smarthub, Inc., or SHI | Philippines | Software development and sale of maintenance and support services | — | 100.0 | — | 100.0 | ||||||||||||||
Smart Money Holdings Corporation, or SMHC: | Cayman Islands | Investment company | — | 100.0 | — | 100.0 | ||||||||||||||
Smart Money, Inc., or SMI | Cayman Islands | Mobile commerce solutions marketing | — | 100.0 | — | 100.0 | ||||||||||||||
Telecoms Solutions, Inc., or TSI | Mauritius | Mobile commerce platforms | — | 100.0 | — | 100.0 | ||||||||||||||
Far East Capital Limited and Subsidiary | Cayman Islands | Cost effective offshore financing and risk management activities for Smart | — | 100.0 | — | 100.0 | ||||||||||||||
PH Communications Holdings Corporation, or PHC | Philippines | Investment company | — | 100.0 | — | 100.0 | ||||||||||||||
Francom Holdings, Inc., or FHI: | Philippines | Investment company | — | 100.0 | — | 100.0 | ||||||||||||||
Connectivity Unlimited Resource Enterprise, Inc., or CURE | Philippines | Cellular mobile services | — | 100.0 | — | 100.0 | ||||||||||||||
Chikka Holdings Limited, or Chikka, and Subsidiaries, or Chikka Group | British Virgin Islands | Mobile applications development and services; Content provider | — | 100.0 | — | 100.0 | ||||||||||||||
PLDT Communications and Energy Ventures, Inc., or PCEV, (formerly known as Pilipino Telephone Corporation, or Piltel) and Subsidiaries, or PCEV Group | Philippines | Investment company | — | 99.5 | — | 99.5 | ||||||||||||||
SmartConnect Holdings Pte. Ltd., or SCH: | Singapore | Investment company | — | 100.0 | — | 100.0 | ||||||||||||||
SmartConnect Global Pte. Ltd., or SGP | Singapore | International trade of satellites and Global System for Mobile Communication, or GSM, enabled global telecommunications | — | 100.0 | — | 100.0 | ||||||||||||||
3rd Brand Pte. Ltd., or 3rd Brand | Singapore | Solutions and systems integration services | — | 85.0 | — | 85.0 | ||||||||||||||
Blue Ocean Wireless, or BOW | Isle of Man | Delivery of GSM communication capability for the maritime sector | — | 51.0 | — | 51.0 | ||||||||||||||
Telesat, Inc., or Telesat* | Philippines | Satellite communications services | 100.0 | — | 100.0 | — | ||||||||||||||
ACeS Philippines Cellular Satellite Corporation, or ACeS Philippines | Philippines | Satellite information and messaging services | 88.5 | 11.5 | 88.5 | 11.5 | ||||||||||||||
Mabuhay Satellite Corporation, or Mabuhay Satellite* | Philippines | Satellite communications services | 67.0 | — | 67.0 | — | ||||||||||||||
Fixed Line | ||||||||||||||||||||
PLDT Clark Telecom, Inc., or ClarkTel | Philippines | Telecommunications services | 100.0 | — | 100.0 | — | ||||||||||||||
PLDT Subic Telecom, Inc., or SubicTel | Philippines | Telecommunications services | 100.0 | — | 100.0 | — | ||||||||||||||
PLDT Global Corporation, or PLDT Global, and Subsidiaries, or PLDT Global Group British Virgin | Islands | Telecommunications services | 100.0 | — | 100.0 | — | ||||||||||||||
Smart-NTT Multimedia, Inc., or SNMI* | Philippines | Data and network services | 100.0 | — | 100.0 | — | ||||||||||||||
PLDT-Philcom, Inc. (formerly known as Philcom Corporation), or Philcom, and Subsidiaries, or Philcom Group | Philippines | Telecommunications services | 100.0 | — | 100.0 | — | ||||||||||||||
PLDT-Maratel, Inc., or Maratel | Philippines | Telecommunications services | 97.8 | — | 97.8 | — | ||||||||||||||
Bonifacio Communications Corporation, or BCC | Philippines | Telecommunications, infrastructure and related value-added services, or VAS | 75.0 | — | 75.0 | — | ||||||||||||||
Information and Communications Technology, or ICT | ||||||||||||||||||||
ePLDT, Inc., or ePLDT: | Philippines | Information and communications infrastructure for Internet-based services, e-commerce, customer relationship management and IT-related services | 100.0 | — | 100.0 | — | ||||||||||||||
SPi Technologies, Inc., or SPi, and Subsidiaries, or SPi Group | Philippines | Knowledge processing solutions | — | 100.0 | — | 100.0 |
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2010 | 2009 | |||||||||||||||||||
Place of | Percentage of Ownership | |||||||||||||||||||
Name of Subsidiary | Incorporation | Principal Business Activity | Direct | Indirect | Direct | Indirect | ||||||||||||||
SPi CRM Inc., or SPi CRM (formerly ePLDT Ventus, Inc.)** | Philippines | Customer relationship management | — | 100.0 | — | 100.0 | ||||||||||||||
Parlance Systems, Inc., or Parlance** | Philippines | Customer relationship management | — | — | — | 100.0 | ||||||||||||||
Vocativ Systems, Inc., or Vocativ** | Philippines | Customer relationship management | — | — | — | 100.0 | ||||||||||||||
Infocom Technologies, Inc., or Infocom | Philippines | Internet services | — | 99.6 | — | 99.6 | ||||||||||||||
BayanTrade, Inc. (formerly BayanTrade Dotcom, Inc.), or BayanTrade, and Subsidiaries, or BayanTrade Group | Philippines | Internet-based purchasing, IT consulting and professional services | — | 93.5 | — | 93.5 | ||||||||||||||
Digital Paradise, Inc., or Digital Paradise | Philippines | Internet services | — | 75.0 | — | 75.0 | ||||||||||||||
Level Up!, Inc., or Level Up! | Philippines | Publisher of online games | — | 57.5 | — | 60.0 | ||||||||||||||
netGames, Inc., or netGames | Philippines | Customer relationship management | — | 57.5 | — | 60.0 | ||||||||||||||
* | Ceased commercial operations | |
** | On April 8, 2010, SPi CRM, Parlance and Vocativ were merged, with SPi CRM as the surviving entity. |
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• | Amendment to IFRS 2, Share-based Payment — Group Cash-settled Share-based Payment Transactions; | ||
• | Improvements to IFRS 5, Noncurrent Assets Held-for-Sale and Discontinued Operations; | ||
• | Amendment to International Accounting Standard, or IAS, 39, Financial Instruments: Recognition and Measurement — Eligible Hedged Items; | ||
• | IFRIC 17, Distributions of Non-cash Assets to Owners;and | ||
• | Improvements to IFRSs (2009) |
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• | IFRS 2, Share-based Payment.The amendment clarifies that the contribution of a business on formation of a joint venture and combinations under common control are not within the scope ofIFRS 2, even though they are out of scope of RevisedIFRS 3, Business Combinations. | ||
• | IFRS 5, Noncurrent Assets Held-for-Sale and Discontinued Operations.The amendment clarifies that the disclosures required in respect of noncurrent assets or disposal groups classified as held-for-sale or discontinued operations are only those set out inIFRS 5. The disclosure requirements of other IFRSs apply only if specifically required for such noncurrent assets or discontinued operations. | ||
It also clarifies that the general requirements ofIAS 1, Presentation of Financial Statements,still apply, particularly paragraphs 15 (to achieve fair presentation) and 125 (sources of estimation and uncertainty). | |||
• | IFRS 8, Operating Segments.The amendment clarifies that segment assets and liabilities need only be reported when those assets and liabilities are included in measures that are used by the chief operating decision maker. As the chief operating decision maker reviews segment revenues, net income (loss) for the year, assets, liabilities, and other segment information of our reportable operating segments, we have continued to disclose this information inNote 4 — Operating Segment Information. | ||
• | IAS 1, Presentation of Financial Statements.The amendment terms of a liability that could result, at anytime, in its settlement by the issuance of equity instruments at the option of the counterparty do not affect its classification. | ||
• | IAS 7, Statement of Cash Flows.The amendment explicitly states that only expenditure that results in a recognized asset can be classified as a cash flow from investing activities. This amendment will impact, among others, the presentation in the statement of cash flows of the contingent consideration on the business combination completed in 2010 upon cash settlement. | ||
• | IAS 17, Leases.The amendment removes the specific guidance on classifying land as lease so that only the general guidance remains. | ||
• | IAS 36, Impairment of Assets.The amendment clarifies that the largest unit permitted for allocating goodwill acquired in a business combination is the operating segment, as defined inIFRS 8, before aggregation for reporting purposes. The amendment had no impact on us as the annual impairment test is performed before aggregation. |
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• | IAS 38, Intangible Assets.The amendment clarifies that if an intangible asset acquired in a business combination is identifiable only with another intangible asset, the acquirer may recognize the group of intangible assets as a single asset, provided that the individual assets have similar useful lives. It also clarifies that the valuation techniques presented for determining the fair value of intangible assets acquired in a business combination that are not traded in active markets are only examples and are not restrictive on the methods that can be used. | ||
• | IAS 39, Financial Instruments: Recognition and Measurement.The amendment clarifies that a prepayment option is considered closely related to the host contract when the exercise price of a prepayment option reimburses the lender up to the approximate present value of lost interest for the remaining term of the host contract. The amendment also clarifies that the scope exemption for contracts between an acquirer and a vendor in a business combination to buy or sell and acquiree at a future date, applies only to forward binding contracts, and not derivative contracts where some actions by either party have yet to be taken. It also clarifies that gains or losses on cash flow hedges of a forecast transaction that subsequently results in the recognition of a financial instrument or on cash flow hedges of recognized financial instruments should be reclassified in the year that the hedged forecast cash flows affected profit or loss. | ||
• | IFRIC 9, Reassessment of Embedded Derivatives.The improvement clarifies that it does not apply to possible reassessment, at the date of acquisition, of embedded derivatives in contracts acquired in a combination between entities or businesses under common control or in the formation of a joint venture. | ||
• | IFRIC 16, Hedges of a Net Investment in a Foreign Operation.The improvement states that, in a hedge of a net investment in a foreign operation, qualifying hedging instruments may be held by any entity or entities within the group, including the foreign operation itself, as long as the designation, documentation and effectiveness requirements ofIAS 39that relate to a net investment hedge are satisfied. |
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• | IFRS 3, Business Combinations.The improvements include: (a) clarification that the amendments toIFRS 7, Financial Instruments: Disclosures, IAS 32, Financial Instruments: Presentation,andIAS 39, Financial Instruments: Recognition and Measurement,that eliminate the exemption for contingent consideration, do not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application ofIFRS 3(as revised in 2008); (b) guidance that the choice of measuring non-controlling interests at fair value or at the proportionate share of the acquiree’s net assets applies only to instruments that represent present ownership interests and entitle their holders to a proportionate share of the net assets in the event of liquidation. All other components of non-controlling interest are measured at fair value unless another measurement basis is required by IFRS; and (c) clarification that the application guidance inIFRS 3applies to all share-based payment transactions that are part of a business combination, including un-replaced and voluntarily replaced share-based payment awards. These improvements are applied prospectively. | ||
• | IFRS 7, Financial Instruments.The amendment emphasizes the interaction between quantitative and qualitative disclosures about the nature and extent of risks associated with financial instruments. This amendment is applied retrospectively. | ||
• | IAS 1, Presentation of Financial Statements.The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. This amendment is applied retrospectively. | ||
• | IAS 27, Consolidated and Separate Financial Statements.The improvement clarifies that the consequential amendments fromIAS 27made toIAS 21, The Effect of Changes in Foreign Exchange Rates, IAS 28, Investments in Associates,andIAS 31, Interests in Joint Ventures,apply prospectively for annual periods beginning on or after July 1, 2009, or earlier whenIAS 27is applied earlier. This improvement is applied retrospectively. | ||
• | IAS 34, Interim Financial Reporting.The amendment provides guidance on how to apply disclosure principles inIAS 34and add disclosure requirements around: (a) the circumstances likely to affect fair |
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values of financial instruments and their classification; (b) transfers of financial instruments between different levels of the fair value hierarchy; (c) changes in classification of financial assets; and (d) changes in contingent liabilities and assets. This amendment is applied retrospectively. |
• | IFRIC 13, Customer Loyalty Programmes.The amendment clarifies the meaning of fair value in the context of measuring award credits under customer loyalty programmes. |
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• | Wireless — wireless telecommunications services provided through our cellular service providers namely, Smart, PCEV, (on August 17, 2009, Smart acquired the cellular business of PCEV, which is formerly known as Pilipino Telephone Corporation) and CURE; SBI, BOW, Airborne Access Corporation and PDSI, our wireless broadband service providers; Wolfpac and Chikka Group, our wireless content operators; and ACeS Philippines, our satellite operator; | ||
• | Fixed Line — fixed line telecommunications services primarily provided by PLDT. We also provide fixed line services through PLDT’s subsidiaries ClarkTel, SubicTel, Philcom, Maratel, SBI, PDSI, BCC and PLDT Global, all of which together account for approximately 4% of our consolidated fixed line subscribers; and | ||
• | ICT — information and communications infrastructure and services for internet applications, internet protocol-based solutions and multimedia content delivery provided by ePLDT and BayanTrade Group; knowledge processing solutions provided by the SPi Group; customer relationship management provided by SPi CRM (on April 8, 2010, SPi CRM, Parlance and Vocativ were merged wherein SPi CRM became the surviving entity); internet and online gaming services provided by Infocom, Digital Paradise, netGames and Level Up!; and | ||
e-commerce, and IT-related services provided by other investees of ePLDT, as discussed inNote 10 — Investments in Associates and Joint Ventures. |
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
As at and for the year ended December 31, 2010 | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
External customer: | 94,343 | 40,167 | 9,949 | — | 144,459 | |||||||||||||||
Service revenues (Note 3) | 92,986 | 39,825 | 9,431 | — | 142,242 | |||||||||||||||
Non-service revenues (Notes 3 and 5) | 1,357 | 342 | 518 | — | 2,217 | |||||||||||||||
Inter-segment transactions: | 844 | 8,784 | 1,409 | (11,037 | ) | — | ||||||||||||||
Service revenues (Note 3) | 844 | 8,784 | 1,246 | (10,874 | ) | — | ||||||||||||||
Non-service revenues (Notes 3 and 5) | — | — | 163 | (163 | ) | — | ||||||||||||||
Total revenues | 95,187 | 48,951 | 11,358 | (11,037 | ) | 144,459 | ||||||||||||||
Results | ||||||||||||||||||||
Depreciation and amortization (Notes 3 and 9) | 13,243 | 12,292 | 742 | — | 26,277 | |||||||||||||||
Asset impairment (Notes 3, 5, 9, 10, 14, 16, 17, 18 and 28) | 824 | 291 | 1,323 | — | 2,438 | |||||||||||||||
Financing costs — net (Notes 5, 9, 20 and 28) | 2,683 | 3,856 | 176 | (17 | ) | 6,698 | ||||||||||||||
Equity share in net earnings of associates and joint ventures (Note 10) | 1,221 | — | 187 | — | 1,408 | |||||||||||||||
Interest income (Note 5) | 698 | 484 | 35 | (17 | ) | 1,200 | ||||||||||||||
Provision for (benefit from) income tax (Notes 3 and 7) | 11,414 | 2,050 | (38 | ) | — | 13,426 | ||||||||||||||
Net income (loss) for the year / Segment profit (loss) for the year | 35,376 | 5,210 | (327 | ) | — | 40,259 | ||||||||||||||
Adjusted EBITDA for the year | 58,945 | 22,668 | 1,723 | 381 | 83,717 | |||||||||||||||
Adjusted EBITDA margin for the year | 63 | % | 47 | % | 16 | % | — | 59 | % | |||||||||||
Core income for the year | 35,418 | 5,580 | 1,030 | — | 42,028 | |||||||||||||||
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
Assets and liabilities | ||||||||||||||||||||
Operating assets | 111,852 | 197,318 | 15,095 | (75,763 | ) | 248,502 | ||||||||||||||
Investments in associates and joint ventures (Notes 3, 5, 10 and 28) | 22,275 | — | 928 | — | 23,203 | |||||||||||||||
Deferred income tax assets — net (Notes 3, 7 and 28) | 41 | 5,908 | 161 | — | 6,110 | |||||||||||||||
Consolidated total assets | 134,168 | 203,226 | 16,184 | (75,763 | ) | 277,815 | ||||||||||||||
Operating liabilities | 96,895 | 104,944 | 4,435 | (26,943 | ) | 179,331 | ||||||||||||||
Deferred income tax liabilities — net (Notes 3, 7 and 28) | 596 | 22 | 178 | 303 | 1,099 | |||||||||||||||
Consolidated total liabilities | 97,491 | 104,966 | 4,613 | (26,640 | ) | 180,430 | ||||||||||||||
Other segment information | ||||||||||||||||||||
Capital expenditures (including capitalized interest) | 16,959 | 11,057 | 750 | — | 28,766 | |||||||||||||||
As at and for the year ended December 31, 2009 | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
External customer: | 96,560 | 41,318 | 10,115 | — | 147,993 | |||||||||||||||
Service revenues (Note 3) | 94,865 | 41,085 | 9,617 | — | 145,567 | |||||||||||||||
Non-service revenues (Notes 3 and 5) | 1,695 | 233 | 498 | — | 2,426 | |||||||||||||||
Inter-segment transactions: | 964 | 10,055 | 1,434 | (12,453 | ) | — | ||||||||||||||
Service revenues (Note 3) | 964 | 10,055 | 1,234 | (12,253 | ) | — | ||||||||||||||
Non-service revenues (Notes 3 and 5) | — | — | 200 | (200 | ) | — | ||||||||||||||
Total revenues | 97,524 | 51,373 | 11,549 | (12,453 | ) | 147,993 | ||||||||||||||
Results | ||||||||||||||||||||
Depreciation and amortization (Notes 3 and 9) | 13,237 | 11,619 | 751 | — | 25,607 | |||||||||||||||
Asset impairment (Notes 3, 5, 9, 10, 14, 16, 17, 18 and 28) | 2,026 | 2,901 | 134 | — | 5,061 | |||||||||||||||
Financing costs — net (Notes 5, 9, 20 and 28) | 2,619 | 3,796 | 171 | (30 | ) | 6,556 | ||||||||||||||
Interest income (Note 5) | 1,139 | 402 | 28 | (30 | ) | 1,539 | ||||||||||||||
Equity share in net earnings (losses) of associates and joint ventures (Note 10) | (68 | ) | (98 | ) | 168 | — | 2 | |||||||||||||
Provision for (benefit from) income tax (Notes 3 and 7) | 12,514 | 2,258 | (28 | ) | — | 14,744 | ||||||||||||||
Net income for the year / Segment profit for the year | 33,727 | 5,864 | 504 | — | 40,095 | |||||||||||||||
Adjusted EBITDA for the year | 59,411 | 25,215 | 1,330 | 238 | 86,194 | |||||||||||||||
Adjusted EBITDA margin for the year | 62 | % | 49 | % | 12 | % | — | 59 | % | |||||||||||
Core income for the year | 33,026 | 7,502 | 613 | (3 | ) | 41,138 | ||||||||||||||
Assets and liabilities | ||||||||||||||||||||
Operating assets | 107,880 | 206,385 | 16,297 | (80,368 | ) | 250,194 | ||||||||||||||
Investments in associates and joint ventures (Notes 3, 5, 10 and 28) | 21,440 | — | 793 | — | 22,233 | |||||||||||||||
Deferred income tax assets — net (Notes 3, 7 and 28) | 187 | 7,346 | 188 | — | 7,721 | |||||||||||||||
Total assets | 129,507 | 213,731 | 17,278 | (80,368 | ) | 280,148 | ||||||||||||||
Operating liabilities | 96,194 | 111,294 | 4,574 | (32,360 | ) | 179,702 | ||||||||||||||
Deferred income tax liabilities — net (Notes 3, 7 and 28) | 640 | 21 | 328 | 332 | 1,321 | |||||||||||||||
Total liabilities | 96,834 | 111,315 | 4,902 | (32,028 | ) | 181,023 | ||||||||||||||
Other segment information | ||||||||||||||||||||
Capital expenditures (including capitalized interest) | 16,281 | 11,059 | 729 | — | 28,069 | |||||||||||||||
As at and for the year ended December 31, 2008 | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
External customer: | 95,365 | 40,736 | 9,736 | — | 145,837 | |||||||||||||||
Service revenues | 93,106 | 40,316 | 9,451 | — | 142,873 | |||||||||||||||
Non-service revenues (Note 5) | 2,259 | 420 | 285 | — | 2,964 | |||||||||||||||
Inter-segment transactions: | 487 | 8,950 | 1,247 | (10,684 | ) | — | ||||||||||||||
Service revenues | 487 | 8,950 | 966 | (10,403 | ) | — | ||||||||||||||
Non-service revenues | — | — | 281 | (281 | ) | — | ||||||||||||||
Total revenues | 95,852 | 49,686 | 10,983 | (10,684 | ) | 145,837 | ||||||||||||||
Results | ||||||||||||||||||||
Depreciation and amortization (Notes 3 and 9) | 11,975 | 11,901 | 833 | — | 24,709 | |||||||||||||||
Asset impairment (Notes 3, 5, 9, 10, 14, 16, 17, 18 and 28) | 1,006 | 888 | 2,286 | — | 4,180 | |||||||||||||||
Provisions (Notes 3, 26 and 27) | 897 | 1 | — | — | 898 | |||||||||||||||
Interest income (Note 5) | 1,197 | 448 | 22 | 1 | 1,668 | |||||||||||||||
Equity share in net earnings (losses) of associates and joint ventures (Note 10) | (119 | ) | (74 | ) | 17 | — | (176 | ) | ||||||||||||
Financing costs — net (Notes 5, 9, 20 and 28) | 2,029 | 3,903 | 172 | — | 6,104 |
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
Provision for (benefit from) income tax (Notes 3 and 7) | 16,124 | 3,048 | (99 | ) | — | 19,073 | ||||||||||||||
Net income (loss) for the year / Segment profit (loss) for the year | 29,499 | 7,732 | (2,186 | ) | (69 | ) | 34,976 | |||||||||||||
Adjusted EBITDA for the year | 60,967 | 25,854 | 1,056 | 119 | 87,996 | |||||||||||||||
Adjusted EBITDA margin for the year | 65 | % | 52 | % | 10 | % | — | 62 | % | |||||||||||
Core income for the year | 30,250 | 7,890 | 138 | (64 | ) | 38,214 | ||||||||||||||
Assets and liabilities | ||||||||||||||||||||
Operating assets | 112,162 | 189,377 | 15,963 | (75,723 | ) | 241,779 | ||||||||||||||
Investments in associates and joint ventures (Notes 3, 5, 10 and 28) | 531 | — | 643 | — | 1,174 | |||||||||||||||
Deferred income tax assets — net (Notes 3, 7 and 28) | 251 | 9,131 | 223 | — | 9,605 | |||||||||||||||
Total assets | 112,944 | 198,508 | 16,829 | (75,723 | ) | 252,558 | ||||||||||||||
Operating liabilities | 67,656 | 89,636 | 4,222 | (17,213 | ) | 144,301 | ||||||||||||||
Deferred income tax liabilities — net (Notes 3, 7 and 28) | 911 | — | 377 | — | 1,288 | |||||||||||||||
Total liabilities | 68,567 | 89,636 | 4,599 | (17,213 | ) | 145,589 | ||||||||||||||
Other segment information | ||||||||||||||||||||
Capital expenditures (including capitalized interest) | 16,728 | 7,651 | 824 | — | 25,203 | |||||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated adjusted EBITDA | 83,717 | 86,194 | 87,996 | |||||||||
Amortization of intangible assets (Notes 3 and 14) | (388 | ) | (368 | ) | (377 | ) | ||||||
Depreciation and amortization (Notes 3 and 9) | (26,277 | ) | (25,607 | ) | (24,709 | ) | ||||||
Asset impairment: | ||||||||||||
Investments in associates and joint ventures (Notes 3, 5 and 10) | (78 | ) | — | (282 | ) | |||||||
Property, plant and equipment (Notes 3, 5 and 9) | (120 | ) | (634 | ) | (104 | ) | ||||||
Goodwill and intangible assets (Notes 3, 5 and 14) | (1,243 | ) | (379 | ) | (2,450 | ) | ||||||
Prepayments and others (Notes 3, 5 and 18) | (55 | ) | (1,324 | ) | (23 | ) | ||||||
Consolidated operating profit for the year | 55,556 | 57,882 | 60,051 | |||||||||
Foreign exchange gains (losses) — net (Notes 9 and 28) | 1,807 | 909 | (6,170 | ) | ||||||||
Equity share in net earnings (losses) of associates and joint ventures (Note 10) | 1,408 | 2 | (176 | ) | ||||||||
Interest income (Note 5) | 1,200 | 1,539 | 1,668 | |||||||||
Gains (losses) on derivative financial instruments — net (Note 28) | (1,741 | ) | (1,006 | ) | 3,115 | |||||||
Financing costs — net (Notes 5, 9, 20 and 28) | (6,698 | ) | (6,556 | ) | (6,104 | ) | ||||||
Other income | 2,153 | 2,069 | 1,665 | |||||||||
Consolidated income before income tax | 53,685 | 54,839 | 54,049 | |||||||||
Provision for income tax (Notes 3 and 7) | 13,426 | 14,744 | 19,073 | |||||||||
Consolidated net income for the year | 40,259 | 40,095 | 34,976 | |||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated core income for the year | 42,028 | 41,138 | 38,214 | |||||||||
Foreign exchange gains (losses) — net (Notes 9 and 28) | 1,819 | 908 | (6,170 | ) | ||||||||
Core income adjustment on equity share in net earnings of associates and joint ventures | (699 | ) | (517 | ) | — | |||||||
Gains (losses) on derivative financial instruments — net, excluding hedge cost (Note 28) | (1,307 | ) | (407 | ) | 3,934 | |||||||
Asset impairment on noncurrent assets (Notes 3, 5, 9, 10, 14 and 18) | (1,492 | ) | (1,948 | ) | (2,486 | ) | ||||||
Net tax effect of aforementioned adjustments | (132 | ) | 607 | 825 | ||||||||
Net income for the year attributable to equity holders of PLDT (Notes 6 and 8) | 40,217 | 39,781 | 34,317 | |||||||||
Net income for the year attributable to non-controlling interests | 42 | 314 | 659 | |||||||||
Consolidated net income for the year | 40,259 | 40,095 | 34,976 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Wireless services | ||||||||||||
Service revenues: | ||||||||||||
Cellular | 85,555 | 87,829 | 87,410 | |||||||||
Broadband | 6,286 | 5,383 | 4,327 | |||||||||
Satellite and others | 1,145 | 1,653 | 1,369 | |||||||||
92,986 | 94,865 | 93,106 | ||||||||||
Non-service revenues: | ||||||||||||
Sale of cellular handsets, cellular subscriber identification module, or SIM,-packs and broadband data modems | 1,357 | 1,695 | 2,259 | |||||||||
Total wireless revenues | 94,343 | 96,560 | 95,365 | |||||||||
Fixed line services | ||||||||||||
Services revenues: | ||||||||||||
Local exchange | 15,205 | 15,530 | 15,794 | |||||||||
International long distance | 5,217 | 6,250 | 7,044 | |||||||||
National long distance | 4,651 | 6,239 | 6,143 | |||||||||
Data and other network | 14,448 | 12,585 | 10,864 | |||||||||
Miscellaneous | 304 | 481 | 471 | |||||||||
39,825 | 41,085 | 40,316 | ||||||||||
Non-service revenues: | ||||||||||||
Sale of computers | 342 | 233 | 420 | |||||||||
Total fixed line revenues | 40,167 | 41,318 | 40,736 | |||||||||
ICT services | ||||||||||||
Service revenues: | ||||||||||||
Knowledge processing solutions | 5,289 | 5,215 | 5,272 | |||||||||
Customer relationship management | 2,284 | 2,676 | 2,922 | |||||||||
Internet and online gaming | 1,027 | 1,079 | 945 | |||||||||
Data center and others | 831 | 647 | 312 | |||||||||
9,431 | 9,617 | 9,451 | ||||||||||
Non-service revenues: | ||||||||||||
Point-product-sales | 518 | 498 | 285 | |||||||||
Total ICT revenues | 9,949 | 10,115 | 9,736 | |||||||||
Total products and services from external customers | 144,459 | 147,993 | 145,837 | |||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Sale of computers, cellular handsets, cellular SIM-packs and broadband data modems | 1,699 | 1,928 | 2,679 | |||||||||
Point-product-sales | 518 | 498 | 285 | |||||||||
(Note 4) | 2,217 | 2,426 | 2,964 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Salaries and other employee benefits | 20,259 | 19,468 | 18,286 | |||||||||
Manpower rightsizing program, or MRP | 2,183 | 493 | 417 | |||||||||
Incentive plans (Notes 3 and 25) | 1,392 | 1,833 | 1,281 | |||||||||
Pension benefit costs (Notes 3 and 25) | 236 | 1,306 | 725 | |||||||||
24,070 | 23,100 | 20,709 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Cost of computers, cellular handsets, cellular SIM-packs sold and broadband data modems | 4,061 | 4,690 | 4,573 | |||||||||
Cost of point-product-sales | 588 | 584 | 511 | |||||||||
Cost of satellite air time and terminal units (Notes 24 and 26) | 122 | 158 | 168 | |||||||||
4,771 | 5,432 | 5,252 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Goodwill and intangible assets (Notes 3 and 14) | 1,243 | 379 | 2,450 | |||||||||
Trade and other receivables (Notes 3 and 16) | 834 | 2,335 | 1,079 | |||||||||
Property, plant and equipment (Notes 3 and 9) | 120 | 634 | 104 | |||||||||
Inventories and supplies (Notes 3 and 17) | 108 | 389 | 242 | |||||||||
Investments in associates and joint ventures (Notes 3 and 10) | 78 | — | 282 | |||||||||
Prepayments and others (Notes 3 and 18) | 55 | 1,324 | 23 | |||||||||
2,438 | 5,061 | 4,180 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Interest income on other loans and receivables | 1,134 | 1,406 | 1,545 | |||||||||
Interest income on fair value through profit or loss | 37 | 86 | 58 | |||||||||
Interest income on held-to-maturity investments | 29 | 47 | 65 | |||||||||
(Note 4) | 1,200 | 1,539 | 1,668 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Interest on loans and other related items (Notes 4, 20 and 28) | 6,181 | 6,008 | 5,861 | |||||||||
Accretion on financial liabilities — net (Notes 20, 21 and 28) | 1,177 | 1,062 | 956 | |||||||||
Financing charges | 50 | 177 | 61 | |||||||||
Capitalized interest (Notes 4 and 9) | (710 | ) | (691 | ) | (778 | ) | ||||||
Dividends on preferred stock subject to mandatory redemption (Note 8) | — | — | 4 | |||||||||
(Note 4) | 6,698 | 6,556 | 6,104 | |||||||||
Net gains | Total other | |||||||||||||||||||||||||||
Foreign | (losses) on | Revaluation | comprehensive | |||||||||||||||||||||||||
currency | available-for- | Net transactions | increment on | income | Total other | |||||||||||||||||||||||
translation | sale financial | on cash flow | investment | attributable to | comprehensive | |||||||||||||||||||||||
differences of | assets | hedges | properties | equity holders | Non-controlling | income (loss) | ||||||||||||||||||||||
subsidiaries | – net of tax | – net of tax | – net of tax | of PLDT | interests | – net of tax | ||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||
Balances as at January 1, 2008 | (1,827 | ) | 33 | 411 | — | (1,383 | ) | 115 | (1,268 | ) | ||||||||||||||||||
Other comprehensive income for the year | 1,425 | (9 | ) | (411 | ) | — | 1,005 | 65 | 1,070 | |||||||||||||||||||
Balances as at December 31, 2008 | (402 | ) | 24 | — | — | (378 | ) | 180 | (198 | ) | ||||||||||||||||||
Balances as at January 1, 2009 | (402 | ) | 24 | — | — | (378 | ) | 180 | (198 | ) | ||||||||||||||||||
Other comprehensive income for the year | (642 | ) | 3 | — | — | (639 | ) | (15 | ) | (654 | ) | |||||||||||||||||
Balances as at December 31, 2009 | (1,044 | ) | 27 | — | — | (1,017 | ) | 165 | (852 | ) | ||||||||||||||||||
Balances as at January 1, 2010 | (1,044 | ) | 27 | — | — | (1,017 | ) | 165 | (852 | ) | ||||||||||||||||||
Other comprehensive income for the year | (595 | ) | 22 | — | 314 | (259 | ) | (166 | ) | (425 | ) | |||||||||||||||||
Balances as at December 31, 2010 | (1,639 | ) | 49 | — | 314 | (1,276 | ) | (1 | ) | (1,277 | ) | |||||||||||||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets (Notes 3 and 4) | 6,110 | 7,721 | ||||||
Net deferred income tax liabilities (Notes 3 and 4) | (1,099 | ) | (1,321 | ) | ||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets: | ||||||||
Unearned revenues | 2,586 | 3,412 | ||||||
Unamortized past service pension costs | 2,548 | 2,974 | ||||||
Accumulated provision for doubtful accounts | 2,488 | 2,708 | ||||||
Derivative financial instruments | 1,028 | 825 | ||||||
Unrealized foreign exchange losses | 924 | 1,291 | ||||||
MCIT | 446 | 21 | ||||||
Provision for impaired assets | 379 | 767 | ||||||
Accumulated write-down of inventories to net realizable values | 289 | 293 | ||||||
NOLCO | 119 | 44 | ||||||
Asset impairment | 27 | 24 | ||||||
Capitalized taxes and duties — net of amortization | (186 | ) | (246 | ) | ||||
Capitalized foreign exchange differential — net of depreciation | (363 | ) | (495 | ) | ||||
Pension and other employee benefits | (1,361 | ) | (891 | ) | ||||
Undepreciated capitalized interest charges | (2,685 | ) | (2,976 | ) | ||||
Others | (129 | ) | (30 | ) | ||||
6,110 | 7,721 | |||||||
Net deferred income tax liabilities: | ||||||||
Unearned revenues | 668 | 1,047 | ||||||
Pension and other employee benefits | 35 | 100 | ||||||
Fair value adjustment on fixed assets | (303 | ) | (332 | ) | ||||
Undepreciated capitalized interest charges | (304 | ) | (536 | ) | ||||
Intangible assets and fair value adjustments on assets acquired — net of amortization | (423 | ) | (478 | ) | ||||
Unrealized foreign exchange gains | (707 | ) | (879 | ) | ||||
Others | (65 | ) | (243 | ) | ||||
(1,099 | ) | (1,321 | ) | |||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets — balance at beginning of year (Notes 3, 4 and 28) | 7,721 | 9,605 | ||||||
Net deferred income tax liabilities — balance at beginning of year (Notes 3, 4 and 28) | (1,321 | ) | (1,288 | ) | ||||
Net balance at beginning of year | 6,400 | 8,317 | ||||||
Provision for deferred income tax (Note 3) | (1,198 | ) | (656 | ) | ||||
Movement charged directly to equity | (139 | ) | — | |||||
Business combinations (Note 13) | — | (349 | ) | |||||
Excess MCIT deducted against RCIT due | — | (766 | ) | |||||
Others | (52 | ) | (146 | ) | ||||
Net balance at end of year | 5,011 | 6,400 | ||||||
Net deferred income tax assets — balance at end of year (Notes 3, 4 and 28) | 6,110 | 7,721 | ||||||
Net deferred income tax liabilities — balance at end of year (Notes 3, 4 and 28) | (1,099 | ) | (1,321 | ) | ||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Deferred income tax assets: | ||||||||
Deferred income tax assets to be recovered after 12 months | 8,789 | 9,565 | ||||||
Deferred income tax assets to be recovered within 12 months | 2,222 | 3,605 | ||||||
11,011 | 13,170 | |||||||
Deferred income tax liabilities: | ||||||||
Deferred income tax liabilities to be settled after 12 months | (4,240 | ) | (4,793 | ) | ||||
Deferred income tax liabilities to be settled within 12 months | (661 | ) | (656 | ) | ||||
(4,901 | ) | (5,449 | ) | |||||
Net deferred income tax assets (Notes 3, 4 and 28) | 6,110 | 7,721 | ||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Deferred income tax assets: | ||||||||
Deferred income tax assets to be recovered after 12 months | 690 | 1,161 | ||||||
Deferred income tax assets to be recovered within 12 months | 72 | 20 | ||||||
762 | 1,181 | |||||||
Deferred income tax liabilities: | ||||||||
Deferred income tax liabilities to be settled after 12 months | (1,746 | ) | (2,289 | ) | ||||
Deferred income tax liabilities to be settled within 12 months | (115 | ) | (213 | ) | ||||
(1,861 | ) | (2,502 | ) | |||||
Net deferred income tax liabilities (Notes 3, 4 and 28) | (1,099 | ) | (1,321 | ) | ||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Current | 12,228 | 14,088 | 16,358 | |||||||||
Deferred (Note 3) | 1,198 | 656 | 2,715 | |||||||||
13,426 | 14,744 | 19,073 | ||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Provision for income tax at the applicable statutory tax rates | 16,105 | 16,452 | 18,917 | |||||||||
Tax effects of: | ||||||||||||
Losses (income) subject to lower tax rate | 450 | (443 | ) | 1,408 | ||||||||
Nondeductible expenses | 442 | 201 | 724 | |||||||||
Income not subject to income tax | (324 | ) | (1,483 | ) | (846 | ) | ||||||
Income subject to final tax | (404 | ) | (502 | ) | (616 | ) | ||||||
Equity share in net losses (earnings) of associates and joint ventures | (423 | ) | (1 | ) | 62 | |||||||
Net movement in unrecognized deferred income tax assets and other adjustments | (661 | ) | 3,830 | (576 | ) | |||||||
Difference between OSD and itemized deductions | (1,759 | ) | (3,310 | ) | — | |||||||
Others | — | — | — | |||||||||
Actual provision for corporate income tax | 13,426 | 14,744 | 19,073 | |||||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
NOLCO | 2,292 | 2,341 | ||||||
Accumulated provision for doubtful accounts | 1,257 | 894 | ||||||
Unearned revenues | 712 | 188 | ||||||
Provisions for other assets | 170 | 163 | ||||||
Accumulated write-down of inventories to net realizable values | 155 | 261 | ||||||
Fixed asset impairment | 112 | 111 | ||||||
Pension and other employee benefits | 60 | 44 | ||||||
MCIT | 36 | 19 | ||||||
Unrealized foreign exchange losses | 29 | 33 | ||||||
Derivative financial instruments | 11 | 19 | ||||||
Operating lease and others | 6 | 3 | ||||||
4,840 | 4,076 | |||||||
Unrecognized deferred income tax assets (Note 3) | 1,477 | 1,236 | ||||||
Date Incurred | Expiry Date | MCIT | NOLCO | |||||||
(in million pesos) | ||||||||||
December 31, 2008 | December 31, 2011 | 5 | 622 | |||||||
December 31, 2009 | December 31, 2012 | 10 | 970 | |||||||
December 31, 2010 | December 31, 2013 | 467 | 1,096 | |||||||
482 | 2,688 | |||||||||
Consolidated tax benefits | 482 | 806 | ||||||||
Consolidated unrecognized deferred income tax assets | (36 | ) | (687 | ) | ||||||
Consolidated recognized deferred income tax assets | 446 | 119 | ||||||||
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2010 | 2009 | 2008 | ||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Consolidated net income for the year attributable to equity holders of PLDT (Note 4) | 40,217 | 40,217 | 39,781 | 39,781 | 34,317 | 34,317 | ||||||||||||||||||
Dividends on preferred shares (Note 19) | (458 | ) | (458 | ) | (457 | ) | (457 | ) | (455 | ) | (455 | ) | ||||||||||||
Consolidated net income for the year attributable to common equity holders of PLDT | 39,759 | 39,759 | 39,324 | 39,324 | 33,862 | 33,862 | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||||||
Outstanding common shares at beginning of year | 186,797 | 186,797 | 187,484 | 187,484 | 188,741 | 188,741 | ||||||||||||||||||
Effect of issuance of common shares during the year (Note 19) | — | — | 15 | 15 | 542 | 542 | ||||||||||||||||||
Average incremental number of shares under executive stock option plan, or ESOP, during the year | — | — | — | 21 | — | 13 | ||||||||||||||||||
Effect of purchase of treasury stock during the year (Note 19) | (7 | ) | (7 | ) | (583 | ) | (583 | ) | (1,120 | ) | (1,120 | ) | ||||||||||||
Weighted average number of common shares for the year | 186,790 | 186,790 | 186,916 | 186,937 | 188,163 | 188,176 | ||||||||||||||||||
Earnings per share for the year attributable to common equity holders of PLDT | Php | 212.85 | Php | 212.85 | Php | 210.38 | Php | 210.36 | Php | 179.96 | Php | 179.95 | ||||||||||||
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Vehicles, | ||||||||||||||||||||||||||||||||||||||||
furniture and | Information | |||||||||||||||||||||||||||||||||||||||
Cable and | Central | Buildings | other | origination and | Land and | Property | ||||||||||||||||||||||||||||||||||
wire | office | Cellular | and | network | Communications | termination | land | under | ||||||||||||||||||||||||||||||||
facilities | equipment | facilities | improvements | equipment | satellite | equipment | improvements | construction | Total | |||||||||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||||||||||
As at December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||
Cost | 115,980 | 83,562 | 76,229 | 21,040 | 34,816 | 9,581 | 8,251 | 2,527 | 25,234 | 377,220 | ||||||||||||||||||||||||||||||
Accumulated depreciation, impairment and amortization | (58,380 | ) | (62,644 | ) | (43,419 | ) | (8,173 | ) | (28,742 | ) | (8,675 | ) | (6,588 | ) | (273 | ) | — | (216,894 | ) | |||||||||||||||||||||
Net book value | 57,600 | 20,918 | 32,810 | 12,867 | 6,074 | 906 | 1,663 | 2,254 | 25,234 | 160,326 | ||||||||||||||||||||||||||||||
Year Ended December 31, 2009 | ||||||||||||||||||||||||||||||||||||||||
Net book value at beginning of year | 57,600 | 20,918 | 32,810 | 12,867 | 6,074 | 906 | 1,663 | 2,254 | 25,234 | 160,326 | ||||||||||||||||||||||||||||||
Additions | 1,834 | 513 | 4,040 | 316 | 1,970 | 149 | 225 | 67 | 19,091 | 28,205 | ||||||||||||||||||||||||||||||
Disposals/Retirements | (530 | ) | (6 | ) | (843 | ) | (6 | ) | (107 | ) | (463 | ) | (3 | ) | (5 | ) | (1,228 | ) | (3,191 | ) | ||||||||||||||||||||
Translation differences charged directly to cumulative translation adjustments | 3 | (2 | ) | — | (10 | ) | (13 | ) | (47 | ) | — | — | — | (69 | ) | |||||||||||||||||||||||||
Acquisition through business combinations (Note 13) | 1,348 | 194 | 141 | 186 | 104 | — | 420 | 105 | (10 | ) | 2,488 | |||||||||||||||||||||||||||||
Impairment losses recognized during the year (Notes 3, 4 and 5) | — | — | (96 | ) | (54 | ) | (17 | ) | — | (418 | ) | (49 | ) | — | (634 | ) | ||||||||||||||||||||||||
Reclassifications/Transfers (Note 12) | 6,949 | 2,776 | 8,404 | 326 | 386 | — | 110 | (184 | ) | (19,029 | ) | (262 | ) | |||||||||||||||||||||||||||
Depreciation and amortization (Notes 3 and 4) | (8,793 | ) | (3,381 | ) | (9,013 | ) | (1,151 | ) | (2,176 | ) | (545 | ) | (542 | ) | (6 | ) | — | (25,607 | ) | |||||||||||||||||||||
Net book value at end of year (Note 3) | 58,411 | 21,012 | 35,443 | 12,474 | 6,221 | — | 1,455 | 2,182 | 24,058 | 161,256 | ||||||||||||||||||||||||||||||
As at December 31, 2009 | ||||||||||||||||||||||||||||||||||||||||
Cost | 126,327 | 87,517 | 83,451 | 21,693 | 35,282 | 966 | 8,940 | 2,458 | 24,058 | 390,692 | ||||||||||||||||||||||||||||||
Accumulated depreciation, impairment and amortization | (67,916 | ) | (66,505 | ) | (48,008 | ) | (9,219 | ) | (29,061 | ) | (966 | ) | (7,485 | ) | (276 | ) | — | (229,436 | ) | |||||||||||||||||||||
Net book value (Note 3) | 58,411 | 21,012 | 35,443 | 12,474 | 6,221 | — | 1,455 | 2,182 | 24,058 | 161,256 | ||||||||||||||||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Net book value at beginning of year (Note 3) | 58,411 | 21,012 | 35,443 | 12,474 | 6,221 | — | 1,455 | 2,182 | 24,058 | 161,256 | ||||||||||||||||||||||||||||||
Additions | 1,494 | 245 | 2,336 | 228 | 2,045 | — | 184 | — | 22,284 | 28,816 | ||||||||||||||||||||||||||||||
Disposals/Retirements | (10 | ) | (60 | ) | (59 | ) | (286 | ) | (67 | ) | — | — | — | (2 | ) | (484 | ) | |||||||||||||||||||||||
Translation differences charged directly to cumulative translation adjustments | 23 | 7 | — | (5 | ) | (59 | ) | — | — | — | (4 | ) | (38 | ) | ||||||||||||||||||||||||||
Acquisition through business combinations (Note 13) | — | — | — | — | 73 | — | — | — | — | 73 | ||||||||||||||||||||||||||||||
Impairment losses recognized during the year (Notes 3, 4 and 5) | — | (11 | ) | — | (13 | ) | (5 | ) | — | (91 | ) | — | — | (120 | ) | |||||||||||||||||||||||||
Reclassifications/Transfers (Notes 12 and 13) | 4,578 | 2,440 | 5,653 | 823 | 1,740 | — | 104 | (54 | ) | (15,326 | ) | (42 | ) | |||||||||||||||||||||||||||
Depreciation and amortization (Notes 3 and 4) | (7,851 | ) | (3,705 | ) | (9,418 | ) | (2,004 | ) | (2,792 | ) | — | (506 | ) | (1 | ) | — | (26,277 | ) | ||||||||||||||||||||||
Net book value at end of year (Note 3) | 56,645 | 19,928 | 33,955 | 11,217 | 7,156 | — | 1,146 | 2,127 | 31,010 | 163,184 | ||||||||||||||||||||||||||||||
As at December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Cost | 132,356 | 89,992 | 90,574 | 21,873 | 38,078 | 966 | 9,136 | 2,405 | 31,010 | 416,390 | ||||||||||||||||||||||||||||||
Accumulated depreciation, impairment and amortization | (75,711 | ) | (70,064 | ) | (56,619 | ) | (10,656 | ) | (30,922 | ) | (966 | ) | (7,990 | ) | (278 | ) | — | (253,206 | ) | |||||||||||||||||||||
Net book value (Note 3) | 56,645 | 19,928 | 33,955 | 11,217 | 7,156 | — | 1,146 | 2,127 | 31,010 | 163,184 | ||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Interest (Note 5) | 710 | 691 | 778 | |||||||||
Foreign exchange losses (gains) — net | — | (119 | ) | 385 | ||||||||
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Cable and wire facilities | 10 – 15 years | |||
Central office equipment | 10 – 20 years | |||
Cellular facilities | 3 – 10 years | |||
Buildings | 25 years | |||
Vehicles, furniture and other network equipment | 3 – 5 years | |||
Information origination and termination equipment | 3 – 15 years | |||
Land and land improvements | 10 years |
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Carrying Value of Investments in Associates: | ||||||||
Meralco | 6,733 | 21,420 | ||||||
Philweb Corporation, or Philweb | 878 | 750 | ||||||
ACeS International Limited, or AIL | — | — | ||||||
7,611 | 22,170 | |||||||
Carrying Value of Investments in Joint Ventures: | ||||||||
Beacon | 15,438 | — | ||||||
Mobile Payment Solutions Pte. Ltd., or MPSPL | 104 | — | ||||||
ePDS, Inc., or ePDS | 50 | 43 | ||||||
PLDT Italy S.r.l., or PLDT Italy | — | 20 | ||||||
15,592 | 63 | |||||||
Total carrying value of investments in associates and joint ventures (Note 28) | 23,203 | 22,233 | ||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 24,170 | 4,346 | ||||||
Additions during the year (including transfer of interests in Meralco to Beacon) | 15,245 | 21,555 | ||||||
Disposal during the year (including transfer of interests in Meralco to Beacon) | (14,767 | ) | — | |||||
Business combinations (Note 13) | — | (821 | ) | |||||
Dissolution of Mabuhay Space Holdings Limited, or MSHL | — | (887 | ) | |||||
Translation and other adjustments | (12 | ) | (23 | ) | ||||
Balance at end of year | 24,636 | 24,170 | ||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 1,906 | 2,903 | ||||||
Impairment for the year (Notes 3, 4 and 5) | 78 | — | ||||||
Dissolution of MSHL | — | (887 | ) | |||||
Translation and other adjustments | (10 | ) | (110 | ) | ||||
Balance at end of year | 1,974 | 1,906 | ||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | (31 | ) | (269 | ) | ||||
Equity share in net earnings (losses) of associates and joint ventures for the year (Note 4): | 1,408 | 2 | ||||||
Meralco | 874 | 398 | ||||||
Beacon | 354 | — | ||||||
Philweb | 161 | 152 | ||||||
ePDS | 26 | 21 | ||||||
SHI | (7 | ) | — | |||||
BayanTrade | — | (5 | ) | |||||
PLDT Italy | — | (98 | ) | |||||
BOW | — | (466 | ) | |||||
Disposals | (316 | ) | — | |||||
Dividends | (530 | ) | (357 | ) | ||||
Translation and other adjustments | 10 | 593 | ||||||
Balance at end of year | 541 | (31 | ) | |||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Statements of Financial Position: | ||||||||
Noncurrent assets | 131,812 | 128,954 | ||||||
Current assets | 57,058 | 46,098 | ||||||
Equity | 60,983 | 52,411 | ||||||
Noncurrent liabilities | 79,501 | 78,949 | ||||||
Current liabilities | 48,386 | 43,692 | ||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Income Statements: | ||||||||||||
Revenues | 246,807 | 186,227 | 572 | |||||||||
Expenses | 229,145 | 178,018 | 359 | |||||||||
Other expenses | 1,242 | 1,966 | 76 | |||||||||
Net income | 10,834 | 6,634 | 290 | |||||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Statements of Financial Position: | ||||||||
Noncurrent assets | 130,423 | 127,444 | ||||||
Current assets | 54,831 | 44,685 | ||||||
Equity | 68,339 | 61,146 | ||||||
Noncurrent liabilities | 72,552 | 68,860 | ||||||
Current liabilities | 44,363 | 42,123 | ||||||
Income Statements: | ||||||||
Revenues | 245,461 | 184,872 | ||||||
Expenses | 228,288 | 173,927 | ||||||
Other expenses | 1,281 | 1,966 | ||||||
Net income | 10,117 | 6,005 | ||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Statements of Financial Position: | ||||||||
Noncurrent assets | 73,366 | 103 | ||||||
Current assets | 1,807 | 244 | ||||||
Equity | 55,047 | 57 | ||||||
Noncurrent liabilities | 16,037 | 88 | ||||||
Current liabilities | 4,089 | 202 | ||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Income Statements: | ||||||||||||
Revenues | 2,884 | 387 | 175 | |||||||||
Expenses | 297 | 527 | 387 | |||||||||
Other expenses | 1,503 | 3 | 2 | |||||||||
Net income | 1,065 | 154 | 223 | |||||||||
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(in million pesos) | ||||
Statement of Financial Position: | ||||
Noncurrent assets | 73,322 | |||
Current assets | 1,658 | |||
Equity | 54,956 | |||
Noncurrent liabilities | 16,027 | |||
Current liabilities | 3,997 | |||
Income Statements: | ||||
Equity share in net income of Meralco | 2,655 | |||
Expenses | 78 | |||
Other expenses | 1,501 | |||
Net income | 1,077 | |||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
National Power Corporation, or NAPOCOR, Zero Coupon Bond | 334 | 312 | ||||||
Rizal Commercial Banking Corporation, or RCBC, Note | 150 | 150 | ||||||
Noncurrent portion of investment in debt securities (Note 28) | 484 | 462 | ||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 1,210 | 617 | ||||||
Transfers from property, plant and equipment (Note 9) | 491 | 262 | ||||||
Net gains from fair value adjustments charged to profit or loss(1) (Note 3) | 6 | 352 | ||||||
Disposals | (147 | ) | (21 | ) | ||||
Balance at end of year (Notes 3 and 28) | 1,560 | 1,210 | ||||||
(1) Presented as part of “Other income” in our consolidated income statement. |
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(in million pesos) | ||||
Assets: | ||||
Property, plant and equipment | 1,851 | |||
Available-for-sale financial assets | 5 | |||
Deferred income tax assets — net | 3 | |||
Cash and cash equivalents | 51 | |||
Trade and other receivables | 204 | |||
Inventories and supplies — net | 15 | |||
Prepayments | 8 | |||
2,137 | ||||
Liabilities: | ||||
Long-term debt | 340 | |||
Deferred income tax liabilities — net | 381 | |||
Pension and other employee benefits | 13 | |||
Accounts payable | 1,206 | |||
Accrued expenses and other current liabilities | 77 | |||
Dividends payable | 2 | |||
Income tax payable | 3 | |||
2,022 | ||||
115 | ||||
Non-controlling interests | 40 | |||
Net assets acquired | 75 | |||
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Fair Value | ||||||||
Previous Carrying | Recognized on | |||||||
Value | Acquisition | |||||||
(in million pesos) | ||||||||
Assets: | ||||||||
Property, plant and equipment | 21 | 21 | ||||||
Goodwill (Note 14) | 184 | 216 | ||||||
Deferred income tax assets — net | 19 | 19 | ||||||
Advances and refundable deposits | 11 | 7 | ||||||
Cash and cash equivalents | 6 | 6 | ||||||
Trade and other receivables | 179 | 156 | ||||||
Prepayments and other current assets | 6 | — | ||||||
426 | 425 | |||||||
Liabilities: | ||||||||
Long-term debt | 150 | 150 | ||||||
Pension and other employee benefits | 5 | 5 | ||||||
Other noncurrent liabilities | 59 | 16 | ||||||
Accounts payable | 85 | 121 | ||||||
Accrued expenses and other current liabilities | 75 | 82 | ||||||
374 | 374 | |||||||
52 | 51 | |||||||
Non-controlling interests | (9 | ) | (10 | ) | ||||
Net assets acquired | 61 | 61 | ||||||
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In U.S. Dollar | In Php(1) | |||||||
(in millions) | ||||||||
Assets: | ||||||||
Property, plant and equipment | 12 | 558 | ||||||
Goodwill (Note 14) | 1 | 45 | ||||||
Intangible assets (Note 14) | 5 | 221 | ||||||
Advances and refundable deposits | — | 7 | ||||||
Cash and cash equivalents | 5 | 231 | ||||||
Trade and other receivables | — | 33 | ||||||
Prepayments | — | 31 | ||||||
23 | 1,126 | |||||||
Liabilities: | ||||||||
Long-term debt | 4 | 203 | ||||||
Accrued expenses and other current liabilities | 2 | 106 | ||||||
6 | 309 | |||||||
17 | 817 | |||||||
Non-controlling interests | 8 | 378 | ||||||
Net assets acquired | 9 | 439 | ||||||
(1) Converted to Philippine Peso using the exchange rate at the time of purchase of Php48.07 to US$1.00. |
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Fair Value Recognized on | ||||||||||||||||
Previous Carrying Value | Acquisition | |||||||||||||||
In U.S. Dollar | In Php(1) | In U.S. Dollar | In Php(1) | |||||||||||||
(in millions) | ||||||||||||||||
Assets: | ||||||||||||||||
Property, plant and equipment | — | 8 | — | 8 | ||||||||||||
Goodwill (Note 14) | 10 | 494 | 10 | 463 | ||||||||||||
Intangible assets (Note 14) | — | — | 2 | 73 | ||||||||||||
Deferred income tax assets — net | 1 | 10 | — | 3 | ||||||||||||
Cash and cash equivalents | 1 | 26 | 1 | 26 | ||||||||||||
Trade and other receivables | 1 | 59 | 1 | 53 | ||||||||||||
Other current assets | — | — | — | 15 | ||||||||||||
13 | 597 | 14 | 641 | |||||||||||||
Liabilities: | ||||||||||||||||
Accounts payable | — | — | — | 4 | ||||||||||||
Accrued expenses and other current liabilities | 1 | 27 | 1 | 24 | ||||||||||||
Deferred income tax liabilities — net | — | — | 1 | 26 | ||||||||||||
Other current liabilities | — | — | — | 8 | ||||||||||||
1 | 27 | 2 | 62 | |||||||||||||
Net assets acquired | 12 | 570 | 12 | 579 | ||||||||||||
(1) Converted to Philippine Peso using the exchange rate at the time of purchase of Php47.42 to US$1.00. |
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Fair Value | ||||||||
Previous Carrying | Recognized on | |||||||
Value | Acquisition | |||||||
(in million pesos) | ||||||||
Assets: | ||||||||
Property, plant and equipment | 42 | 115 | ||||||
Goodwill (Note 14) | 1,597 | 1,530 | ||||||
Intangible assets (Note 14) | — | 23 | ||||||
Prepayments | 10 | 10 | ||||||
Advances and refundable deposits — net of current portion | 8 | 8 | ||||||
Cash and cash equivalents | 12 | 12 | ||||||
Trade and other receivables | 42 | 42 | ||||||
Current portion of advances and refundable deposits | 6 | 6 | ||||||
1,717 | 1,746 | |||||||
Liabilities: | ||||||||
Deferred income tax liabilities — net | — | 29 | ||||||
Accounts payable | 30 | 30 | ||||||
Accrued expenses and other current liabilities | 116 | 116 | ||||||
Income tax payable | 2 | 2 | ||||||
148 | 177 | |||||||
Net assets acquired | 1,569 | 1,569 | ||||||
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Fair Value | ||||||||
Previous Carrying | Recognized on | |||||||
Value | Acquisition | |||||||
(in million pesos) | ||||||||
Assets: | ||||||||
Property, plant and equipment | 8 | 8 | ||||||
Goodwill (Note 14) | 561 | 469 | ||||||
Intangible assets (Note 14) | 27 | 159 | ||||||
Advances and refundable deposits — net of current portion | 1 | 1 | ||||||
Cash and cash equivalents | 89 | 89 | ||||||
Trade and other receivables | 51 | 51 | ||||||
Current portion of advances and refundable deposits | 19 | 19 | ||||||
756 | 796 | |||||||
Liabilities: | ||||||||
Deferred income tax liabilities — net | — | 40 | ||||||
Accounts payable | 8 | 8 | ||||||
Accrued expenses and other current liabilities | 105 | 105 | ||||||
Accrued retirement benefits | 12 | 12 | ||||||
Income tax payable | 2 | 2 | ||||||
127 | 167 | |||||||
Net assets acquired | 629 | 629 | ||||||
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Total | ||||||||||||||||||||||||||||||||
Intangible Assets | Goodwill | |||||||||||||||||||||||||||||||
Total | and | |||||||||||||||||||||||||||||||
Customer | Technology | Intangible | Intangible | |||||||||||||||||||||||||||||
List | Spectrum | Licenses | Application | Trademark | Assets | Goodwill | Assets | |||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||||||||||||||
Costs: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 1,655 | 1,205 | 613 | 967 | 27 | 4,467 | 15,201 | 19,668 | ||||||||||||||||||||||||
Additions | 19 | — | 19 | 4 | 1 | 43 | — | 43 | ||||||||||||||||||||||||
Translation and other adjustments (Note 13) | (42 | ) | — | (78 | ) | 22 | 131 | 33 | (468 | ) | (435 | ) | ||||||||||||||||||||
Balance at end of year | 1,632 | 1,205 | 554 | 993 | 159 | 4,543 | 14,733 | 19,276 | ||||||||||||||||||||||||
Accumulated amortization and impairment: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 995 | 428 | 448 | 964 | — | 2,835 | 3,809 | 6,644 | ||||||||||||||||||||||||
Impairment during the year (Notes 4 and 5) | 56 | — | 18 | — | — | 74 | 1,169 | 1,243 | ||||||||||||||||||||||||
Amortization during the year (Note 3) | 219 | 81 | 36 | 11 | 41 | 388 | — | 388 | ||||||||||||||||||||||||
Translation and other adjustments (Note 13) | (58 | ) | — | (76 | ) | 2 | — | (132 | ) | (352 | ) | (484 | ) | |||||||||||||||||||
Balance at end of year | 1,212 | 509 | 426 | 977 | 41 | 3,165 | 4,626 | 7,791 | ||||||||||||||||||||||||
Net balance at end of year(Notes 3 and 28) | 420 | 696 | 128 | 16 | 118 | 1,378 | 10,107 | 11,485 | ||||||||||||||||||||||||
Estimated useful lives (in years) | 1 — 8 | 15 | 2 — 18 | 3 — 5 | 1 — 10 | — | — | — | ||||||||||||||||||||||||
Remaining useful lives (in years) | 1 — 7 | 9 | 1 — 12 | 2 — 4 | 9 | — | — | — | ||||||||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||||||||||
Costs: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 1,696 | 1,205 | 370 | 894 | — | 4,165 | 12,289 | 16,454 | ||||||||||||||||||||||||
Business combinations (Notes 3, 13 and 21) | — | — | 221 | — | 27 | 248 | 3,013 | 3,261 | ||||||||||||||||||||||||
Translation and other adjustments (Note 13) | (41 | ) | — | 22 | 73 | — | 54 | (101 | ) | (47 | ) | |||||||||||||||||||||
Balance at end of year | 1,655 | 1,205 | 613 | 967 | 27 | 4,467 | 15,201 | 19,668 | ||||||||||||||||||||||||
Accumulated amortization and impairment: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 794 | 348 | 203 | 860 | — | 2,205 | 3,799 | 6,004 | ||||||||||||||||||||||||
Impairment during the year | — | — | 213 | 73 | — | 286 | 93 | 379 | ||||||||||||||||||||||||
Amortization during the year (Note 3) | 220 | 80 | 37 | 31 | — | 368 | — | 368 | ||||||||||||||||||||||||
Translation and other adjustments | (19 | ) | — | (5 | ) | — | — | (24 | ) | (83 | ) | (107 | ) | |||||||||||||||||||
Balance at end of year | 995 | 428 | 448 | 964 | — | 2,835 | 3,809 | 6,644 | ||||||||||||||||||||||||
Net balance at end of year(Notes 3 and 28) | 660 | 777 | 165 | 3 | 27 | 1,632 | 11,392 | 13,024 | ||||||||||||||||||||||||
Estimated useful lives (in years) | 1 — 7 | 15 | 3 — 18 | 4 — 5 | 6 | — | — | — | ||||||||||||||||||||||||
Remaining useful lives (in years) | 1 — 4 | 10 | 2 — 13 | 1 | 6 | — | — | — | ||||||||||||||||||||||||
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Year | (in million pesos) | |||
2011 | 274 | |||
2012 | 260 | |||
2013 | 208 | |||
2014 | 123 | |||
2015 and onwards | 513 | |||
Balance at end of year | 1,378 | |||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Cash on hand and in banks (Note 28) | 2,906 | 3,300 | ||||||
Temporary cash investments (Note 28) | 33,772 | 35,019 | ||||||
36,678 | 38,319 | |||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Retail subscribers (Note 28) | 8,917 | 8,026 | ||||||
Corporate subscribers (Notes 24 and 28) | 7,998 | 9,106 | ||||||
Foreign administrations (Note 28) | 4,479 | 4,353 | ||||||
Domestic carriers (Notes 24 and 28) | 1,591 | 1,267 | ||||||
Dealers, agents and others (Notes 18, 24 and 28) | 5,273 | 3,927 | ||||||
28,258 | 26,679 | |||||||
Less allowance for doubtful accounts (Notes 3, 5 and 28) | 11,830 | 11,950 | ||||||
(Notes 3, 5 and 28) | 16,428 | 14,729 | ||||||
Dealers, | ||||||||||||||||||||||||
Corporate | Domestic | Agents and | ||||||||||||||||||||||
Total | Subscribers | Retail Subscribers | Foreign Administrations | Carriers | Others | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||||||
Balance at beginning of year | 11,950 | 6,677 | 4,480 | 289 | 83 | 421 | ||||||||||||||||||
Provisions for the year (Notes 3, 4 and 5) | 834 | 152 | 493 | — | 64 | 125 | ||||||||||||||||||
Write-offs | (932 | ) | (562 | ) | (284 | ) | (5 | ) | — | (81 | ) | |||||||||||||
Translation and other adjustments | (22 | ) | (311 | ) | 356 | (126 | ) | (9 | ) | 68 | ||||||||||||||
Balance at end of year | 11,830 | 5,956 | 5,045 | 158 | 138 | 533 | ||||||||||||||||||
Individual impairment | 8,861 | 5,413 | 2,745 | 158 | 138 | 407 | ||||||||||||||||||
Collective impairment | 2,969 | 543 | 2,300 | — | — | 126 | ||||||||||||||||||
11,830 | 5,956 | 5,045 | 158 | 138 | 533 | |||||||||||||||||||
Gross amount of receivables individually impaired, before deducting any impairment allowance | 8,861 | 5,413 | 2,745 | 158 | 138 | 407 | ||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Balance at beginning of year | 12,336 | 6,323 | 5,089 | 439 | 174 | 311 | ||||||||||||||||||
Provisions for the year (Notes 3, 4 and 5) | 2,335 | 670 | 1,512 | 18 | 35 | 100 | ||||||||||||||||||
Business combinations (Note 13) | 513 | 36 | 454 | — | — | 23 | ||||||||||||||||||
Write-offs | (22 | ) | (1,178 | ) | (1,657 | ) | (216 | ) | (157 | ) | (4 | ) | ||||||||||||
Translation and other adjustments | (3,212 | ) | 826 | (918 | ) | 48 | 31 | (9 | ) | |||||||||||||||
Balance at end of year | 11,950 | 6,677 | 4,480 | 289 | 83 | 421 | ||||||||||||||||||
Individual impairment | 9,624 | 6,256 | 2,595 | 289 | 83 | 401 | ||||||||||||||||||
Collective impairment | 2,326 | 421 | 1,885 | — | — | 20 | ||||||||||||||||||
11,950 | 6,677 | 4,480 | 289 | 83 | 421 | |||||||||||||||||||
Gross amount of receivables individually impaired, before deducting any impairment allowance | 9,624 | 6,256 | 2,595 | 289 | 83 | 401 | ||||||||||||||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Spare parts and supplies: | ||||||||
At net realizable value | 1,152 | 982 | ||||||
At cost | 2,163 | 1,998 | ||||||
Terminal and cellular phone units: | ||||||||
At net realizable value | 737 | 652 | ||||||
At cost | 918 | 981 | ||||||
Others: | ||||||||
At net realizable value | 330 | 531 | ||||||
At cost | 333 | 534 | ||||||
Total inventories and supplies at the lower of cost or net realizable value (Notes 3, 4, 5 and 28) | 2,219 | 2,165 | ||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Cost of sales | 3,517 | 4,714 | 4,380 | |||||||||
Repairs and maintenance | 357 | 429 | 549 | |||||||||
Write-down of inventories and supplies (Notes 3, 4 and 5) | 108 | 389 | 242 | |||||||||
3,982 | 5,532 | 5,171 | ||||||||||
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Prepaid taxes | 7,476 | 7,768 | ||||||
Prepaid benefit costs (Notes 3 and 25) | 5,333 | 5,414 | ||||||
Prepaid selling and promotions | 1,011 | 102 | ||||||
Prepaid insurance (Note 24) | 122 | 109 | ||||||
Prepaid rent — net (Notes 3 and 5) | 53 | 208 | ||||||
Prepaid fees and licenses | 40 | 44 | ||||||
Other prepayments | 62 | 116 | ||||||
14,097 | 13,761 | |||||||
Less current portion of prepayments (Note 28) | 5,418 | 5,098 | ||||||
Noncurrent portion of prepayments (Note 28) | 8,679 | 8,663 | ||||||
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Preferred Stock – | ||||||||||||||||||||||||
Php10 par value per share | ||||||||||||||||||||||||
Total | ||||||||||||||||||||||||
Series | Preferred | Common Stock – | ||||||||||||||||||||||
A to HH | IV | Stock | Php5 par value per share | |||||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Authorized | 823 | Php | 8,230 | 234 | Php | 1,170 | ||||||||||||||||||
Issued | ||||||||||||||||||||||||
Balances as at January 1, 2008 | 405 | 36 | 441 | Php | 4,417 | 188 | Php | 943 | ||||||||||||||||
Issuance | — | — | — | 1 | — | 1 | ||||||||||||||||||
Conversion | — | — | — | (3 | ) | 1 | 3 | |||||||||||||||||
Balances as at December 31, 2008 | 405 | 36 | 441 | Php | 4,415 | 189 | Php | 947 | ||||||||||||||||
Balances as at January 1, 2009 | 405 | 36 | 441 | Php | 4,415 | 189 | Php | 947 | ||||||||||||||||
Issuance | — | — | — | 2 | — | — | ||||||||||||||||||
Conversion | — | — | — | (1 | ) | — | — | |||||||||||||||||
Balances as at December 31, 2009 | 405 | 36 | 441 | Php | 4,416 | 189 | Php | 947 | ||||||||||||||||
Balances as at January 1, 2010 | 405 | 36 | 441 | Php | 4,416 | 189 | Php | 947 | ||||||||||||||||
Issuance | 1 | — | 1 | 3 | — | — | ||||||||||||||||||
Balances as at December 31, 2010 | 406 | 36 | 442 | Php | 4,419 | 189 | Php | 947 | ||||||||||||||||
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237
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common stock at a weighted average price of Php2,387 per share for a total consideration of Php6,405 million as at December 31, 2009. SeeNote 8 — Earnings Per Common ShareandNote 28 — Financial Assets and Liabilities. | ||
Dividends Declared For The Year Ended December 31, 2010 |
Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 26, 2010 | February 25, 2010 | March 31, 2010 | Php1.00 | 17 | |||||||||||||||
Series DD | January 26, 2010 | February 11, 2010 | February 26, 2010 | 1.00 | 3 | |||||||||||||||
Series EE | March 26, 2010 | April 23, 2010 | May 31, 2010 | 1.00 | — | |||||||||||||||
Series A, I, R, W, AA and BB | July 7, 2010 | August 5, 2010 | August 31, 2010 | 1.00 | 128 | |||||||||||||||
Series B, F, Q, V and Z | August 3, 2010 | September 2, 2010 | September 30, 2010 | 1.00 | 92 | |||||||||||||||
Series E, K, O and U | August 31, 2010 | September 30, 2010 | October 29, 2010 | 1.00 | 44 | |||||||||||||||
Series C, D, J, T and X | September 28, 2010 | October 28, 2010 | November 30, 2010 | 1.00 | 57 | |||||||||||||||
Series G, N, P and S | November 4, 2010 | December 2, 2010 | December 29, 2010 | 1.00 | 26 | |||||||||||||||
Series H, L, M and Y | December 7, 2010 | January 4, 2011 | January 31, 2011 | 1.00 | 42 | |||||||||||||||
409 | ||||||||||||||||||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV* | January 26, 2010 | February 19, 2010 | March 15, 2010 | Php— | 12 | |||||||||||||||
May 13, 2010 | May 27, 2010 | June 15, 2010 | — | 13 | ||||||||||||||||
August 3, 2010 | August 18, 2010 | September 15, 2010 | — | 12 | ||||||||||||||||
November 4, 2010 | November 19, 2010 | December 15, 2010 | — | 12 | ||||||||||||||||
49 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 2, 2010 | March 17, 2010 | April 20, 2010 | Php76.00 | 14,197 | |||||||||||||||
August 3, 2010 | August 19, 2010 | September 21, 2010 | 78.00 | 14,570 | ||||||||||||||||
Special Dividend | March 2, 2010 | March 17, 2010 | April 20, 2010 | 65.00 | 12,142 | |||||||||||||||
40,909 | ||||||||||||||||||||
Charged to retained earnings | 41,367 | |||||||||||||||||||
* | Dividends were declared based on total amount paid up. |
Dividends Declared For The Year Ended December 31, 2009 |
Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
Preferred Stock Subject to Mandatory Redemption | ||||||||||||||||||||
Series V | March 3, 2009 | March 19, 2009 | April 15, 2009 | Php4.675 | — | |||||||||||||||
June 9, 2009 | June 25, 2009 | July 15, 2009 | 4.675 | — | ||||||||||||||||
*August 4, 2009 | August 22, 2009 | September 10, 2009 | 0.051944 per day | — | ||||||||||||||||
Series VI | March 3, 2009 | March 19, 2009 | April 15, 2009 | US$0.09925 | — | |||||||||||||||
June 9, 2009 | June 25, 2009 | July 15, 2009 | 0.09925 | — | ||||||||||||||||
August 25, 2009 | September 24, 2009 | October 15, 2009 | 0.09925 | — | ||||||||||||||||
**November 3, 2009 | November 8, 2009 | December 8, 2009 | Php0.001103 per day | — | ||||||||||||||||
Charged to income | — | |||||||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 27, 2009 | February 26, 2009 | March 31, 2009 | Php1.00 | 17 | |||||||||||||||
Series DD | January 27, 2009 | February 13, 2009 | February 27, 2009 | 1.00 | 3 | |||||||||||||||
Series EE | March 31, 2009 | April 30, 3009 | May 29, 2009 | 1.00 | — | |||||||||||||||
Series A, I, R, W, AA and BB | July 7, 2009 | August 6, 2009 | August 28, 2009 | 1.00 | 128 | |||||||||||||||
Series B, F, Q, V and Z | August 4, 2009 | September 1, 2009 | September 30, 2009 | 1.00 | 91 | |||||||||||||||
Series E, K, O and U | August 25, 2009 | September 24, 2009 | October 30, 2009 | 1.00 | 44 | |||||||||||||||
Series C, D, J, T and X | September 29, 2009 | October 29, 2009 | November 26, 2009 | 1.00 | 57 | |||||||||||||||
Series G, N, P, and S | November 3, 2009 | December 3, 2009 | December 29, 2009 | 1.00 | 26 | |||||||||||||||
Series H, L, M and Y | December 8, 2009 | January 4, 2010 | January 29, 2010 | 1.00 | 40 | |||||||||||||||
406 | ||||||||||||||||||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV*** | January 27, 2009 | February 20, 2009 | March 15, 2009 | Php— | 12 | |||||||||||||||
May 5, 2009 | May 22, 2009 | June 15, 2009 | — | 13 | ||||||||||||||||
August 4, 2009 | August 19, 2009 | September 15, 2009 | — | 13 | ||||||||||||||||
November 3, 2009 | November 20, 2009 | December 15, 2009 | — | 12 | ||||||||||||||||
50 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 3, 2009 | March 18, 2009 | April 21, 2009 | Php70.00 | 13,124 | |||||||||||||||
August 4, 2009 | August 20, 2009 | September 22, 2009 | 77.00 | 14,384 | ||||||||||||||||
Special Dividend | March 3, 2009 | March 18, 2009 | April 21, 2009 | 60.00 | 11,250 | |||||||||||||||
38,758 | ||||||||||||||||||||
Charged to retained earnings | 39,214 | |||||||||||||||||||
* | Only the holders of Series V Convertible Preferred Stock whose shares were originally issued on August 22, 2002 and mandatorily converted on August 23, 2009 are entitled to this final dividend. | |
** | Only the holders of Series VI Convertible Preferred Stock whose shares were originally issued on November 8, 2002 and mandatorily converted on November 9, 2009 are entitled to this final dividend. | |
*** | Dividends are declared based on total amount paid up. |
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Dividends Declared For The Year Ended December 31, 2008 |
Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
Preferred Stock Subject to Mandatory Redemption | ||||||||||||||||||||
Series V | March 4, 2008 | March 20, 2008 | April 15, 2008 | Php4.675 | — | |||||||||||||||
*May 6, 2008 | June 4, 2008 | June 23, 2008 | 0.051944 per day | — | ||||||||||||||||
June 10, 2008 | June 26, 2008 | July 15, 2008 | 4.675 | — | ||||||||||||||||
August 26, 2008 | September 25, 2008 | October 15, 2008 | 4.675 | — | ||||||||||||||||
December 9, 2008 | December 24, 2008 | January 15, 2009 | 4.675 | — | ||||||||||||||||
Series VI | March 4, 2008 | March 20, 2008 | April 15, 2008 | US$0.09925 | 2 | |||||||||||||||
*May 6, 2008 | June 4, 2008 | June 23, 2008 | 0.001103 per day | 1 | ||||||||||||||||
June 10, 2008 | June 26, 2008 | July 15, 2008 | 0.09925 | — | ||||||||||||||||
August 26, 2008 | September 25, 2008 | October 15, 2008 | 0.09925 | — | ||||||||||||||||
December 9, 2008 | December 24, 2008 | January 15, 2009 | 0.09925 | — | ||||||||||||||||
Charged to income | 3 | |||||||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 29, 2008 | February 28, 2008 | March 31, 2008 | Php1.00 | 17 | |||||||||||||||
Series DD | January 29, 2008 | February 15, 2008 | February 29, 2008 | 1.00 | 3 | |||||||||||||||
Series EE | March 25, 2008 | April 24, 2008 | May 30, 2008 | 1.00 | — | |||||||||||||||
Series A, I, R, W, AA and BB | July 8, 2008 | August 1, 2008 | August 29, 2008 | 1.00 | 128 | |||||||||||||||
Series B, F, Q, V and Z | August 5, 2008 | September 3, 2008 | September 30, 2008 | 1.00 | 90 | |||||||||||||||
Series E, K, O and U | August 26, 2008 | September 25, 2008 | October 31, 2008 | 1.00 | 44 | |||||||||||||||
Series C, D, J, T and X | September 30, 2008 | October 30, 2008 | November 28, 2008 | 1.00 | 57 | |||||||||||||||
Series G, N, P and S | November 4, 2008 | December 4, 2008 | December 29, 2008 | 1.00 | 26 | |||||||||||||||
Series H, L, M and Y | December 9, 2008 | January 2, 2009 | January 30, 2009 | 1.00 | 41 | |||||||||||||||
406 | ||||||||||||||||||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV** | January 29, 2008 | February 22, 2008 | March 15, 2008 | Php— | 12 | |||||||||||||||
May 6, 2008 | May 23, 2008 | June 15, 2008 | — | 12 | ||||||||||||||||
July 8, 2008 | August 7, 2008 | September 15, 2008 | — | 13 | ||||||||||||||||
November 4, 2008 | November 21, 2008 | December 15, 2008 | — | 13 | ||||||||||||||||
50 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 4, 2008 | March 19, 2008 | April 21, 2008 | Php68.00 | 12,853 | |||||||||||||||
August 5, 2008 | August 22, 2008 | September 22, 2008 | 70.00 | 13,140 | ||||||||||||||||
Special Dividend | March 4, 2008 | March 19, 2008 | April 21, 2008 | 56.00 | 10,585 | |||||||||||||||
36,578 | ||||||||||||||||||||
Charged to retained earnings | 37,034 | |||||||||||||||||||
* | Only the holders of Series V and VI Convertible Preferred Stock whose shares were originally issued on June 4, 2001 and mandatorily converted on June 5, 2008 are entitled to these final dividends. | |
** | Dividends are declared based on total amount paid up. |
Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV* | January 25, 2011 | February 18, 2011 | March 15, 2011 | Php— | 12 | |||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 25, 2011 | February 24, 2011 | March 31, 2011 | Php1.00 | 17 | |||||||||||||||
Series DD | January 25, 2011 | February 10, 2011 | February 28, 2011 | 1.00 | 2 | |||||||||||||||
Series FF | January 25, 2011 | February 10, 2011 | February 28, 2011 | 1.00 | — | |||||||||||||||
Series GG | January 25, 2011 | February 24, 2011 | March 31, 2011 | 1.00 | — | |||||||||||||||
Series EE | March 29, 2011 | April 28, 2011 | May 31, 2011 | 1.00 | — | |||||||||||||||
Series HH | March 29, 2011 | April 28, 2011 | May 31, 2011 | 1.00 | — | |||||||||||||||
19 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 1, 2011 | March 16, 2011 | April 19, 2011 | Php78.00 | 14,567 | |||||||||||||||
Special Dividend | March 1, 2011 | March 16, 2011 | April 19, 2011 | 66.00 | 12,326 | |||||||||||||||
26,893 | ||||||||||||||||||||
26,924 | ||||||||||||||||||||
* | Dividends were declared based on total amount paid up. |
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20. | Interest-bearing Financial Liabilities |
As at December 31, 2010 and 2009, this account consists of the following: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Long-term portion of interest-bearing financial liabilities: | ||||||||
Long-term debt (Notes 4, 5, 9, 23, 26 and 28) | 75,879 | 86,066 | ||||||
Obligations under finance lease (Notes 3, 4, 5, 23, 26 and 28) | 9 | 13 | ||||||
75,888 | 86,079 | |||||||
Current portion of interest-bearing financial liabilities: | ||||||||
Long-term debt maturing within one year (Notes 4, 5, 9, 23, 26 and 28) | 13,767 | 10,384 | ||||||
Obligations under finance lease maturing within one year (Notes 3, 4, 5, 23, 26 and 28) | 34 | 51 | ||||||
Notes payable (Notes 4, 5, 23, 26 and 28) | — | 2,279 | ||||||
13,801 | 12,714 | |||||||
Unamortized debt discount, representing debt issuance costs and any difference between the fair value of consideration given or received at initial recognition, included in the financial liabilities as at December 31, 2010 and 2009 are as follows: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Long-term debt (Note 28) | 2,944 | 3,858 | ||||||
Obligation under finance lease | 1 | 3 | ||||||
Unamortized debt discount at end of year | 2,945 | 3,861 | ||||||
The following table describes all changes to unamortized debt discount as at December 31, 2010 and 2009. |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Unamortized debt discount at beginning of year | 3,861 | 4,577 | ||||||
Additions during the year | 114 | 182 | ||||||
Revaluations during the year | (16 | ) | 22 | |||||
Accretion during the year included as part of “Financing costs — net — Accretion on financial liabilities — net” (Note 5) | (1,014 | ) | (920 | ) | ||||
Unamortized debt discount at end of year | 2,945 | 3,861 | ||||||
Long-term Debt | ||
As at December 31, 2010 and 2009, long-term debt consists of: |
Description | Interest Rates | 2010 | 2009 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
U.S. Dollar Debts: | ||||||||||||||||||||
Export Credit Agencies-Supported Loans: | ||||||||||||||||||||
Finnvera, Plc, or Finnvera | 2.99% and US$ LIBOR + 0.05% to 1.35% in 2010 and US$ LIBOR + 0.05% to 1.35% in 2009 | US$ | 82 | Php 3,590 | US$ | 58 | Php 2,681 | |||||||||||||
Exportkreditnamnden, or EKN | 3.79% in 2010 and 2009 | 14 | 613 | 18 | 860 | |||||||||||||||
Kreditanstalt für Wiederaufbau, or KfW | US$ LIBOR + 0.65% to 2.50% in 2010 and 5.65% and US$ LIBOR + 0.65% to 2.50% in 2009 | — | — | 31 | 1,454 | |||||||||||||||
96 | 4,203 | 107 | 4,995 | |||||||||||||||||
Fixed Rate Notes | 8.35% to 11.375% in 2010 and 2009 | 375 | 16,450 | 385 | 17,876 | |||||||||||||||
Term Loans: | ||||||||||||||||||||
Debt Exchange Facility | 2.25% in 2010 and 2009 | 223 | 9,791 | 209 | 9,725 | |||||||||||||||
GSM Network Expansion Facilities | 4.515% to 4.70% and US$ LIBOR + 0.42% to 1.85% in 2010 and 4.49% to 4.70% and US$ LIBOR + 0.42% to 1.85% in 2009 | 97 | 4,230 | 157 | 7,274 | |||||||||||||||
Others | 2.79% + swap rate and US$ LIBOR + 0.42% to 0.50% in 2010 and 6%; 2.79% + swap rate and US$ LIBOR + 0.42% to 0.50% in 2009 | 85 | 3,740 | 118 | 5,484 | |||||||||||||||
US$ | 876 | Php 38,414 | US$ | 976 | Php 45,354 | |||||||||||||||
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Description | Interest Rates | 2010 | 2009 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
Philippine Peso Debts: | ||||||||||||||||||||
Corporate Notes | 5.625% to 9.1038% and PDST-F + 1.25% in 2010 and 2009 | Php 29,677 | Php 24,863 | |||||||||||||||||
Term Loans: | ||||||||||||||||||||
Unsecured Term Loans | 6.125% to 8.7792% and PDST-F + 0.30% to 1.50% in 2010 and 6.125% to 8.7792% and PDST-F + 0.75% to 1.50% in 2009 | 21,439 | 26,088 | |||||||||||||||||
Secured Term Loans | PDST-F + 1.375% and AUB’s prime rate in 2010 and PDST-F + 5.70% + Bank’s cost of funds; PDST-F + 1.375% and AUB’s prime rate in 2009 | 116 | 145 | |||||||||||||||||
51,232 | 51,096 | |||||||||||||||||||
Total long-term debt | 89,646 | 96,450 | ||||||||||||||||||
Less portion maturing within one year (Note 28) | 13,767 | 10,384 | ||||||||||||||||||
Noncurrent portion of long-term (Note 28) | Php 75,879 | Php 86,066 | ||||||||||||||||||
Note: Amounts presented are net of unamortized debt discount and debt issuance costs. | ||
The scheduled maturities of our consolidated outstanding long-term debt at nominal values as at December 31, 2010 are as follows: |
U.S. Dollar Debt | Php Debt | Total | ||||||||||||||
Year | In U.S. Dollar | In Php | In Php | In Php | ||||||||||||
(in millions) | ||||||||||||||||
2011 | 104 | 4,535 | 9,400 | 13,935 | ||||||||||||
2012 | 234 | 10,273 | 9,127 | 19,400 | ||||||||||||
2013 | 60 | 2,606 | 8,528 | 11,134 | ||||||||||||
2014 | 305 | 13,375 | 6,125 | 19,500 | ||||||||||||
2015 and onwards | 239 | 10,482 | 18,139 | 28,621 | ||||||||||||
942 | 41,271 | 51,319 | 92,590 | |||||||||||||
U.S. Dollar Debts: | ||
Export Credit Agencies-Supported Loans |
In order to acquire imported components for our network infrastructure in connection with our expansion and service improvement programs, we obtained loans extended and/or guaranteed by various export credit agencies. |
Finnvera, Plc, or Finnvera |
On February 11, 2005, Smart signed a refinancing facility with Finnish Export Credit, Plc, as Lender, and ING Bank N.V., as Arranger and Facility Agent under an export credit agency-backed facility in connection with Smart’s GSM expansion program. This facility was covered by a guarantee from Finnvera, the Finnish Export Credit Agency, for 100% of the political and commercial risk for the refinancing facility of GSM Phases 5A and 5B. The principal benefit of refinancing the Phase 5 loan was the savings from a lower interest margin on the refinancing facility. The facility was payable in equal semi-annual payments over five years starting | ||
September 1, 2005. The outstanding balance amounted to US$9.98 million, or Php464 million, net of unamortized discount, as at December 31, 2009 was paid in full on March 1, 2010. | ||
On May 14, 2009, Smart signed a US$50 million five-year term facility to finance the Phase 10 (Extension) GSM equipment and services contract with Finnish Export Credit, Plc guaranteed by Finnvera and awarded to Calyon as the Arranger. The facility was drawn on July 15, 2009. The loan is payable over five years in ten equal semi-annual payments. The amounts of US$39 million, or Php1,703 million, and US$48 million, or Php2,240 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On October 9, 2009, Smart signed a US$50 million five-year term loan facility to finance GSM equipment and services contracts with Finnish Export Credit, Plc guaranteed by Finnvera, the Finnish Export Credit Agency, for 100% political and commercial risk cover. The facility was awarded to Citicorp as the Arranger. The loan is payable over five years in ten equal semi-annual payments. As at December 31, 2009, no amount had been drawn under the facility. The amount of US$43 million, or Php1,887 million, net of unamortized debt discount, |
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which was drawn on April 7, 2010, remained outstanding as at December 31, 2010. |
Exportkreditnamnden, or EKN |
On November 25, 2008, Smart signed a US$22 million five-year term loan facility to finance the supply, installation, commissioning and testing of Wireless-Code Division Multiple Access, or W-CDMA/High Speed Packet Access project with Nordea Bank AB as Original Lender, Arranger and Facility Agent and subsequently assigned its rights and obligations to the Swedish Export Credit Corporation (AB Svensk Exportkredit) supported by EKN on December 10, 2008. The amounts of US$8 million, US$13 million and US$1 million were drawn on December 15, 2008, August 5, 2009 and September 1, 2009, respectively. This facility is payable semi-annually in ten equal installments commencing six months from December 10, 2008. The outstanding balance under the facility amounted to US$14 million, or Php613 million, and US$18 million, or Php860 million, both net of unamortized debt discount, as at December 31, 2010 and 2009, respectively. |
Kreditanstalt für Wiederaufbau, or KfW |
On January 25, 2002, PLDT signed two loan agreements with KfW, which provided PLDT with a US$149 million facility to refinance in part the repayment installments under its existing loans from KfW due from January 2002 to December 2004. The facility is composed of a nine-year loan, inclusive of a three-year disbursement period and a two-year grace period during which no principal is payable. It partly enjoys the guarantee of HERMES, the export credit agency of the Federal Republic of Germany. On various dates from 2002 to 2004, we had drawn a total of US$140 million under this facility. PLDT waived further disbursements under this refinancing facility effective September 1, 2004 and the undrawn portion of US$9 million was cancelled. | ||
The outstanding balance under the facility amounted to US$31 million, or Php1,454 million, as at December 31, 2009. Final repayment was made on October 15, 2010 and there are no outstanding amounts remaining under the facility as at December 31, 2010. | ||
Fixed Rate Notes | ||
PLDT has the following non-amortizing fixed rate notes outstanding as at December 31, 2010 and 2009: |
Principal Amount | Interest Rate | Maturity Date | 2010 | 2009 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
US$234,259,000 | 8.350 | % | March 6, 2017 | US$ | 231 | Php 10,149 | US$ | 242 | Php 11,256 | |||||||||||||||
US$145,789,000 | 11.375 | % | May 15, 2012 | 144 | 6,301 | 143 | 6,620 | |||||||||||||||||
US$ | 375 | Php 16,450 | US$ | 385 | Php 17,876 | |||||||||||||||||||
Term Loans |
US$283 Million Term Loan Facility, or Debt Exchange Facility |
On July 2, 2004, Smart acquired from PCEV’s creditors approximately US$289 million, or 69.4%, the aggregate of PCEV’s outstanding restructured debt at that time, in exchange for Smart debt and a cash payment by Smart. In particular, Smart paid an amount in cash of US$1.5 million, or Php84 million and issued new debt of | ||
US$283.2 million, or Php15,854 million, at fair value of Php8,390 million, net of unamortized debt discount amounting to Php7,464 million. | ||
The outstanding balance of the Facility amounted to US$223 million, or Php9,791 million, and US$209 million, or Php9,725 million, both net of unamortized debt discount, as at December 31, 2010 and 2009, respectively. The Facility will be payable in full on June 30, 2014. |
GSM Network Expansion Facilities |
On August 8, 2005, Smart signed a US$30 million commercial facility with Nordic Investment Bank to partly finance the related Phase 8 GSM equipment and services contracts. The facility is a five-year term loan payable semi-annually in ten equal installments with final repayment on July 11, 2011. The facility was drawn on July 11, 2006 for the full amount of US$30 million. The amounts of US$6 million, or Php263 million, and |
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US$12 million, or Php556 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On August 10, 2005, Smart signed a loan facility for its GSM Phase 8 financing in the amount of US$70 million. The facility was awarded to the Bank of Tokyo Mitsubishi Ltd., Mizuho Corporate Bank Ltd., Standard Chartered Bank and Sumitomo Mitsui Banking Corporation as the Lead Arrangers, with Finnish Export Credit, Plc as the Lender. Smart opted to utilize only a total of US$67 million of which US$10 million and US$57 million were drawn on February 15, 2006 and March 13, 2006, respectively. The undrawn balance of US$3 million was cancelled. The facility is a five-year term loan payable in ten equal semi-annual installments. The amount of US$15 million, or Php678 million, net of unamortized discount, remained outstanding as at December 31, 2009. The facility was paid in full on September 1, 2010. | ||
On July 31, 2006, Smart signed a U.S. Dollar term loan facility for US$44.2 million to partly finance the related Phase 9 GSM equipment and services contracts. The Lender is Finnish Export Credit, Plc with ABN AMRO Bank N.V., Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and Mizuho Corporate Bank Ltd. as the Lead Arrangers. The facility is a five-year term loan payable in ten equal semi-annual installments with final repayment on July 15, 2011. The facility was drawn on November 10, 2006 for the full amount of US$44.2 million. The amounts of US$9 million, or Php387 million, and US$18 million, or Php819 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On October 16, 2006, Smart signed a U.S. Dollar term loan facility with Metropolitan Bank and Trust Company to finance the related Phase 9 GSM facility for an amount of US$50 million. The facility is a five-year loan payable in 18 equal quarterly installments commencing on the third quarter from initial drawdown date with final repayment on October 10, 2012. The facility was drawn on October 10, 2007 for the full amount of US$50 million. The amounts of US$22 million, or Php973 million, and US$33 million, or Php1,547 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On October 10, 2007, Smart signed a US$50 million five-year term loan facility to finance the related Phase 10 GSM equipment and service contracts. The facility was awarded to Norddeutsche Landesbank Girozentrale Singapore Branch as the Original Lender with Standard Chartered Bank (Hong Kong) Ltd. as the Facility Agent. The full amount of the facility was drawn on March 10, 2008. The loan is payable over five years in ten equal semi-annual payments with final repayment on March 11, 2013. The amounts of US$25 million, or Php1,091 million, and US$35 million, or Php1,616 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On November 27, 2008, Smart signed a US$50 million five-year term loan facility to finance the Phase 10 GSM equipment and service contracts with Finnish Export Credit, Plc. The facility was awarded to ABN AMRO Bank N.V., Australia and New Zealand Banking Group Limited, Standard Chartered Bank, Mizuho Corporate Bank Ltd. as the Lead Arrangers. The loan is payable over five years in ten equal semi-annual installments with final repayment on January 23, 2014. The facility was drawn on January 23, 2009 and May 5, 2009 in the amounts of US$5 million and US$45 million, respectively. The amounts of US$35 million, or Php1,516 million, and US$44 million, or Php2,058 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
Other Term Loans |
On January 15, 2008, PLDT signed a US$100 million term loan facility agreement with Norddeutsche Landesbank Girozentrale Singapore Branch to be used for the capital expenditure requirements of PLDT. Two separate drawings of US$50 million each was drawn from the facility on March 27, 2008 and April 10, 2008 and is payable over five years in ten equal semi-annual installments with final repayment on March 27, 2013. The amounts of US$50 million, or Php2,191 million, and US$70 million, or Php3,250 million, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
On July 15, 2008, PLDT signed a loan agreement amounting to US$50 million with the Bank of the Philippine Islands to refinance its loan obligations which were utilized for service improvements and expansion programs. The initial drawdown under this loan was made on July 21, 2008 in the amount of US$15 million and the balance of US$35 million was drawn on September 30, 2008. This loan is payable in 17 equal quarterly installments commencing on the fourth quarter from initial drawdown date with final repayment on July 22, 2013. The amounts of US$32 million, or Php1,417 million, and US$44 million, or Php2,048 million, remained outstanding |
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On September 24, 2008, BOW signed an Islamic finance facility agreement granted by the Bank of London and the Middle East for a total of US$19 million, which will mature on various dates from June 30, 2013 to September 30, 2014. The amounts of US$3 million, or Php132 million, and US$4 million, or Php186 million, remained outstanding as at December 31, 2010 and 2009, respectively. | ||
Philippine Peso Debts: | ||
Corporate Notes |
Php5,000 Million Fixed Rate Corporate Notes |
On February 15, 2007, Smart issued Php5,000 million fixed rate corporate notes, comprised of Series A five-year notes amounting to Php3,800 million and Series B ten-year notes amounting to Php1,200 million. Proceeds from the issuance of these notes have been used primarily for Smart’s capital expenditures for network improvement and expansion. The amounts of Php4,962 million and Php4,968 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
Php5,000 Million Fixed Rate Corporate Notes |
On December 12, 2008, Smart issued a five-year term unsecured fixed rate corporate notes amounting to Php5,000 million. The facility has annual amortizations equivalent to 1% of the principal amount with the balance of 96% payable on December 13, 2013. Funds raised from the issuance of these notes were used primarily to finance Smart’s capital expenditures for network upgrade and expansion. The amounts of Php4,867 million and Php4,907 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
Php5,000 Million Fixed Rate Corporate Notes |
On February 20, 2009, PLDT issued Php5,000 million fixed rate corporate notes under a Notes Facility Agreement dated February 18, 2009, comprised of Series A five-year notes amounting to Php2,390 million, Series B seven-year notes amounting to Php100 million, and Series C ten-year notes amounting to Php2,510 million. Proceeds from the facility were used to finance capital expenditures of PLDT. The aggregate amounts of Php4,976 million and Php5,000 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php3,000 Million Corporate Notes |
On June 29, 2009, Smart signed a Notes Facility Agreement with BDO Private Bank, Inc. amounting to Php3,000 million to finance capital expenditures. The facility is comprised of Php1,000 million Series A1 note payable in full in 1.5 years and Php1,000 million each for Series B1 and B2 notes payable in full in two years. The aggregate amount of Php2,000 million of Series A1 and B1 notes were drawn on July 8, 2009 while the amount of Php1,000 million of Series B2 notes was drawn on September 1, 2009. The aggregate amounts of Php2,997 million and Php2,988 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. The Series A1 amounting to Php1,000 million was repaid on January 10, 2011. |
Php7,000 Million Fixed Rate Corporate Notes |
On December 10, 2009, PLDT issued Php7,000 million fixed rate corporate notes under a Notes Facility Agreement dated December 8, 2009, comprised of Series A 5.25-year notes amounting to Php5,050 million, Series B seven-year notes amounting to Php850 million, and Series C ten-year notes amounting to Php1,100 million. Proceeds from the facility were used to finance capital expenditures and/or to refinance its loan obligations which were also used to finance capital expenditures for network expansion and improvement. The aggregate amounts of Php6,891 million and Php7,000 million remained outstanding as at December 31, 2010 and 2009, respectively. |
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Php2,500 Million Fixed Rate Corporate Notes |
On July 13, 2010, PLDT issued Php2,500 million five-year fixed rate corporate notes under a Notes Facility Agreement dated July 12, 2010. The notes are non-amortizing and will mature on July 13, 2015. Proceeds from the facility were used to finance capital expenditures and/or to refinance PLDT’s loan obligations. The amount of Php2,500 million remained outstanding as at December 31, 2010. |
Php2,500 Million Fixed Rate Corporate Notes |
On July 13, 2010, Smart issued Php2,500 million five-year fixed rate corporate notes under a Notes Facility Agreement dated July 12, 2010. The notes are non-amortizing and will mature on July 13, 2015. Proceeds from the facility was used primarily to finance Smart’s capital expenditures for network improvement and expansion. The amount of Php2,484 million, net of unamortized debt discount, remained outstanding as at December 31, 2010. |
Php2,000 Million Fixed Rate Corporate Notes |
On March 9, 2011, Smart signed a Notes Facility Agreement with BDO Private Bank, Inc. amounting to Php2,000 million to finance capital expenditures. Tranche A amounting to Php1,000 million was issued on March 16, 2011 and Tranche B amounting to Php1,000 million to be issued in multiple drawdowns of Php250 million each, all of which are payable in full in five years from their respective issue dates. As at March 29, 2011, Php1,500 million has been drawn from this facility. |
Php5,000 Million Fixed Rate Corporate Notes |
On March 24, 2011, PLDT issued Php5,000 million fixed rate corporate notes under a Notes Facility Agreement dated March 22, 2011, comprised of Series A 5-year notes amounting to Php3,435 million, Series B 7-year notes amounting to Php700 million and Series C ten-year rate notes amounting to Php865 million. Proceeds from the facilities will be used to finance capital expenditures and refinance existing debt obligations which were also used to finance service improvements and expansion programs. |
Term Loans |
Unsecured Term Loans | |||
Php2,500 Million Term Loan Facility |
On August 14, 2006, Smart signed a Philippine Peso term loan facility with Metropolitan Bank and Trust Company amounting to Php2,500 million to finance the related Phase 9 GSM facility. The facility is payable over five years in 18 equal quarterly installments commencing on the third quarter from initial drawdown date with final repayment on December 9, 2011. The facility was drawn on December 11, 2006. The amounts of Php555 million and Php1,109 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
Php400 Million and Php20 Million Refinancing Loans |
On May 22, 2007, PLDT signed loan agreements with The Philippine American Life and General Insurance Company for Php400 million and The Philam Bond Fund, Inc. for Php20 million to refinance their respective participations in the ten-year note under the Php1,270 million Fixed Rate Corporate Notes which were repaid on June 12, 2007. Both refinancing loans will mature on June 12, 2014. The amounts of Php400 million and Php20 million remained outstanding as at December 31, 2009 were both prepaid in full on December 13, 2010. |
Php2,500 Million Term Loan Facility |
On October 21, 2008, Smart signed a Philippine Peso term loan facility with Metropolitan Bank and Trust Company to finance capital expenditures for an amount of Php2,500 million, which was drawn in full on November 13, 2008. The facility is payable over five years in 16 equal consecutive quarterly installments commencing on the fifth quarter from the date of the first drawdown with final repayment on November 13, 2013. The amounts of Php1,870 million and Php2,492 million, both net of unamortized debt discount, remained |
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outstanding as at December 31, 2010 and 2009, respectively. |
Php2,400 Million Term Loan Facility |
On November 21, 2008, PLDT signed a loan agreement with Land Bank of the Philippines amounting to Php2,400 million to finance capital expenditures and/or to refinance its loan obligations which were utilized for service improvements and expansion programs. The initial drawdown under this loan was made on December 12, 2008 in the amount of Php500 million and the balance of Php1,900 million was subsequently drawn on May 20, 2009 and July 31, 2009 in two equal Php500 million tranches and on September 15, 2009 in the amount of Php900 million. The loan is payable over five years in ten equal semi-annual installments with final repayment on December 12, 2013. The amounts of Php1,533 million and Php2,044 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php3,000 Million Term Loan Facility |
On November 26, 2008, PLDT signed a loan agreement with Union Bank of the Philippines amounting to Php3,000 million to finance capital expenditures and/or to refinance its loan obligations which were utilized for service improvements and expansion programs. The initial drawdown under this loan was made on December 22, 2008 in the amount of Php500 million and the balance of Php2,500 million was subsequently drawn on April 14, 2009. The loan is payable over five years in nine equal semi-annual installments commencing on the second semester from initial drawdown date with final repayment on December 23, 2013. The amounts of Php2,000 million and Php2,667 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php2,000 Million Term Loan Facility |
On November 28, 2008, PLDT signed a loan agreement with Philippine National Bank amounting to Php2,000 million to be used for its capital expenditure requirements in connection with PLDT’s service improvement and expansion programs. The initial drawdown under this loan was made on December 19, 2008 in the amount of Php500 million and the balance of Php1,500 million was subsequently drawn on January 30, 2009, February 27, 2009 and March 13, 2009 in three equal Php500 million tranches. The loan is payable over five years in 17 equal quarterly installments commencing on the fourth quarter from initial drawdown date with final repayment on December 19, 2013. The amounts of Php1,412 million and Php1,882 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php1,000 Million Term Loan Facility |
On February 20, 2009, Smart signed a Philippine Peso term loan facility with China Trust (Philippines) Commercial Bank Corporation to finance capital expenditures for an amount of Php1,000 million, which was drawn in full on April 27, 2009. The facility is a five-year term loan payable in eight equal semi-annual installments starting on the eighteenth month from initial drawdown date. The amount of Php996 million, net of unamortized debt discount, remained outstanding as at December 31, 2009 was repaid on October 27, 2010. |
Php2,500 Million Term Loan Facility |
On March 6, 2009, PLDT signed a loan agreement with Banco de Oro Unibank, Inc. amounting to Php2,500 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The loan is payable in full upon maturity on April 17, 2014. The amount of Php2,500 million was fully drawn on April 17, 2009 and remained outstanding as at December 31, 2010 and 2009. |
Php1,500 Million Term Loan Facility |
On May 12, 2009, Smart signed a Philippine Peso term loan facility with Banco de Oro Unibank, Inc. amounting to Php1,500 million to finance capital expenditures which was fully drawn on May 20, 2009. The facility is a three-year loan payable in full upon maturity on May 20, 2012. The amounts of Php1,494 million and Php1,491 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
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Php1,000 Million Term Loan Facility |
On May 14, 2009, Smart signed a Philippine Peso term loan facility with Asia United Bank amounting to Php1,000 million to finance capital expenditures, which was drawn in full on July 3, 2009. The facility is payable over five years in eight equal semi-annual installments commencing on the eighteenth month from initial drawdown date with final repayment on July 3, 2014. The amounts of Php997 million and Php996 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. The debt was paid in full on January 3, 2011. |
Php1,000 Million Term Loan Facility |
On May 15, 2009, Smart signed a Philippine Peso term loan facility with Philippine National Bank amounting to Php1,000 million to finance capital expenditures, which was drawn in full on July 2, 2009. The facility is a seven-year loan, payable in full upon maturity on July 2, 2016. The amounts of Php996 million and Php995 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. The debt was paid in full on January 3, 2011. |
Php2,500 Million Term Loan Facility |
On June 8, 2009, PLDT signed a loan agreement with Rizal Commercial Banking Corporation amounting to Php2,500 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The facility is payable over seven years with an annual amortization of 1% on the fifth and sixth year from initial drawdown date and the balance payable upon maturity on September 28, 2016. The amount of Php2,500 million was fully drawn on September 28, 2009 and remained outstanding as at December 31, 2010 and 2009. |
Php1,500 Million Term Loan Facility |
On June 16, 2009, PLDT signed a loan agreement with Allied Banking Corporation amounting to Php1,500 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The facility is payable over five years in 17 equal quarterly installments commencing on September 15, 2010 with final repayment on September 15, 2014. The amount of Php1,500 million was fully drawn on September 15, 2009. The amounts of Php1,324 million and Php1,500 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php500 Million Term Loan Facility |
On June 29, 2009, PLDT signed a loan agreement with Insular Life Assurance Company, Ltd. amounting to Php500 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The loan will mature on July 1, 2016. The amount of Php500 million was fully drawn on July 1, 2009 and remained outstanding as at December 31, 2010 and 2009. |
Php1,000 Million Term Loan Facility |
On July 16, 2009, Smart signed a Philippine Peso term loan facility with Metropolitan Bank and Trust Company to finance capital expenditures for an amount of Php1,000 million, which was drawn in full on August 3, 2009. The facility is payable over five years in 16 equal consecutive quarterly installments commencing on the fifth quarter from the date of the first drawdown with final repayment on August 1, 2014. The amounts of Php935 million and Php996 million, both net of unamortized debt discount, remained outstanding as at December 31, 2010 and 2009, respectively. |
Php2,000 Million Term Loan Facility |
On September 18, 2009, PLDT signed a loan agreement with Bank of the Philippine Islands amounting to Php2,000 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The facility is payable over five years in 17 equal quarterly installments with final repayment on October 27, 2014. The initial drawdown under this loan was made on October 26, 2009 in the amount of Php1,000 million and the balance of Php1,000 million was subsequently drawn on December 4, 2009. The amounts of Php1,882 million and Php2,000 million remained outstanding as at |
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December 31, 2010 and 2009, respectively. |
Php1,000 Million Term Loan Facility |
On November 23, 2009, PLDT signed a loan agreement with Bank of the Philippine Islands amounting to Php1,000 million to finance capital expenditures and/or refinance its obligations which were utilized for service improvements and expansion programs. The facility is payable over five years in 17 equal quarterly installments with final repayment on December 18, 2014. The amount of Php1,000 million was fully drawn on December 18, 2009. The amounts of Php941 million and Php1,000 million remained outstanding as at December 31, 2010 and 2009, respectively. |
Php1,500 Million Term Loan Facility |
On March 15, 2011, Smart signed a Philippine Peso term loan facility with Metropolitan Bank and Trust Company to finance capital expenditures for an amount of Php1,500 million, which was drawn in full on March 22, 2011. The facility is a five-year loan, payable in full upon maturity on March 22, 2016. |
Php2,000 Million Term Loan Facility |
On March 24, 2011, Smart signed a Philippine Peso term loan facility with Philippine National Bank to finance capital expenditures for an amount of Php2,000 million, which was drawn in full on March 29, 2011. The facility is a five-year loan, payable in full upon maturity on March 29, 2016. |
Secured Term Loans | |||
Php150 Million Term Loan Facility |
On June 7, 2007, BayanTrade obtained a medium term loan facility with Bank of the Philippine Islands amounting to Php150 million, which was fully availed of in December 2007. Each interest period will cover a 90-day period commencing on the initial drawdown date and the interest rate will be determined at the first day of each interest period and payable at the end of the interest period. The loan facility was obtained to facilitate the purchase of a subsidiary and to support its working capital requirements. The aggregate loan amount is due as follows: (a) 20% within the third year from first drawdown date; (b) 20% within the fourth year from first drawdown date; and (c) 60% within the fifth year from first drawdown date. BayanTrade is given a right to repay the principal and the interest accruing thereon on each interest payment date or interest rate setting date without any prepayment penalty. BayanTrade and the bank has agreed to the following terms: (a) pledge of BayanTrade’s shares of stock of the subsidiary purchased at a collateral loan ratio of 2:1; (b) assignment of receivables at a collateral-to-loan of 2:1; and (c) negative pledge on other present and future assets of BayanTrade. The outstanding principal balance of the loan was Php113 million and Php139 million as at December 31, 2010 and 2009, respectively. |
Php8 Million Term Loan Facility |
On March 31, 2009, Level Up! secured a three-year loan facility with Asia United Bank amounting to Php8 million maturing on March 30, 2012. Principal is payable in twelve equal successive quarterly installments of Php673 thousand starting June 30, 2009 and every quarter thereafter. This loan has a floating interest rate payable every 30 days starting April 30, 2009. The loan is secured by the equipment where the proceeds of the loan were used. The amounts of Php3 million and Php6 million remained outstanding as at December 31, 2010 and 2009, respectively. | ||
Notes Payable | ||
On April 23, 2009, PLDT signed the notes facility agreement with BDO Private Bank, Inc. amounting to Php2,000 million to finance capital expenditures and/or refinance its loan obligations which were utilized for service improvements and expansion programs. The facility is comprised of a Php1,000 million Tranche A fixed rate note and a Php1,000 million Tranche B floating rate note, which were fully drawn on April 28, 2009 and were fully paid on April 28, 2010. |
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SPi had an outstanding balance of short-term notes of US$6 million, or Php279 million, as at December 31, 2009, which matured on various dates from April 26, 2010 to June 4, 2010. | ||
Debt Covenants | ||
Our debt instruments contain restrictive covenants, including covenants that require us to comply with specified financial ratios and other financial tests, calculated in conformity with Philippine Financial Reporting Standards, or PFRS, at relevant measurement dates, principally at the end of each quarterly period. We have complied with all of our maintenance financial ratios as required under our loan covenants and other debt instruments. | ||
The principal factors that can negatively affect our ability to comply with these financial ratios and other financial tests are depreciation of the Philippine peso relative to the U.S. dollar, poor operating performance of PLDT and its consolidated subsidiaries, impairment or similar charges in respect of investments or other long-lived assets that may be recognized by PLDT and its consolidated subsidiaries, and increases in our interest expense. Interest expense may increase as a result of various factors including issuance of new debt, the refinancing of lower cost indebtedness by higher cost indebtedness, depreciation of the Philippine peso, the lowering of PLDT’s credit ratings or the credit ratings of the Philippines, increase in reference interest rates, and general market conditions. Since approximately 43% of PLDT’s total consolidated debts as at December 31, 2010 were denominated in foreign currencies, principally in U.S. dollars, many of these financial ratios and other tests are negatively affected by any weakening of the Philippine peso. | ||
PLDT’s debt instruments contain a number of other negative covenants that, subject to certain exceptions and qualifications, restrict PLDT’s ability to take certain actions without lenders’ approval, including: (a) incurring additional indebtedness; (b) disposing of all or substantially all of its assets or of assets in excess of specified thresholds of its tangible net worth; (c) creating any lien or security interest; (d) permitting set-off against amounts owed to PLDT; (e) merging or consolidating with any other company; (f) entering into transactions with stockholders and affiliates; and (g) entering into sale and leaseback transactions. | ||
Further, certain of PLDT’s debt instruments contain provisions wherein PLDT may be required to repurchase or prepay certain indebtedness in case of a change in control of PLDT. | ||
PLDT’s debt instruments also contain customary and other default provisions that permit the lender to accelerate amounts due or terminate their commitments to extend additional funds under the debt instruments. These default provisions include: (a) cross-defaults that will be triggered only if the principal amount of the defaulted indebtedness exceeds a threshold amount specified in these debt instruments; (b) failure by PLDT to meet certain financial ratio covenants referred to above; (c) the occurrence of any material adverse change in circumstances that a lender reasonably believes materially impairs PLDT’s ability to perform its obligations under its debt instrument with the lender; (d) the revocation, termination or amendment of any of the permits or franchises of PLDT in any manner unacceptable to the lender; (e) the nationalization or sustained discontinuance of all or a substantial portion of PLDT’s business; and (f) other typical events of default, including the commencement of bankruptcy, insolvency, liquidation or winding up proceedings by PLDT. | ||
Smart’s debt instruments contain certain restrictive covenants that require Smart to comply with specified financial ratios and other financial tests at semi-annual measurement dates. Smart’s loan agreements include compliance with financial tests such as consolidated debt to consolidated equity, consolidated debt to consolidated EBITDA and debt service coverage ratios. The agreements also contain customary and other default provisions that permit the lender to accelerate amounts due under the loans or terminate their commitments to extend additional funds under the loans. These default provisions include: (a) cross-defaults and cross-accelerations that permit a lender to declare a default if Smart is in default under another loan agreement. These cross-default provisions are triggered upon a payment or other default permitting the acceleration of Smart debt, whether or not the defaulted debt is accelerated; (b) failure by Smart to comply with certain financial ratio covenants; and (c) the occurrence of any material adverse change in circumstances that the lender reasonably believes materially impairs Smart’s ability to perform its obligations or impair guarantors’ ability to perform their obligations under its loan agreements. | ||
As at December 31, 2010, we were in compliance with all of our debt covenants. |
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Obligations Under Finance Lease | ||
The consolidated future minimum payments for finance leases as at December 31, 2010 are as follows: |
Year | (in million pesos) | |||
Within one year | 35 | |||
After one year but not more than five years | 9 | |||
Total minimum finance lease payments (Note 26) | 44 | |||
Less amount representing unamortized interest | 1 | |||
Present value of net minimum finance lease payments (Notes 3 and 28) | 43 | |||
Less obligations under finance lease maturing within one year (Notes 9 and 28) | 34 | |||
Long-term portion of obligations under finance lease (Notes 9 and 28) | 9 | |||
Municipal Telephone Projects | ||
PCEV has an existing finance lease agreement for the Palawan Telecommunications System of the Municipal Telephone Project Office, or MTPO, with the Department of Transportation and Communications, or DOTC. Presently, the 18 public calling office stations that were put up pursuant to the MTPO Contract are no longer working. The last payment by PCEV to the DOTC was in July 2000 and no payments have been made since then. PCEV made several attempts to pre-terminate the MTPO Contract in letters to the DOTC where PCEV also manifested its willingness to discuss mutually beneficial compromise agreements for the pre-termination. | ||
The DOTC denied PCEV’s petition and reiterated a provision in the MTPO Contract that the pre-termination will result in the imposition of sanctions in the form of liquidated damages not exceeding Php23 million. | ||
PCEV maintains that it had pre-terminated the MTPO Contract as early as 2003, and that the issue of PCEV’s pre-termination of the MTPO Contract be referred for arbitrations in accordance with the provisions of the MTPO Contract. | ||
On May 8, 2009, PCEV filed with the Philippine Dispute Resolution Center, Inc., or PDRCI, a Request for Arbitration against the DOTC for the PDRCI to commence the formation of the tribunal and such other procedures required under the PDRCI rules. In the Request for Arbitration, PCEV prayed for the following: (1) as interim relief: ordering the DOTC to cease and desist from enforcing collection and charging additional interests and penalties against PCEV pending the resolution of the arbitration proceedings; and (2) as final relief: (a) ordering the suspension of the MTPO Contract; (b) ordering the termination of the MTPO Contract as at March 20, 2003 and holding PCEV free from any liability for non-performance of the obligations thereunder from March 20, 2003; and (c) ordering the DOTC to pay PCEV attorney’s fees and the expenses and cost of arbitration. | ||
Last April 13, 2010, the Arbitral Tribunal issued a Final Award for the arbitration case. In the Disposition portion of the Final Award, the Arbitral Tribunal declared valid and justified PCEV’s suspension of the MTPO contract as at March 20, 2003 on the basis of Section 9.3 (Force Majeure) of the MTPO contract, thereby holding PCEV free from liquidated damages for non-performance of the obligations thereunder. PCEV, however, was ordered to pay the DOTC the unpaid annual lease rentals after September 2000 to January 14, 2003 in the amount of Php5.2 million as well as interest and penalties of Php2 million for non-payment of such rentals. Further, PCEV was declared as entitled to the automatic transfer of the ownership of the facilities as provided in Section 7.8 of the MTPO contract. Accordingly, PCEV shall pay DOTC 50% of the Net Present Value of the unpaid lease up to 30 years in the amount of Php21.3 million for the facilities. | ||
The total amount to be paid by PCEV to DOTC is Php28.5 million. As at December 31, 2010, PCEV already advanced Php1 million to DOTC for arbitration expenses and site inspection costs. The remaining balance of Php27.5 million will be paid in two parts: (1) Php26.1 million shall be released directly to DOTC; and (2) Php1.4 million shall be remitted to the Bureau of Treasury to be recorded under Fund Code 152, Special Account of the General Fund for the Office of the Solicitor General. | ||
On April 30, 2010, PCEV filed a Petition for Confirmation of the Final Award with the Regional Trial Court, or RTC, of the City of Mandaluyong. In a Manifestation and Motion filed by the DOTC in the same court, the DOTC joined PCEV in the latter’s Petition for Confirmation of the Final Award. In a July 5, 2010 Decision, Branch 212 of the RTC of the City of Mandaluyong, finding the Final Award to be not contrary to law, morals, |
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good customs and public policy, confirmed the Final Award. PCEV is now in the process of discussing with DOTC the finalization of an agreement for the transfer of the facilities to PCEV and the payment of the amounts due, as stated in the Final Award. | ||
Other Long-term Finance Lease Obligations | ||
The PLDT Group has various long-term lease contracts for a period of three years covering various office equipment. In particular, PLDT, Smart and ePLDT have finance lease obligations in the aggregate amounts of Php18 million and Php24 million as at December 31, 2010 and 2009, respectively, in respect of office equipment. SeeNote 9 — Property, Plant and Equipment. | ||
Under the terms of certain loan agreements and other debt instruments, PLDT may not create, incur, assume, permit or suffer to exist any mortgage, pledge, lien or other encumbrance or security interest over the whole or any part of its assets or revenues or suffer to exist any obligation as lessee for the rental or hire of real or personal property in connection with any sale and leaseback transaction. |
21. | Deferred Credits and Other Noncurrent Liabilities |
As at December 31, 2010 and 2009, this account consists of: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Accrual of capital expenditures under long-term financing | 12,040 | 11,966 | ||||||
Provision for asset retirement obligations (Notes 3 and 9) | 1,344 | 1,204 | ||||||
Unearned revenues (Note 23) | 114 | 66 | ||||||
Contingent consideration for business acquisitions — net of current portion (Notes 13, 14 and 23) | — | 1,193 | ||||||
Others | 69 | 9 | ||||||
13,567 | 14,438 | |||||||
Accrual of capital expenditures under long-term financing represent expenditures related to the expansion and upgrade of our network facilities which are not due to be settled within one year. Such accruals are settled through refinancing from long-term loans obtained from the banks. | ||
The following table summarizes all changes to asset retirement obligations for the years ended December 31, 2010 and 2009: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Provision for asset retirement obligations at beginning of year | 1,204 | 1,100 | ||||||
Accretion expenses for the year (Note 5) | 97 | 94 | ||||||
Additional liability recognized during the year (Note 29) | 49 | 17 | ||||||
Settlement of obligations | (6 | ) | (7 | ) | ||||
Provision for asset retirement obligations at end of year (Note 3) | 1,344 | 1,204 | ||||||
22. | Accounts Payable |
As at December 31, 2010 and 2009, this account consists of: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Suppliers and contractors (Notes 26 and 28) | 20,957 | 14,975 | ||||||
Taxes (Notes 27 and 28) | 2,114 | 1,894 | ||||||
Carriers (Notes 26 and 28) | 1,866 | 1,937 | ||||||
Related parties (Notes 24, 26 and 28) | 244 | 233 | ||||||
Others | 623 | 562 | ||||||
25,804 | 19,601 | |||||||
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23. | Accrued Expenses and Other Current Liabilities |
As at December 31, 2010 and 2009, this account consists of: |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Accrued utilities and related expenses (Notes 24, 26 and 28) | 19,941 | 17,549 | ||||||
Unearned revenues (Note 21) | 4,698 | 4,588 | ||||||
Accrued employee benefits (Notes 3, 25, 26 and 28) | 3,853 | 8,074 | ||||||
Accrued taxes and related expenses (Notes 26 and 27) | 2,236 | 1,941 | ||||||
Current portion of contingent consideration for business acquisitions (Notes 13, 14 and 21) | 1,632 | 14 | ||||||
Accrued interests and other related costs (Notes 20, 26 and 28) | 1,028 | 1,167 | ||||||
Liability arising from purchase of investment (Notes 10, 13 and 28) | — | 65 | ||||||
Others | 2,571 | 2,048 | ||||||
35,959 | 35,446 | |||||||
Accrued utilities and related expenses pertain to cost incurred for repairs and maintenance (mostly pertaining to electricity and water consumption), selling and promotions, professional and other contracted services, rent, insurance and security services, and other operational-related expenses pending receipt of billings and statement of accounts from suppliers. | ||
Unearned revenues represent advance payments for leased lines, installation fees, monthly service fees and unused and/or unexpired portion of prepaid loads. | ||
Contingent Consideration for Business Acquisitions | ||
Contingent consideration for business acquisitions were recognized in relation to SPi’s acquisition cost of Springfield and Laguna Medical on April 12, 2007 and August 31, 2009, respectively. SeeNote 13 — Business Combinations and Acquisition of Non-Controlling Interests andNote 14 — Goodwill and Intangible Assets. | ||
SPi acquired 100% of Springfield plus contingent consideration with fair value at acquisition date of US$18 million, or Php894 million. The adjusted fair value of contingent consideration, as revised after effecting adjustments on forecasted earn-out and accretion, amounted to US$35.3 million, or Php1,547 million, and US$20.5 million, or Php951 million, as at December 31, 2010 and 2009, respectively. | ||
SPi acquired 80% of Laguna Medical with a mandatory Put-Call option in respect of the remaining 20% of the outstanding common stock of Laguna Medical. The estimated fair value of the contingent consideration from the mandatory Put-Call option at the acquisition date amounted to US$5.4 million, or Php257 million. The adjusted fair value of contingent consideration after accretion amounted to US$1.9 million, or Php85 million, and US$5.5 million, or Php256 million, as at December 31, 2010 and 2009, respectively. | ||
Movements in contingent consideration for business acquisitions for the years ended December 31, 2010 and 2009 are as follows: |
2010 | 2009 | |||||||||||||||
In U.S. Dollar | In Php | In U.S. Dollar | In Php | |||||||||||||
(in millions) | ||||||||||||||||
Balance at beginning of year | 26 | 1,207 | 15 | 720 | ||||||||||||
Business combinations (Note 13) | 8 | 344 | 8 | 389 | ||||||||||||
Accretion for the year | 3 | 163 | 3 | 142 | ||||||||||||
Payments | — | (11 | ) | — | (13 | ) | ||||||||||
Translation | — | (71 | ) | — | (31 | ) | ||||||||||
Balance at end of year | 37 | 1,632 | 26 | 1,207 | ||||||||||||
Less current portion of contingent consideration for business acquisitions | 37 | 1,632 | — | 14 | ||||||||||||
Contingent consideration for business acquisitions — net of current portion (Note 21) | — | — | 26 | 1,193 | ||||||||||||
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24. | Related Party Transactions |
a. | Air Time Purchase Agreement between PLDT and AIL and Related Agreements | ||
Under the Founder NSP Air Time Purchase Agreement, or ATPA, entered into with AIL in March 1997, which was amended in December 1998 (as amended, the “Original ATPA”), PLDT was granted the exclusive right to sell AIL services, through ACeS Philippines, as national service provider, or NSP, in the Philippines. In exchange, the Original ATPA required PLDT to purchase from AIL a minimum of US$5 million worth of air time (the “Minimum Air Time Purchase Obligation”) annually over ten years commencing on January 1, 2002 (the “Minimum Purchase Period”), the expected date of commercial operations of the Garuda I Satellite. In the event that AIL’s aggregate billed revenue was less than US$45 million in any given year, the Original ATPA also required PLDT to make supplemental air time purchase payments not to exceed US$15 million per year during the Minimum Purchase Period (the “Supplemental Air Time Purchase Obligation”). | |||
On February 1, 2007, the parties to the Original ATPA entered into an amendment to the Original ATPA on substantially the terms attached to the term sheet negotiated with the relevant banks (the “Amended ATPA”). Under the Amended ATPA, the Minimum Air Time Purchase Obligation was amended and replaced in its entirety with an obligation of PLDT (the “Amended Minimum Air Time Purchase Obligation”) to purchase from AIL a minimum of US$500 thousand worth of air time annually over a period ending upon the earlier of: (i) the expiration of the Minimum Purchase Period; and (ii) the date on which all indebtedness incurred by AIL to finance the AIL System is repaid. Furthermore, the Amended ATPA unconditionally released PLDT from any obligations arising out of or in connection with the Original ATPA prior to the date of the Amended ATPA, except for obligations to pay for billable units used prior to such date. | |||
Total fees under the Amended ATPA amounted to Php122 million, Php158 million and Php168 million for the years ended December 31, 2010, 2009 and 2008, respectively. Under the Amended ATPA, the outstanding obligations of PLDT amounted to Php140 million and Php114 million as at December 31, 2010 and 2009, respectively. SeeNote 5 — Income and Expenses. | |||
b. | Agreements between PLDT and certain subsidiaries with Meralco | ||
In the ordinary course of business, Meralco provides electricity to PLDT and certain subsidiaries’ offices within its franchise area. The rates charged by Meralco are the same as those with unrelated parties. Total electricity costs amounted to Php2,438 million and Php911 million for the year ended December 31, 2010 and for the period from July 14, 2009 (the date Meralco became an associate of PCEV) to December 31, 2009, respectively. Under these agreements, the outstanding utilities payable amounted to Php183 million and Php188 million as at December 31, 2010 and 2009, respectively. | |||
In 2009, PLDT and Smart renewed their respective Pole Attachment Contracts with Meralco, wherein Meralco leases its pole spaces to accommodate PLDT’s and Smart’s cable network facilities. Total fees under these contracts amounted to Php199 million and Php67 million for the year ended December 31, 2010 and for the period from July 14, 2009 to December 31, 2009, respectively. Under these agreements, the outstanding obligations of PLDT amounted to Php111 million and Php135 million as at December 31, 2010 and 2009, respectively. | |||
See alsoNote 10 — Investments in Associates and Joint Venturesfor additional transactions involving Meralco. | |||
c. | Transactions with Major Stockholders, Directors and Officers | ||
Material transactions to which PLDT or any of its subsidiaries is a party, in which a director, key officer or owner of more than 10% of the outstanding common stock of PLDT, or any member of the immediate family of a director, key officer or owner of more than 10% of the outstanding common stock of PLDT had a direct or indirect material interest, as at December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 are as follows: |
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1. | Cooperation Agreement with First Pacific and certain affiliates, or the FP Parties, NTT Communications and NTT DoCoMo | ||
In connection with the transfer by NTT Communications of approximately 12.6 million shares of PLDT’s common stock to NTT DoCoMo pursuant to a Stock Sale and Purchase Agreement dated January 31, 2006 between NTT Communications and NTT DoCoMo, the FP Parties, NTT Communications and NTT DoCoMo entered into a Cooperation Agreement, dated January 31, 2006. Under the Cooperation Agreement, the relevant parties extended certain rights of NTT Communications under the Stock Purchase and Strategic Investment Agreement dated September 28, 1999, as amended, and the Shareholders Agreement dated March 24, 2000, to NTT DoCoMo, including: |
• | certain contractual veto rights over a number of major decisions or transactions; and | ||
• | rights relating to the representation on the Board of Directors of PLDT and Smart, respectively, and any committees thereof. |
Moreover, key provisions of the Cooperation Agreement pertain to, among other things: |
• | Restriction on Ownership of Shares of PLDT by NTT Communications and NTT DoCoMo. Each of NTT Communications and NTT DoCoMo has agreed not to beneficially own, directly or indirectly, in the aggregate with their respective subsidiaries and affiliates, more than 21% of the issued and outstanding shares of PLDT’s common stock. If such event does occur, the FP Parties, as long as they own in the aggregate not less than 21% of the issued and outstanding shares of PLDT’s common stock, have the right to terminate their respective rights and obligations under the Cooperation Agreement, the Shareholders Agreement and the Stock Purchase and Strategic Investment Agreement. | ||
• | Limitation on Competition. NTT Communications, NTT DoComo and their respective subsidiaries are prohibited from investing in excess of certain thresholds in businesses competing with PLDT in respect of customers principally located in the Philippines and from using their assets in the Philippines in such businesses. Moreover, if PLDT, Smart or any of Smart’s subsidiaries intend to enter into any contractual arrangement relating to certain competing businesses, PLDT is required to provide, or to use reasonable efforts to procure that Smart or any of Smart’s subsidiaries provide, NTT Communications and NTT DoCoMo with the same opportunity to enter into such agreement with PLDT or Smart or any of Smart’s subsidiaries, as the case may be. | ||
• | Business Cooperation. PLDT and NTT DoCoMo agreed in principle to collaborate with each other on the business development, roll-out and use of a wireless-code division multiple access mobile communication network. In addition, PLDT agreed, to the extent of the power conferred by its direct or indirect shareholding in Smart, to procure that Smart will: (i) become a member of a strategic alliance group for international roaming and corporate sales and services; and (ii) enter into a business relationship concerning preferred roaming and inter-operator tariff discounts with NTT DoCoMo. | ||
• | Additional Rights of NTT DoCoMo. Pursuant to amendments effected by the Cooperation Agreement to the Stock Purchase and Strategic Investment Agreement and the Shareholders Agreement, upon NTT Communications and NTT DoCoMo and their respective subsidiaries owning in the aggregate 20% or more of PLDT’s shares of common stock and for as long as they continue to own in the aggregate at least 17.5% of PLDT’s shares of common stock then outstanding, NTT DoCoMo has additional rights under the Stock Purchase and Strategic Investment Agreement and Shareholders Agreement, including that: |
1. | NTT DoCoMo is entitled to nominate one additional NTT DoCoMo nominee to the Board of Directors of each PLDT and Smart; | ||
2. | PLDT must consult NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or certain of its committees of any proposal of investment in an entity that would primarily engage in a business that would be in direct competition or substantially |
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the same business opportunities, customer base, products or services with business carried on by NTT DoCoMo, or which NTT DoCoMo has announced publicly an intention to carry on; | |||
3. | PLDT must procure that Smart does not cease to carry on its business, dispose of all of its assets, issue common shares, merge or consolidate, or effect winding up or liquidation without PLDT first consulting with NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or Smart, or certain of its committees; and | ||
4. | PLDT must first consult with NTT DoCoMo no later than 30 days prior to the first submission to the board of PLDT or certain of its committees for the approval of any transfer by any member of the PLDT Group of Smart common capital stock to any person who is not a member of the PLDT Group. |
As at December 31, 2010, NTT Communications and NTT DoCoMo together beneficially owned approximately 21% of PLDT’s outstanding common stock. | |||
• | Change in Control. Each of NTT Communications, NTT DoCoMo and the FP Parties agreed that to the extent permissible under applicable laws and regulations of the Philippines and other jurisdictions, subject to certain conditions, to cast its vote as a shareholder in support of any resolution proposed by the Board of Directors of PLDT for the purpose of safeguarding PLDT from any Hostile Transferee. A“Hostile Transferee”is defined under the Cooperation Agreement to mean any person (other than NTT Communications, NTT DoCoMo, First Pacific or any of their respective affiliates) determined to be so by the PLDT Board of Directors and includes, without limitation, a person who announces an intention to acquire, seeking to acquire or acquires 30% or more of PLDT common shares then issued and outstanding from time to time or having (by itself or together with itself) acquired 30% or more of the PLDT common shares who announces an intention to acquire, seeking to acquire or acquires a further 2% of such PLDT common shares: (a) at a price per share which is less than the fair market value as determined by the Board of Directors of PLDT, as advised by a professional financial advisor; (b) which is subject to conditions which are subjective or which could not be reasonably satisfied; (c) without making an offer for all PLDT common shares not held by it and/or its affiliates and/or persons who, pursuant to an agreement or understanding (whether formal or informal), actively cooperate to obtain or consolidate control over PLDT; (d) whose offer for the PLDT common shares is unlikely to succeed; or (e) whose intention is otherwise notbona fide; provided that, no person will be deemed a Hostile Transferee unless prior to making such determination, the Board of Directors of PLDT has used reasonable efforts to discuss with NTT Communications and NTT DoCoMo in good faith whether such person should be considered a Hostile Transferee. | ||
• | Termination.If NTT Communications, NTT DoCoMo or their respective subsidiaries cease to own, in the aggregate, full legal and beneficial title to at least 10% of the shares of PLDT’s common stock then issued and outstanding, their respective rights and obligations under the Cooperation Agreement and the Shareholders Agreement will terminate and the Strategic Arrangements (as defined in the Stock Purchase and Strategic Investment Agreement) will terminate. If the FP Parties and their respective subsidiaries cease to have, directly or indirectly, effective voting power in respect of shares of PLDT’s common stock representing at least 18.5% of the shares of PLDT’s common stock then issued and outstanding, their respective rights and obligations under the Cooperation Agreement, the Stock Purchase and Strategic Investment Agreement, and the Shareholders Agreement will terminate. |
2. | Integrated i-mode Services Package Agreement between NTT DoCoMo and Smart | ||
An Integrated i-mode Services Package Agreement was entered into by Smart and NTT DoCoMo on February 15, 2006, under which NTT DoCoMo agreed to grant Smart, on an exclusive basis within the territory of the Philippines for a period of five years, an integrated i-mode services package including a non-transferable license to use the licensed materials and the i-mode brand, as well as implementation support and assistance and post-commercial launch support from NTT DoCoMo. Pursuant to this agreement, Smart is required to pay an initial license fee and running royalty fees based on the revenue arising from i-mode subscription fees and data traffic. There was no royalty fees for the years ended |
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December 31, 2010 and 2009 while total royalty fees charged to operations under this agreement amounted to Php55 million for the year ended December 31, 2008. Smart has no outstanding obligation under this agreement as at December 31, 2010 and 2009. | |||
3. | Advisory Service Agreement between NTT DoCoMo and PLDT | ||
An Advisory Services Agreement was entered into by NTT DoCoMo and PLDT on June 5, 2006, in accordance with the Cooperation Agreement dated January 31, 2006. Pursuant to the Advisory Services Agreement, NTT DoCoMo will provide the services of certain key personnel in connection with certain aspects of the business of PLDT and Smart. Also, this agreement governs the terms and conditions of the appointments of such key personnel and the corresponding fees related thereto. Total fees under this agreement amounted to Php75 million each for the years ended December 31, 2010 and 2009 and Php76 million for the year ended December 31, 2008. Under this agreement, the outstanding obligations of PLDT amounted to Php13 million and Php6 million as at December 31, 2010 and 2009, respectively. | |||
4. | Other Agreements with NTT Communications and/or its Affiliates | ||
PLDT is a party to the following agreements with NTT Communications and/or its affiliates: |
• | Advisory Services Agreement. On March 24, 2000, PLDT entered into an agreement with NTT Communications, as amended on March 31, 2003, March 31, 2005 and June 16, 2006, under which NTT Communications provides PLDT with technical, marketing and other consulting services for various business areas of PLDT starting April 1, 2000; | ||
• | Arcstar Licensing Agreement and Arcstar Service Provider Agreement. On March 24, 2000, PLDT entered into an agreement with NTT Worldwide Telecommunications Corporation under which PLDT markets, and manages data and other services under NTT Communications’ “Arcstar” brand to its corporate customers in the Philippines. PLDT also entered into a Trade Name and Trademark Agreement with NTT Communications under which PLDT has been given the right to use the trade name “Arcstar” and its related trademark, logo and symbols, solely for the purpose of PLDT’s marketing, promotional and sales activities for the Arcstar services within the Philippines; | ||
• | Conventional International Telecommunications Services Agreement.On March 24, 2000, PLDT entered into an agreement with NTT Communications under which PLDT and NTT Communications agreed to cooperative arrangements for conventional international telecommunications services to enhance their respective international businesses; and | ||
• | Service Agreement.On February 1, 2008, PLDT entered into an agreement with NTT World Engineering Marine Corporation wherein the latter provides offshore submarine cable repair and other allied services for the maintenance of PLDT’s domestic fiber optic network submerged plant. |
Total fees under these agreements amounted to Php114 million each for the years ended December 31, 2010 and 2009 and Php99 million for the year ended December 31, 2008. Under these agreements, the outstanding obligations of PLDT amounted to Php44 million and Php39 million as at December 31, 2010 and 2009, respectively. | |||
5. | Agreement between Smart and Asia Link B.V., or ALBV | ||
Smart has an existing Technical Assistance Agreement with ALBV, a subsidiary of the First Pacific Group. ALBV provides technical support services and assistance in the operations and maintenance of Smart’s cellular business. The agreement, which upon its expiration on February 23, 2008 was renewed until February 23, 2012 and is subject to further renewal upon mutual agreement of the parties, provides for payment of technical service fees equivalent to 1% of the consolidated net revenues of Smart. Total service fees charged to operations under this agreement amounted to Php615 million, Php634 million and Php630 million for the years ended December 31, 2010, 2009 and 2008, respectively. Under this agreement, the outstanding obligations of Smart amounted to Php200 million and Php188 million as at December 31, 2010 and 2009, respectively. |
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6. | Agreements Relating to Insurance Companies | ||
Gotuaco del Rosario and Associates, or Gotuaco, acts as the broker for certain insurance companies to cover certain insurable properties of the PLDT Group. Insurance premiums are remitted to Gotuaco and the broker’s fees are settled between Gotuaco and the insurance companies. In addition, PLDT has an insurance policy with Malayan Insurance Co., Inc., or Malayan, wherein premiums are directly paid to Malayan. Total insurance expenses under these agreements amounted to Php328 million, Php404 million and Php419 million for the years ended December 31, 2010, 2009 and 2008, respectively. Two directors of PLDT have direct/indirect interests in or serve as a director/officer of Gotuaco and Malayan. |
d. | Others | ||
SeeNote 18 — Prepaymentsfor other related party transactions. |
Compensation of Key Officers of the PLDT Group | ||
The compensation of key officers of the PLDT Group by benefit type for the years ended December 31, 2010, 2009 and 2008 are as follows: |
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Short-term employee benefits | 664 | 593 | 498 | |||||||||
Share-based payments and other long-term employee benefits (Note 25) | 277 | 418 | 233 | |||||||||
Post-employment benefits (Note 25) | 25 | 33 | 24 | |||||||||
Total compensation paid to key officers of the PLDT Group | 966 | 1,044 | 755 | |||||||||
In 2008, each of the directors, including the members of the advisory board of PLDT, is entitled to a director’s fee in the amount of Php125 thousand for each board meeting attended. Each of the members or advisors of the audit, executive compensation, governance and nomination and technology strategy committees is entitled to a fee in the amount of Php50 thousand for each committee meeting attended. | ||
On January 27, 2009, the Board of Directors of PLDT approved the increase in director’s fee to Php200 thousand for board meeting attendance and to Php75 thousand for Board Committee meeting attendance. The director’s fee was last adjusted in July 1998. | ||
There are no agreements between PLDT Group and any of its key management personnel providing for benefits upon termination of employment, except for such benefits to which they may be entitled under PLDT Group’s retirement and incentive plans. |
25. | Share-based Payments and Employee Benefits |
Share-based Payments | ||
On August 28, 2006, the PLDT’s Board of Directors approved, in principle, the broad outline of the PLDT Group’s strategic plans for 2007 to 2009 focusing on the development of new revenue streams to drive future growth while protecting the existing core communications business. To ensure the proper execution of the three-year plan, particularly with respect to the manpower resources being committed to such plans, 2007 to 2009 LTIP, upon endorsement of the ECC, was approved by the Board of Directors to cover the period from January 1, 2007 to December 31, 2009, or the 2007 to 2009 Performance Cycle. The payment under the 2007 to 2009 LTIP was intended to be made at the end of the 2007 to 2009 Performance Cycle (without interim payments) and contingent upon the achievement of an approved target increase in PLDT’s common share price by the end of the 2007 to 2009 Performance Cycle and a cumulative consolidated net income target for the 2007 to 2009 Performance Cycle. |
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The value of the reward and accrued as at December 31, 2009, was computed in accordance with the formula prescribed in 2007 to 2009 LTIP, subject to the minimum and maximum award level to be granted, following the terms and formula as described therein. The fair value of the 2007 to 2009 LTIP were estimated using an option pricing model, which considered annual stock volatility, risk-free interest rates, dividends yield, the remaining life of options and share price. The cost per share of the 2007 to 2009 LTIP, which amounted to Php1,029 as at December 31, 2009, was based on the computed minimum award level. The fair value of the 2007 to 2009 LTIP recognized as expense amounted to Php1,833 million and Php1,281 million for the years ended December 31, 2009 and 2008, respectively. The outstanding 2007 to 2009 LTIP liability of Php4,582 million as at December 31, 2009 was paid in April 2010. SeeNote 3 — Management’s Use of Judgments, Estimates and Assumptions, Note 5 — Income and Expenses, Note 23 — Accrued Expenses and Other Current Liabilities andNote 26 — Contractual Obligations and Commercial Commitments. | ||
Pension | ||
Defined Benefit Pension Plans | ||
We have defined benefit pension plans, covering substantially all of our permanent and regular employees, excluding those employees of Smart and its subsidiary, I-Contacts, which require contributions to be made to a separate administrative fund. | ||
Our actuarial valuation is performed every year-end. Based on the latest actuarial valuation, the actual present value of accrued (prepaid) benefit costs, net periodic benefit costs and average assumptions used in developing the valuation as at and for the years ended December 31, 2010, 2009 and 2008 are as follows: |
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Changes in present value of defined benefit obligations: | ||||||||||||
Present value of defined benefit obligations at beginning of year | 17,399 | 10,917 | 10,160 | |||||||||
Interest costs | 1,559 | 1,193 | 834 | |||||||||
Current service costs | 997 | 643 | 600 | |||||||||
Actuarial losses (gains) on obligations | (2,855 | ) | 4,720 | (101 | ) | |||||||
Liabilities of newly acquired subsidiaries | — | 19 | — | |||||||||
Actual benefits paid/settlements | (2,504 | ) | (93 | ) | (576 | ) | ||||||
Curtailment | 8 | — | — | |||||||||
Present value of defined benefit obligations at end of year | 14,604 | 17,399 | 10,917 | |||||||||
Changes in fair value of plan assets: | ||||||||||||
Fair value of plan assets at beginning of year | 19,980 | 7,168 | 8,519 | |||||||||
Actual contributions | (17 | ) | 8,866 | 914 | ||||||||
Expected return on plan assets | 2,340 | 673 | 865 | |||||||||
Actual benefits paid/settlements | (2,481 | ) | (93 | ) | (576 | ) | ||||||
Actuarial gains (losses) on plan assets | 179 | 3,366 | (2,554 | ) | ||||||||
Fair value of plan assets at end of year | 20,001 | 19,980 | 7,168 | |||||||||
Unfunded (surplus) status — net | (5,397 | ) | (2,581 | ) | 3,749 | |||||||
Unrecognized net actuarial gains (losses) (Note 3) | 479 | (2,474 | ) | (1,126 | ) | |||||||
(4,918 | ) | (5,055 | ) | 2,623 | ||||||||
Accrued benefit costs (Note 3) | 415 | 359 | 2,623 | |||||||||
Prepaid benefit costs (Notes 3 and 18) | 5,333 | 5,414 | — | |||||||||
Components of net periodic benefit costs: | ||||||||||||
Interest costs | 1,559 | 1,193 | 834 | |||||||||
Current service costs | 997 | 643 | 600 | |||||||||
Net actuarial losses (gains) recognized for the year | 23 | (3 | ) | (11 | ) | |||||||
Event gains — net | (62 | ) | — | — | ||||||||
Expected return on plan assets | (2,340 | ) | (673 | ) | (865 | ) | ||||||
Net periodic benefit costs (Notes 3 and 5) | 177 | 1,160 | 558 | |||||||||
Actual return on plan assets amounted to gain of Php2,519 million and Php4,036 million for the years ended December 31, 2010 and 2009, respectively, and loss of Php1,690 million for the year ended December 31, 2008. |
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2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
Present value of defined benefit obligation | 14,604 | 17,399 | 10,917 | 10,160 | 13,314 | |||||||||||||||
Fair value of assets | 20,001 | 19,980 | 7,168 | 8,519 | 5,768 | |||||||||||||||
Experience adjustment arising on: | ||||||||||||||||||||
Liability (gain) loss due to experience as percentage of defined benefit obligation | (1.43 | %) | 5.10 | % | (7.23 | %) | 0.05 | % | (1.61 | %) | ||||||||||
Asset (gain) loss due to experience as percentage of plan assets | 0.77 | % | 16.86 | % | (35.66 | %) | 14.01 | % | 5.96 | % | ||||||||||
2010 | 2009 | 2008 | ||||||||||
Average remaining working years of covered employee | 19 | 18 | 20 | |||||||||
Expected rate of return on plan assets | 11 | % | 12 | % | 9 | % | ||||||
Discount rate | 8 | % | 9 | % | 11 | % | ||||||
Rate of increase in compensation | 8 | % | 9 | % | 10 | % | ||||||
2010 | 2009 | 2008 | ||||||||||
Investments in listed and unlisted equity securities | 70 | % | 78 | % | 51 | % | ||||||
Temporary cash investments | 24 | % | 7 | % | 8 | % | ||||||
Investments in real estate | 3 | % | 5 | % | 9 | % | ||||||
Investments in debt and fixed income securities | 2 | % | 9 | % | 27 | % | ||||||
Investments in mutual funds | 1 | % | 1 | % | 5 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
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2010 | 2009 | 2008 | ||||||||||
Investments in debt and fixed income securities | 58 | % | 61 | % | 68 | % | ||||||
Investments in listed and unlisted equity securities | 37 | % | 34 | % | 23 | % | ||||||
Others | 5 | % | 5 | % | 9 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Expense recognized for defined benefit plans | 177 | 1,160 | 558 | |||||||||
Expense recognized for defined contribution plans | 59 | 146 | 167 | |||||||||
Total expense recognized for consolidated pension benefit costs (Notes 3 and 5) | 236 | 1,306 | 725 | |||||||||
(in million pesos) | ||||
Components of net periodic benefit costs: | ||||
Current service costs | 1,327 | |||
Interest costs | 28 | |||
Net actuarial loss | 37 | |||
Net periodic benefit costs | 1,392 | |||
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Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | 5 years | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||
Debt(1): | 113,394 | 6,569 | 51,308 | 33,978 | 21,539 | |||||||||||||||
Principal | 92,590 | 6,206 | 38,263 | 29,335 | 18,786 | |||||||||||||||
Interest | 20,804 | 363 | 13,045 | 4,643 | 2,753 | |||||||||||||||
Lease obligations: | 8,003 | 4,383 | 1,710 | 948 | 962 | |||||||||||||||
Operating lease | 7,959 | 4,353 | 1,697 | 947 | 962 | |||||||||||||||
Finance lease | 44 | 30 | 13 | 1 | — | |||||||||||||||
Unconditional purchase obligations(2) | 797 | 271 | 263 | 263 | — | |||||||||||||||
Other obligations: | 68,714 | 50,247 | 13,895 | 683 | �� | 3,889 | ||||||||||||||
Derivative financial liabilities(3): | 4,173 | — | 1,667 | 674 | 1,832 | |||||||||||||||
Long-term currency swaps | 4,173 | — | 1,667 | 674 | 1,832 | |||||||||||||||
Various trade and other obligations: | 64,541 | 50,247 | 12,228 | 9 | 2,057 | |||||||||||||||
Suppliers and contractors | 32,997 | 20,957 | 12,040 | — | — | |||||||||||||||
Utilities and related expenses | 16,477 | 16,446 | 10 | 3 | 18 | |||||||||||||||
Employee benefits | 3,853 | 3,853 | — | — | — | |||||||||||||||
Customers’ deposits | 2,223 | — | 178 | 6 | 2,039 | |||||||||||||||
Dividends | 2,086 | 2,086 | — | — | — | |||||||||||||||
Carriers | 1,866 | 1,866 | — | — | — | |||||||||||||||
Others | 5,039 | 5,039 | — | — | — | |||||||||||||||
Total contractual obligations | 190,908 | 61,470 | 67,176 | 35,872 | 26,390 | |||||||||||||||
December 31, 2009 | ||||||||||||||||||||
Debt(1): | 130,075 | 5,241 | 56,398 | 38,073 | 30,363 | |||||||||||||||
Principal | 102,587 | 4,876 | 40,226 | 31,953 | 25,532 | |||||||||||||||
Interest | 27,488 | 365 | 16,172 | 6,120 | 4,831 | |||||||||||||||
Lease obligations: | 7,564 | 3,778 | 1,956 | 994 | 836 | |||||||||||||||
Operating lease | 7,497 | 3,730 | 1,940 | 991 | 836 | |||||||||||||||
Finance lease | 67 | 48 | 16 | 3 | — | |||||||||||||||
Unconditional purchase obligations(2) | 834 | 137 | 279 | 279 | 139 | |||||||||||||||
Other obligations: | 64,456 | 44,322 | 15,528 | 826 | 3,780 | |||||||||||||||
Derivative financial liabilities(3): | 4,759 | — | 2,153 | 789 | 1,817 | |||||||||||||||
Long-term currency swaps | 4,759 | — | 2,153 | 789 | 1,817 | |||||||||||||||
Various trade and other obligations: | 59,697 | 44,322 | 13,375 | 37 | 1,963 | |||||||||||||||
Suppliers and contractors | 26,941 | 14,975 | 11,966 | — | — | |||||||||||||||
Utilities and related expenses | 14,737 | 14,687 | 18 | 5 | 27 | |||||||||||||||
Employee benefits | 8,082 | 8,082 | — | — | — | |||||||||||||||
Customers’ deposits | 2,166 | — | 198 | 32 | 1,936 | |||||||||||||||
Carriers | 1,937 | 1,937 | — | — | — | |||||||||||||||
Dividends | 1,749 | 1,749 | — | — | — | |||||||||||||||
Others | 4,085 | 2,892 | 1,193 | — | — | |||||||||||||||
Total contractual obligations | 202,929 | 53,478 | 74,161 | 40,172 | 35,118 | |||||||||||||||
(1) | Consists of notes payable and long-term debt, including current portion; gross of unamortized debt discount and debt issuance costs. | |
(2) | Based on the Amended ATPA with AIL. See Note 24 — Related Party Transactions. | |
(3) | Gross liabilities before any offsetting application. |
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(in million pesos) | ||||
Within one year | 4,469 | |||
After one year but not more than five years | 2,528 | |||
More than five years | 962 | |||
7,959 | ||||
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Fairvalue | Total | |||||||||||||||||||||||||||||||
Loans | Held-to- | through | Available-for- | Liabilities | financial | Non-financial | ||||||||||||||||||||||||||
and | maturity | profit or | sale financial | carried at | assets and | assets and | ||||||||||||||||||||||||||
receivables | investments | loss | assets | amortizedcost | liabilities | liabilities | Total | |||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||
Assets as at December 31, 2010 | ||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||
Property, plant and equipment | — | — | — | — | — | — | 163,184 | 163,184 | ||||||||||||||||||||||||
Investments in associates and joint ventures | — | — | — | — | — | — | 23,203 | 23,203 | ||||||||||||||||||||||||
Available-for-sale financial assets | — | — | — | 147 | — | 147 | — | 147 | ||||||||||||||||||||||||
Investment in debt securities | — | 484 | — | — | — | 484 | — | 484 | ||||||||||||||||||||||||
Investment properties | — | — | — | — | — | — | 1,560 | 1,560 | ||||||||||||||||||||||||
Goodwill and intangible assets | — | — | — | — | — | — | 11,485 | 11,485 | ||||||||||||||||||||||||
Deferred income tax assets — net | — | — | — | — | — | — | 6,110 | 6,110 | ||||||||||||||||||||||||
Derivative financial assets | — | — | 178 | — | — | 178 | — | 178 | ||||||||||||||||||||||||
Prepayments — net of current portion | — | — | — | — | — | — | 8,679 | 8,679 | ||||||||||||||||||||||||
Advances and refundable deposits — net of current portion | 984 | — | — | — | — | 984 | 203 | 1,187 | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 36,678 | — | — | — | — | 36,678 | — | 36,678 | ||||||||||||||||||||||||
Short-term investments | 152 | — | 517 | — | — | 669 | — | 669 | ||||||||||||||||||||||||
Trade and other receivables | 16,428 | — | — | — | — | 16,428 | — | 16,428 | ||||||||||||||||||||||||
Inventories and supplies | — | — | — | — | — | — | 2,219 | 2,219 | ||||||||||||||||||||||||
Derivative financial assets | — | — | 5 | — | — | 5 | — | 5 | ||||||||||||||||||||||||
Current portion of prepayments | — | — | — | — | — | — | 5,418 | 5,418 |
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Fair value | Total | |||||||||||||||||||||||||||||||
Loans | Held-to- | through | Available-for- | Liabilities | financial | Non-financial | ||||||||||||||||||||||||||
and | maturity | profit or | sale financial | carried at | assets and | assets and | ||||||||||||||||||||||||||
receivables | investments | loss | assets | amortizedcost | liabilities | liabilities | Total | |||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||
Current portion of advances and refundable deposits | 16 | — | — | — | — | 16 | 165 | 181 | ||||||||||||||||||||||||
Total assets | 54,258 | 484 | 700 | 147 | — | 55,589 | 222,226 | 277,815 | ||||||||||||||||||||||||
Liabilities as at December 31, 2010 | ||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||
Interest-bearing financial liabilities — net of current portion | — | — | — | — | 75,888 | 75,888 | — | 75,888 | ||||||||||||||||||||||||
Deferred income tax liabilities — net | — | — | — | — | — | — | 1,099 | 1,099 | ||||||||||||||||||||||||
Derivative financial liabilities | — | — | 3,604 | — | — | 3,604 | — | 3,604 | ||||||||||||||||||||||||
Pension and other employee benefits | — | — | — | — | — | — | 1,834 | 1,834 | ||||||||||||||||||||||||
Customers’ deposits | — | — | — | — | 2,223 | 2,223 | — | 2,223 | ||||||||||||||||||||||||
Deferred credits and other noncurrent liabilities | — | — | — | — | 12,041 | 12,041 | 1,526 | 13,567 | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||
Accounts payable | — | — | — | — | 23,673 | 23,673 | 2,131 | 25,804 | ||||||||||||||||||||||||
Accrued expenses and other current liabilities | — | — | — | — | 28,822 | 28,822 | 7,137 | 35,959 | ||||||||||||||||||||||||
Provision for assessments | — | — | — | — | — | — | 1,555 | 1,555 | ||||||||||||||||||||||||
Current portion of interest-bearing financial liabilities | — | — | — | — | 13,801 | 13,801 | — | 13,801 | ||||||||||||||||||||||||
Dividends payable | — | — | — | — | 2,086 | 2,086 | — | 2,086 | ||||||||||||||||||||||||
Income tax payable | — | — | — | — | — | — | 3,010 | 3,010 | ||||||||||||||||||||||||
Total liabilities | — | — | 3,604 | — | 158,534 | 162,138 | 18,292 | 180,430 | ||||||||||||||||||||||||
Net assets (liabilities) | 54,258 | 484 | (2,904 | ) | 147 | (158,534 | ) | (106,549 | ) | 203,934 | 97,385 | |||||||||||||||||||||
Assets as at December 31, 2009 | ||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||
Property, plant and equipment | — | — | — | — | — | — | 161,256 | 161,256 | ||||||||||||||||||||||||
Investments in associates and joint ventures | — | — | — | — | — | — | 22,233 | 22,233 | ||||||||||||||||||||||||
Available-for-sale financial assets | — | — | — | 134 | — | 134 | — | 134 | ||||||||||||||||||||||||
Investment in debt securities | — | 462 | — | — | — | 462 | — | 462 | ||||||||||||||||||||||||
Investment properties | — | — | — | — | — | — | 1,210 | 1,210 | ||||||||||||||||||||||||
Goodwill and intangible assets | — | — | — | — | — | — | 13,024 | 13,024 | ||||||||||||||||||||||||
Deferred income tax assets — net | — | — | — | — | — | — | 7,721 | 7,721 | ||||||||||||||||||||||||
Prepayments — net of current portion | — | — | — | — | — | — | 8,663 | 8,663 | ||||||||||||||||||||||||
Advances and refundable deposits — net of current portion | 842 | — | — | — | — | 842 | 260 | 1,102 | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 38,319 | — | — | — | — | 38,319 | — | 38,319 | ||||||||||||||||||||||||
Short-term investments | 3,338 | — | 486 | — | — | 3,824 | — | 3,824 | ||||||||||||||||||||||||
Trade and other receivables | 14,729 | — | — | — | — | 14,729 | — | 14,729 | ||||||||||||||||||||||||
Inventories and supplies | — | — | — | — | — | — | 2,165 | 2,165 | ||||||||||||||||||||||||
Derivative financial assets | — | — | 6 | — | — | 6 | — | 6 | ||||||||||||||||||||||||
Current portion of prepayments | — | — | — | — | — | — | 5,098 | 5,098 | ||||||||||||||||||||||||
Current portion of advances and refundable deposits | 7 | — | — | — | — | 7 | 195 | 202 | ||||||||||||||||||||||||
Total assets | 57,235 | 462 | 492 | 134 | — | 58,323 | 221,825 | 280,148 | ||||||||||||||||||||||||
Liabilities as at December 31, 2009 | ||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||
Interest-bearing financial liabilities — net of current portion | — | — | — | — | 86,079 | 86,079 | — | 86,079 | ||||||||||||||||||||||||
Deferred income tax liabilities — net | — | — | — | — | — | — | 1,321 | 1,321 | ||||||||||||||||||||||||
Derivative financial liabilities | — | — | 2,751 | — | — | 2,751 | — | 2,751 | ||||||||||||||||||||||||
Pension and other employee benefits | — | — | — | — | — | — | 374 | 374 | ||||||||||||||||||||||||
Customers’ deposits | — | — | — | — | 2,166 | 2,166 | — | 2,166 | ||||||||||||||||||||||||
Deferred credits and other noncurrent liabilities | — | — | — | — | 13,159 | 13,159 | 1,279 | 14,438 | ||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||
Accounts payable | — | — | — | — | 17,698 | 17,698 | 1,903 | 19,601 | ||||||||||||||||||||||||
Accrued expenses and other current liabilities | — | — | — | — | 28,752 | 28,752 | 6,694 | 35,446 | ||||||||||||||||||||||||
Provision for assessments | — | — | — | — | — | — | 1,555 | 1,555 | ||||||||||||||||||||||||
Current portion of interest-bearing financial liabilities | — | — | — | — | 12,714 | 12,714 | — | 12,714 | ||||||||||||||||||||||||
Dividends payable | — | — | — | — | 1,749 | 1,749 | — | 1,749 | ||||||||||||||||||||||||
Income tax payable | — | — | — | — | — | — | 2,829 | 2,829 | ||||||||||||||||||||||||
Total liabilities | — | — | 2,751 | — | 162,317 | 165,068 | 15,955 | 181,023 | ||||||||||||||||||||||||
Net assets (liabilities) | 57,235 | 462 | (2,259 | ) | 134 | (162,317 | ) | (106,745 | ) | 205,870 | 99,125 | |||||||||||||||||||||
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Carrying Value | Fair Value | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(in million pesos) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Available-for-sale financial assets: | ||||||||||||||||
Listed equity securities | 78 | 68 | 78 | 68 | ||||||||||||
Unlisted equity securities | 69 | 66 | 69 | 66 | ||||||||||||
Investment in debt securities | 484 | 462 | 502 | 474 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Long-term currency swap | 178 | — | 178 | — | ||||||||||||
Advances and refundable deposits — net of current portion | 984 | 842 | 915 | 732 | ||||||||||||
Total noncurrent financial assets | 1,793 | 1,438 | 1,742 | 1,340 | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash on hand and in banks | 2,906 | 3,300 | 2,906 | 3,300 | ||||||||||||
Temporary cash investments | 33,772 | 35,019 | 33,772 | 35,019 | ||||||||||||
Short-term investments | 669 | 3,824 | 669 | 3,824 | ||||||||||||
Trade and other receivables — net: | ||||||||||||||||
Foreign administrations | 4,321 | 4,064 | 4,321 | 4,064 | ||||||||||||
Retail subscribers | 3,872 | 3,546 | 3,872 | 3,546 | ||||||||||||
Corporate subscribers | 2,042 | 2,429 | 2,042 | 2,429 | ||||||||||||
Domestic carriers | 1,453 | 1,184 | 1,453 | 1,184 | ||||||||||||
Dealers, agents and others | 4,740 | 3,506 | 4,740 | 3,506 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Bifurcated embedded derivatives | 5 | 6 | 5 | 6 | ||||||||||||
Current portion of advances and refundable deposits | 16 | 7 | 16 | 7 | ||||||||||||
Total current financial assets | 53,796 | 56,885 | 53,796 | 56,885 | ||||||||||||
Total Financial Assets | 55,589 | 58,323 | 55,538 | 58,225 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities: | ||||||||||||||||
Long-term debt — net of current portion | 75,879 | 86,066 | 82,244 | 88,383 | ||||||||||||
Obligations under finance lease | 9 | 13 | 8 | 12 | ||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Long-term currency swap | 3,604 | 2,751 | 3,604 | 2,751 | ||||||||||||
Customers’ deposits | 2,223 | 2,166 | 1,701 | 1,375 | ||||||||||||
Deferred credits and other noncurrent liabilities | 12,041 | 13,159 | 11,457 | 11,629 | ||||||||||||
Total noncurrent financial liabilities | 93,756 | 104,155 | 99,014 | 104,150 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable: | ||||||||||||||||
Suppliers and contractors | 20,957 | 14,975 | 20,957 | 14,975 | ||||||||||||
Carriers | 1,866 | 1,937 | 1,866 | 1,937 | ||||||||||||
Related parties | 244 | 233 | 244 | 233 | ||||||||||||
Others | 606 | 553 | 606 | 553 | ||||||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||
Utilities and related expenses | 19,739 | 17,388 | 19,739 | 17,388 | ||||||||||||
Employee benefits | 3,852 | 8,071 | 3,852 | 8,071 | ||||||||||||
Interests and other related costs | 1,028 | 1,167 | 1,028 | 1,167 | ||||||||||||
Liability arising from purchase of investment | — | 65 | — | 65 | ||||||||||||
Others | 4,203 | 2,061 | 4,203 | 2,061 | ||||||||||||
Interest-bearing financial liabilities: | ||||||||||||||||
Current portion of long-term debt | 13,767 | 10,384 | 13,767 | 10,384 | ||||||||||||
Obligations under finance lease | 34 | 51 | 34 | 51 | ||||||||||||
Notes payable | — | 2,279 | — | 2,279 | ||||||||||||
Dividends payable | 2,086 | 1,749 | 2,086 | 1,749 | ||||||||||||
Total current financial liabilities | 68,382 | 60,913 | 68,382 | 60,913 | ||||||||||||
Total Financial Liabilities | 162,138 | 165,068 | 167,396 | 165,063 | ||||||||||||
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2010 | 2009 | |||||||||||||||||||||||
Level 1(1) | Level 2(2) | Total | Level 1(1) | Level 2(2) | Total | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||||||||||
Available-for-sale financial assets — Listed equity securities | 78 | — | 78 | 68 | — | 68 | ||||||||||||||||||
Derivative financial assets | — | 178 | 178 | — | — | — | ||||||||||||||||||
Current Financial Assets | ||||||||||||||||||||||||
Short-term investments | — | 517 | 517 | — | 486 | 486 | ||||||||||||||||||
Derivative financial assets | — | 5 | 5 | — | 6 | 6 | ||||||||||||||||||
Total | 78 | 700 | 778 | 68 | 492 | 560 | ||||||||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||||||||||
Derivative financial liabilities | — | 3,604 | 3,604 | — | 2,751 | 2,751 | ||||||||||||||||||
Total | — | 3,604 | 3,604 | — | 2,751 | 2,751 | ||||||||||||||||||
(1) | Fair values determined using observable market inputs that reflect quoted prices in active markets for identical assets or liabilities. | |
(2) | Fair values determined using inputs other than quoted prices that are either directly or indirectly observable for the assets or liabilities. |
Type | Fair Value Assumptions | |
Noncurrent portion of advances and refundable deposits | Estimated fair value is based on the discounted values of future cash flows using the applicable zero coupon rates plus credit spread. | |
Fixed rate loans: | ||
U.S. dollar notes Other loans in all other currencies | Quoted market price. Estimated fair value is based on the discounted value of future cash flows using the applicable Commercial Interest Reference Rate and Philippine Dealing System Treasury Fixing rates for similar types of loans. | |
Variable rate loans | The carrying value approximates fair value because of recent and regular repricing based on market conditions. | |
Customers’ deposits and deferred credits and other noncurrent liabilities | Estimated fair value is based on the discounted values of future cash flows using the applicable zero coupon rates plus credit spread. | |
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2010 | 2009 | |||||||||||||||||||
Mark-to- | ||||||||||||||||||||
Mark-to-market | market Gains | |||||||||||||||||||
Maturity | Notional | Gains (Losses) | Notional | (Losses) | ||||||||||||||||
(in millions) | ||||||||||||||||||||
PLDT | ||||||||||||||||||||
Currency swaps | 2017 | US$ | 222 | Php | (2,651 | ) | US$ | 245 | Php | (1,803 | ) | |||||||||
2012 | 100 | (953 | ) | 146 | (948 | ) | ||||||||||||||
2012 | 60 | (1) | 178 | — | — | |||||||||||||||
(3,426 | ) | (2,751 | ) | |||||||||||||||||
ePLDT | ||||||||||||||||||||
Bifurcated embedded derivatives | 2012 | 1 | 5 | 1 | 4 | |||||||||||||||
Smart | ||||||||||||||||||||
Bifurcated embedded derivatives | 2010 | — | — | — | 2 | |||||||||||||||
Net liabilities | Php | (3,421 | ) | Php | (2,745 | ) | ||||||||||||||
(1) | Overlay principal only swap agreements to effectively unwind a portion of the outstanding long-term principal only swap agreement maturing in 2012. |
2010 | 2009 | |||||||
(in million pesos) | ||||||||
Presented as: | ||||||||
Noncurrent assets | 178 | — | ||||||
Current assets | 5 | 6 | ||||||
Noncurrent liabilities | (3,604 | ) | (2,751 | ) | ||||
Net liabilities | (3,421 | ) | (2,745 | ) | ||||
2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Net mark-to-market losses at end of year | (3,421 | ) | (2,745 | ) | (1,792 | ) | ||||||
Net mark-to-market losses at beginning of year | (2,745 | ) | (1,792 | ) | (7,027 | ) | ||||||
Net change | (676 | ) | (953 | ) | 5,235 | |||||||
Hedge cost | (434 | ) | (599 | ) | (819 | ) | ||||||
Settlements, accretion and conversion | (631 | ) | 546 | (2,367 | ) | |||||||
Net losses on cash flow hedges charged to other comprehensive income | — | — | 662 | |||||||||
Effective portion recognized in the profit or loss for the cash flow hedge | — | — | 286 | |||||||||
Ineffective portion recognized in the profit or loss for the cash flow hedge | — | — | 118 | |||||||||
Net gains (losses) on derivative financial instruments (Note 4) | (1,741 | ) | (1,006 | ) | 3,115 | |||||||
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272
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273
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2010 | 2009 | |||||||||||||||
U.S. Dollar | Php(1) | U.S. Dollar | Php(2) | |||||||||||||
(in millions) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Note receivable | 2 | 84 | 2 | 81 | ||||||||||||
Derivative financial assets | 4 | 178 | — | — | ||||||||||||
Advances and refundable deposits | 1 | 38 | — | 7 | ||||||||||||
Total noncurrent financial assets | 7 | 300 | 2 | 88 | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents | 138 | 6,050 | 140 | 6,496 | ||||||||||||
Short-term investments | 15 | 652 | 47 | 2,164 | ||||||||||||
Trade and other receivables — net | 214 | 9,361 | 206 | 9,573 | ||||||||||||
Derivative financial assets | — | 5 | — | 6 | ||||||||||||
Total current financial assets | 367 | 16,068 | 393 | 18,239 | ||||||||||||
Total Financial Assets | 374 | 16,368 | 395 | 18,327 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities — net of current portion | 782 | 34,244 | 837 | 38,871 | ||||||||||||
Derivative financial liabilities | 82 | 3,604 | 59 | 2,751 | ||||||||||||
Total noncurrent financial liabilities | 864 | 37,848 | 896 | 41,622 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable | 169 | 7,415 | 155 | 7,180 | ||||||||||||
Accrued expenses and other current liabilities | 143 | 6,267 | 95 | 4,409 | ||||||||||||
Current portion of interest-bearing financial liabilities | 103 | 4,537 | 155 | 7,220 | ||||||||||||
Total current financial liabilities | 415 | 18,219 | 405 | 18,809 | ||||||||||||
Total Financial Liabilities | 1,279 | 56,067 | 1,301 | 60,431 | ||||||||||||
(1) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was Php43.81 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2010. | |
(2) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was Php46.43 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2009. |
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Cash in Bank | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 11 | — | — | — | — | 11 | 474 | — | 474 | 11 | 474 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0025% to 0.7840% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 31 | — | — | — | — | 31 | 1,362 | — | 1,362 | 31 | 1,362 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0625% to 2.9000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Other Currencies | 3 | — | — | — | — | 3 | 118 | — | 118 | 3 | 118 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0100% to 2.4000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 110 | — | — | — | — | 110 | 4,813 | — | 4,813 | 110 | 4,813 | |||||||||||||||||||||||||||||||||
Interest rate | 0.1000% to 1.7000% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 661 | — | — | — | — | 661 | 28,959 | — | 28,959 | 661 | 28,959 | |||||||||||||||||||||||||||||||||
Interest rate | 1.0000% to 4.8100% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 15 | — | — | — | — | 15 | 652 | — | 652 | 15 | 652 | |||||||||||||||||||||||||||||||||
Interest rate | 1.9000% to 10.672% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | — | — | — | — | — | 17 | — | 17 | — | 17 | |||||||||||||||||||||||||||||||||
Interest rate | 3.2500 | % | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | — | — | 8 | 3 | — | 11 | 484 | — | 484 | 11 | 502 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | 6.8750 | % | 7.0000 | % | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
831 | — | 8 | 3 | — | 842 | 36,879 | — | 36,879 | 842 | 36,897 | ||||||||||||||||||||||||||||||||||
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | — | 146 | — | — | 234 | 380 | 16,650 | 200 | 16,450 | 440 | 19,274 | |||||||||||||||||||||||||||||||||
Interest rate | — | 11.3750 | % | — | — | 8.3500 | % | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 9 | 29 | 15 | 295 | — | 348 | 15,264 | 2,586 | 12,678 | 276 | 12,120 | |||||||||||||||||||||||||||||||||
Interest rate | 4.7000 | % | 2.9900% to 3.7900 | % | 2.9900% to 3.7900 | % | 2.2500% to | |||||||||||||||||||||||||||||||||||||
2.9900 | % | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Philippine Peso | 68 | 146 | 121 | 339 | 195 | 869 | 38,066 | 74 | 37,992 | 961 | 42,091 | |||||||||||||||||||||||||||||||||
Interest rate | 6.0323% to 8.7792 | % | 5.6250% to 8.4346 | % | 6.5000% to 8.4346 | % | 6.5000% to 9.1038 | % | 6.5000% to 9.1038% | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 6 | 148 | 45 | 15 | — | 214 | 9,357 | 71 | 9,286 | 212 | 9,286 | |||||||||||||||||||||||||||||||||
Interest rate | US$ LIBOR + 0.8150% | Swap rate + 2.7900%; | Swap rate + 2.7900%; | Swap rate + 2.7900%; | ||||||||||||||||||||||||||||||||||||||||
US$ LIBOR + 0.4200% to 1.8500% | US$ LIBOR + 0.4200% | US$ LIBOR + 1.3500% | ||||||||||||||||||||||||||||||||||||||||||
to 1.8500% | to 1.8500% | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Philippine Peso | 58 | 150 | 74 | 20 | — | 302 | 13,253 | 13 | 13,240 | 302 | 13,240 | |||||||||||||||||||||||||||||||||
Interest rate | PDST-F + 0.3000% to | PDST-F + 0.3000% to 1.3750%; | ||||||||||||||||||||||||||||||||||||||||||
1.2500% | AUB’s prime rate | PDST-F + 0.3000 | % | PDST-F + 0.3000 | % | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
141 | 619 | 255 | 669 | 429 | 2,113 | 92,590 | 2,944 | 89,646 | 2,191 | 96,011 | ||||||||||||||||||||||||||||||||||
Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Cash in Bank | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 11 | — | — | — | — | 11 | 540 | — | 540 | 11 | 540 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0025% to 0.88 | % | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Philippine Peso | 36 | — | — | — | — | 36 | 1,673 | — | 1,673 | 36 | 1,673 | |||||||||||||||||||||||||||||||||
Interest rate | 0.625% to 2.90% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Other Currencies | 1 | — | — | — | — | 1 | 31 | — | 31 | 1 | 31 | |||||||||||||||||||||||||||||||||
Interest rate | 0.0014 to 2.40 | % | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 384 | — | — | — | — | 384 | 17,870 | — | 17,870 | 384 | 17,870 | |||||||||||||||||||||||||||||||||
Interest rate | 0.50% to 1.75% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 369 | — | — | — | — | 369 | 17,149 | — | 17,149 | 369 | 17,149 | |||||||||||||||||||||||||||||||||
Interest rate | 1.25% to 5.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 46 | — | — | — | — | 46 | 2,132 | — | 2,132 | 46 | 2,132 | |||||||||||||||||||||||||||||||||
Interest rate | 4.25% to 7.006% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 36 | — | — | — | — | 36 | 1,692 | — | 1,692 | 36 | 1,692 | |||||||||||||||||||||||||||||||||
Interest rate | 4.40 | % | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | — | — | — | 10 | — | 10 | 462 | — | 462 | 10 | 474 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | — | 6.92 | % | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
883 | — | — | 10 | — | 893 | 41,549 | — | 41,549 | 893 | 41,561 | ||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | — | — | 146 | — | 245 | 391 | 18,161 | 285 | 17,876 | 449 | 20,837 | |||||||||||||||||||||||||||||||||
Interest rate | — | — | 11.375 | % | — | 8.350 | % | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 14 | 27 | 5 | 285 | — | 331 | 15,397 | 3,338 | 12,059 | 229 | 10,654 | |||||||||||||||||||||||||||||||||
Interest rate | 4.515 | % | 3.79% to 4.70 | % | 3.79 | % | 2.25% to | |||||||||||||||||||||||||||||||||||||
3.79 | % | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Philippine Peso | — | 63 | 126 | 236 | 305 | 730 | 33,858 | 84 | 33,774 | 744 | 34,535 | |||||||||||||||||||||||||||||||||
Interest rate | — | 6.0323% to 8.4346 | % | 5.625% to 8.4346 | % | 6.125% to 9.1038 | % | 6.50% to | ||||||||||||||||||||||||||||||||||||
9.1038 | % | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 41 | 160 | 74 | 60 | — | 335 | 15,543 | 124 | 15,419 | 332 | 15,419 | |||||||||||||||||||||||||||||||||
Interest rate | US$ LIBOR + 0.05% to 2.5% | US$ LIBOR + 0.42% to 1.85%; | US$ LIBOR + 0.42% to 1.85%; | US$ LIBOR + 0.42% to 1.85%; | ||||||||||||||||||||||||||||||||||||||||
swap rate + 2.79% | swap rate + 2.79% | swap rate + 2.79% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Philippine Peso | — | 185 | 81 | 107 | — | 373 | 17,349 | 27 | 17,322 | 373 | 17,322 |
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Discount/ | ||||||||||||||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||||||||||||||
Issuance | Carrying | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
In U.S. Dollar | Cost | Value | In U.S. | |||||||||||||||||||||||||||||||||||||||||
Below 1 year | 1-2 years | 2-3 years | 3-5 years | Over 5 years | Total | In Php | In Php | In Php | Dollar | In Php | ||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate | PDST-F + 0.75% to | PDST-F + 1.0% to | PDST-F + | |||||||||||||||||||||||||||||||||||||||||
— | 1.5%; AUB’s prime rate | 1.50%; AUB’s prime rate | 1.0% to 1.50% | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Short-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 6 | — | — | — | — | 6 | 279 | — | 279 | 6 | 279 | |||||||||||||||||||||||||||||||||
Interest rate | 3.25 | % | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Philippine Peso | 43 | — | — | — | — | 43 | 2,000 | — | 2,000 | 43 | 2,000 | |||||||||||||||||||||||||||||||||
Interest rate | PDST-F + 1.5%; | |||||||||||||||||||||||||||||||||||||||||||
6.0896% | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
104 | 435 | 432 | 688 | 550 | 2,209 | 102,587 | 3,858 | 98,729 | 2,176 | 101,046 | ||||||||||||||||||||||||||||||||||
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Gross Maximum Exposure(1) | Net Maximum Exposure(2) | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(in million pesos) | ||||||||||||||||
Loans and receivables: | ||||||||||||||||
Advances and refundable deposits | 1,000 | 849 | 999 | 848 | ||||||||||||
Cash and cash equivalents | 36,678 | 38,319 | 36,458 | 38,101 | ||||||||||||
Short-term investments | 152 | 3,338 | 152 | 3,338 | ||||||||||||
Foreign administrations | 4,321 | 4,064 | 4,277 | 4,011 | ||||||||||||
Retail subscribers | 3,872 | 3,546 | 3,799 | 3,505 | ||||||||||||
Corporate subscribers | 2,042 | 2,429 | 1,918 | 2,328 | ||||||||||||
Domestic carriers | 1,453 | 1,184 | 1,453 | 1,184 | ||||||||||||
Dealers, agents and others | 4,740 | 3,506 | 4,740 | 3,506 | ||||||||||||
Held-to-maturity investments: | ||||||||||||||||
Investment in debt securities | 484 | 462 | 484 | 462 | ||||||||||||
Available-for-sale financial assets | 147 | 134 | 147 | 134 | ||||||||||||
Fair value through profit or loss: | ||||||||||||||||
Short-term investments | 517 | 486 | 517 | 486 | ||||||||||||
Long-term currency swap | 178 | — | 178 | — | ||||||||||||
Bifurcated embedded derivatives | 5 | 6 | 5 | 6 | ||||||||||||
Total | 55,589 | 58,323 | 55,127 | 57,909 | ||||||||||||
(1) | Gross financial assets before taking into account any collateral held or other credit enhancements or offsetting arrangements. | |
(2) | Gross financial assets after taking into account any collateral held or other credit enhancements or offsetting arrangements or deposit insurance. |
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Neither past due | ||||||||||||||||||||
nor impaired | Past due but | |||||||||||||||||||
Total | Class A(1) | Class B(2) | not impaired | Impaired | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 1,000 | 951 | 49 | — | — | |||||||||||||||
Cash and cash equivalents | 36,678 | 35,368 | 1,310 | — | — | |||||||||||||||
Short-term investments | 152 | 152 | — | — | — | |||||||||||||||
Retail subscribers | 8,917 | 946 | 926 | 2,000 | 5,045 | |||||||||||||||
Corporate subscribers | 7,998 | 393 | 612 | 1,037 | 5,956 | |||||||||||||||
Foreign administrations | 4,479 | 1,756 | 699 | 1,866 | 158 | |||||||||||||||
Domestic carriers | 1,591 | 191 | 23 | 1,239 | 138 | |||||||||||||||
Dealers, agents and others | 5,273 | 2,599 | 2,013 | 128 | 533 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 484 | 484 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 147 | 108 | 39 | — | — | |||||||||||||||
Fair value through profit or loss(3): | ||||||||||||||||||||
Short-term investments | 517 | 517 | — | — | — | |||||||||||||||
Long-term currency swap | 178 | 178 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 5 | 5 | — | — | — | |||||||||||||||
Total | 67,419 | 43,648 | 5,671 | 6,270 | 11,830 | |||||||||||||||
December 31, 2009 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 849 | 790 | 59 | — | — | |||||||||||||||
Cash and cash equivalents | 38,319 | 37,767 | 552 | — | — | |||||||||||||||
Short-term investments | 3,338 | 2,971 | 367 | — | — | |||||||||||||||
Corporate subscribers | 9,106 | 1,078 | 283 | 1,068 | 6,677 | |||||||||||||||
Retail subscribers | 8,026 | 1,236 | 518 | 1,792 | 4,480 | |||||||||||||||
Foreign administrations | 4,353 | 1,261 | 451 | 2,352 | 289 | |||||||||||||||
Domestic carriers | 1,267 | 157 | 8 | 1,019 | 83 | |||||||||||||||
Dealers, agents and others | 3,927 | 2,068 | 1,022 | 416 | 421 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 462 | 462 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 134 | 103 | 31 | — | — | |||||||||||||||
Fair value through profit or loss(3): | ||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | |||||||||||||||
Total | 70,273 | 48,385 | 3,291 | 6,647 | 11,950 | |||||||||||||||
(1) | This includes low risk and good paying customer accounts with no history of account treatment for a defined period and no overdue accounts as at report date; and deposits or placements to counterparties with good credit rating or bank standing financial review. | |
(2) | This includes medium risk and average paying customer accounts with no overdue accounts as at report date, and new customer accounts for which sufficient credit history has not been established; and deposits or placements to counterparties not classified as Class A. | |
(3) | Gross receivables from counterparties, before any offsetting arrangements. |
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Neither past due | Past due but not impaired | |||||||||||||||||||||||
Total | nor impaired | 1-60 days | 61-90 days | Over 91 days | Impaired | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
December 31, 2010 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 1,000 | 1,000 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 36,678 | 36,678 | — | — | — | — | ||||||||||||||||||
Short-term investments | 152 | 152 | — | — | — | — | ||||||||||||||||||
Retail subscribers | 8,917 | 1,872 | 1,387 | 150 | 463 | 5,045 | ||||||||||||||||||
Corporate subscribers | 7,998 | 1,005 | 642 | 159 | 236 | 5,956 | ||||||||||||||||||
Foreign administrations | 4,479 | 2,455 | 616 | 393 | 857 | 158 | ||||||||||||||||||
Domestic carriers | 1,591 | 214 | 165 | 182 | 892 | 138 | ||||||||||||||||||
Dealers, agents and others | 5,273 | 4,612 | 21 | 20 | 87 | 533 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 484 | 484 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 147 | 147 | — | — | — | — | ||||||||||||||||||
Fair value through profit or loss: | ||||||||||||||||||||||||
Short-term investments | 517 | 517 | — | — | — | — | ||||||||||||||||||
Long-term currency swap | 178 | 178 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 5 | 5 | — | — | — | — | ||||||||||||||||||
Total | 67,419 | 49,319 | 2,831 | 904 | 2,535 | 11,830 | ||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 849 | 849 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 38,319 | 38,319 | — | — | — | — | ||||||||||||||||||
Short-term investments | 3,338 | 3,338 | — | — | — | — | ||||||||||||||||||
Corporate subscribers | 9,106 | 1,361 | 433 | 198 | 437 | 6,677 | ||||||||||||||||||
Retail subscribers | 8,026 | 1,754 | 1,362 | 184 | 246 | 4,480 | ||||||||||||||||||
Foreign administrations | 4,353 | 1,712 | 1,320 | 405 | 627 | 289 | ||||||||||||||||||
Domestic carriers | 1,267 | 165 | 283 | 293 | 443 | 83 | ||||||||||||||||||
Dealers, agents and others | 3,927 | 3,090 | 332 | 21 | 63 | 421 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 462 | 462 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 134 | 134 | — | — | — | — | ||||||||||||||||||
Fair value through profit or loss: | ||||||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | — | ||||||||||||||||||
Total | 70,273 | 51,676 | 3,730 | 1,101 | 1,816 | 11,950 | ||||||||||||||||||
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2010 | 2009 | |||||||
(in million pesos) | ||||||||
Long-term debt, including current portion (Note 20) | 89,646 | 96,450 | ||||||
Notes payable (Note 20) | — | 2,279 | ||||||
Total consolidated debt | 89,646 | 98,729 | ||||||
Cash and cash equivalents (Note 15) | (36,678 | ) | (38,319 | ) | ||||
Short-term investments | (669 | ) | (3,824 | ) | ||||
Net consolidated debt | 52,299 | 56,586 | ||||||
Equity attributable to equity holders of PLDT | 97,069 | 98,575 | ||||||
Net consolidated debt to equity ratio | 54 | % | 57 | % | ||||
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2010 | 2009 | 2008 | ||||||||||
(in million pesos) | ||||||||||||
Transfer of Meralco shares to Beacon (Note 10) | �� | 15,083 | — | — | ||||||||
Recognition of asset retirement obligations (Note 21) | 49 | 17 | 70 | |||||||||
Conversion of preferred stock subject to mandatory redemption | — | 9 | 1,077 | |||||||||
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1(a). | Articles of Incorporation (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) | |
1(b). | By-Laws (as amended on August 3, 2010) (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission on March 29, 2011) | |
2. | We have not included as exhibits certain instruments with respect to our long-term debt, the amount of debt authorized under each of which does not exceed 10% of our total assets, and we agree to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. | |
4. | Material Contracts | |
6. | Computation of Earnings Per Share | |
7. | Calculation of Ratio of Earnings to Fixed Charges | |
8. | Subsidiaries | |
12.1 | Certification of Chief Executive Officer required by Rule 13a-14(a) of the Exchange Act | |
12.2 | Certification of the Principal Financial Officer required by Rule 13a-14(a) of the Exchange Act | |
13.1 | Certification of Chief Executive Officer required by Rule 13a-14(b) of the Exchange Act | |
13.2 | Certification of the Principal Financial Officer required by Rule 13a-14(b) of the Exchange Act |
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PHILIPPINE LONG DISTANCE TELEPHONE COMPANY | ||||
By: | /s/ Ma. Lourdes C. Rausa-Chan | |||
MA. LOURDES C. RAUSA-CHAN | ||||
Senior Vice President, Corporate Affairs and Legal Services Head and Corporate Secretary |
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Exhibit | ||
Number | Description of Exhibit | |
1(a) | Articles of Incorporation (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) | |
1(b) | Amended By-Laws (as amended on August 3, 2010) | |
2 | We have not included as exhibits certain instruments with respect to our long-term debt, the amount of debt authorized under each of which does not exceed 10% of our total assets, and we agree to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. | |
4(a) | Stock Purchase and Strategic Investment Agreement, dated September 28, 1999, by and among PLDT, First Pacific Limited, Metro Pacific Corporation, Metro Pacific Asia Link Holdings, Inc., Metro Pacific Resources, Inc. and NTT Communications Corporation (incorporated by reference to PLDT’s Form 6-K for the month of September 1999) | |
4(b) | Executive Stock Option Plan (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) | |
4(c) | Master Restructuring Agreement, dated June 21, 2000, as amended on December 12, 2000 and December 19, 2000, between PCEV, PCEV (Cayman) Limited, PLDT, The Chase Manhattan Bank, as escrow agent, Metropolitan Bank and Trust Company, as administrative agent and the creditors named therein (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in May 2001) | |
4(d) | The Cooperation Agreement, dated January 31, 2006, entered into by and among PLDT, First Pacific, Metro Pacific Corporation, Metro Asia Link Holdings, Inc., Metro Pacific Resources, Inc., Larouge B.V., Metro Pacific Assets Holdings, Inc., NTT Communications and NTT DoCoMo (incorporated by reference to Schedule 13D/A (Amendment No.2) as filed with the United States Securities and Exchange Commission by Nippon Telegraph and Telephone Corporation and NTT Communications Corporation on January 31, 2006) | |
6 | Computation of Earnings Per Share | |
7 | Calculation of Ratio of Earnings to Fixed Charges | |
8 | Subsidiaries | |
12.1 | Certification of Chief Executive Officer required by Rule 13a-14(a) of the Exchange Act | |
12.2 | Certification of the Principal Financial Officer required by Rule 13a-14(a) of the Exchange Act | |
13.1 | Certification of Chief Executive Officer required by Rule 13a-14(b) of the Exchange Act | |
13.2 | Certification of the Principal Financial Officer required by Rule 13a-14(b) of the Exchange Act |
285