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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
(Address of principal executive offices)
Ramon Cojuangco Bldg., Makati Avenue, Makati City, Philippines
(Name, telephone, e-mail and/or facsimile number and address of Company contact person)
Title of each class | Name of each exchange 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 pursuant to the requirements of such stock exchange. |
11.375% Notes due 2012
8.350% Notes due 2017
Large Accelerated Filerþ | Accelerated Filero | Non-Accelerated Filero |
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CERTIFICATION | ||||||||
Exhibit 6 | ||||||||
Exhibit 7 | ||||||||
Exhibit 8 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 13.2 |
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• | 3rd Brand means 3rd Brand Pte. Ltd., an 85%-owned subsidiary of SCH; |
• | ACeS Philippines means ACeS Philippines Cellular Satellite Corporation, a wholly-owned subsidiary of PLDT; |
• | 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; |
• | BTS means base transceiver station; |
• | BayanTrade means BayanTrade, Inc. (formerly BayanTrade Dotcom, Inc.), a 93.5%-owned subsidiary of ePLDT; |
• | BCC means Bonifacio Communications Corporation, a 75%-owned subsidiary of PLDT; |
• | BSP means Bangko Sentral ng Pilipinas; |
• | ClarkTel means PLDT Clark Telecom, Inc., a wholly-owned subsidiary of PLDT; |
• | CMTS means cellular mobile telephone system; |
• | CPCN means Certificate of Public Convenience and Necessity; |
• | CURE means Connectivity Unlimited Resource Enterprise, a wholly-owned subsidiary of FHI; |
• | CyMed means CyMed, Inc., a wholly-owned subsidiary of SPi; |
• | DigiPar Thailand means Digital Paradise Thailand, an 87.5%-owned subsidiary of ePLDT; |
• | Digital Paradise means Digital Paradise, Inc., a 75%-owned subsidiary of ePLDT; |
• | Digitel means Digital Telecommunications Philippines, Inc.; |
• | DSL means digital subscriber line; |
• | ePLDT means ePLDT, Inc., a wholly-owned subsidiary of PLDT; |
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• | ePLDT Ventus means the umbrella brand name for ePLDT’s customer interaction solutions, including Ventus, Vocativ and Parlance; |
• | First Pacific means First Pacific Company Limited; |
• | First Pacific Group means First Pacific and its Philippine and other 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.; |
• | GSM means global system for mobile communications; |
• | I-Contacts means I-Contacts Corporation, a wholly-owned subsidiary of Smart; |
• | 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; |
• | Level Up! means Level Up! (Philippines), Inc., a 60%-owned subsidiary of ePLDT; |
• | Mabuhay Satellite means Mabuhay Satellite Corporation, a 67%-owned subsidiary of PLDT; |
• | Maratel means PLDT-Maratel, Inc., a 97.8%-owned subsidiary of PLDT; |
• | Meralco means Manila Electric Company; |
• | MPRI means Metro Pacific Resources, Inc.; |
• | netGames means netGames, Inc., an 80%-owned subsidiary of ePLDT; |
• | 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; |
• | PAPTELCO means Philippine Association of Private Telephone Companies, Inc.; |
• | Parlance means Parlance Systems, Inc., a wholly-owned subsidiary of ePLDT; |
• | PFRS means Philippine Financial Reporting Standards; |
• | PHC means PH Communications Holdings Corporation, a wholly-owned subsidiary of Smart; |
• | Philcom means PLDT-Philcom, Inc. (formerly Philcom Corporation), a wholly-owned subsidiary of PLDT; |
• | Philippine SEC means the Philippine Securities and Exchange Commission; |
• | Piltel means Pilipino Telephone Corporation, a 99.5%-owned subsidiary of Smart; |
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• | 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; |
• | PSE means the Philippine Stock Exchange; |
• | 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; |
• | SMS means short messaging service; |
• | SNMI means Smart-NTT Multimedia, Inc., a wholly-owned subsidiary of PLDT; |
• | SPi means SPi Technologies, Inc., a wholly-owned subsidiary of ePLDT; |
• | SPi Group means SPi and its subsidiaries; |
• | Springfield means Springfield Service Corp., a wholly-owned subsidiary of SPi; |
• | SRC means Securities and Regulation Code; |
• | SubicTel means PLDT Subic Telecom, Inc., a wholly-owned subsidiary of PLDT; |
• | TSI means Telecoms Solutions, Inc., a wholly-owned subsidiary of SMHC; |
• | U.S. SEC means the U.S. Securities and Exchange Commission; |
• | VAS means value-added service; |
• | VAT means value-added tax; |
• | Ventus means ePLDT Ventus, Inc., a wholly-owned subsidiary of ePLDT; |
• | Vocativ means Vocativ Systems, Inc., a wholly-owned subsidiary of ePLDT; |
• | WAP means wireless application protocol; |
• | WCI means Wireless Card, Inc., a wholly-owned subsidiary of Smart; |
• | W-CDMA means wireless-code division multiple access; and |
• | Wolfpac means Wolfpac Mobile, Inc., a wholly-owned subsidiary of Smart. |
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2009(1) | 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$ | 3,188 | Php | 147,993 | Php | 145,837 | Php | 138,704 | Php | 127,508 | ||||||||||
Service revenues | 3,137 | 145,647 | 142,873 | 135,478 | 124,988 | |||||||||||||||
Non-service revenues | 51 | 2,346 | 2,964 | 3,226 | 2,520 | |||||||||||||||
Expenses | 1,941 | 90,111 | 85,786 | 83,587 | 82,003 | |||||||||||||||
Net income(2) | 864 | 40,095 | 34,976 | 39,274 | 32,581 | |||||||||||||||
Earnings per common share for the year attributable to equity holders of PLDT | ||||||||||||||||||||
Basic | 4.53 | 210.38 | 179.96 | 205.84 | 173.10 | |||||||||||||||
Diluted | 4.53 | 210.36 | 179.95 | 204.88 | 173.01 | |||||||||||||||
Balance Sheets Data: | ||||||||||||||||||||
Cash and cash equivalents | 825 | 38,319 | 33,684 | 17,447 | 16,870 | |||||||||||||||
Total assets | 6,034 | 280,148 | 252,558 | 240,158 | 241,904 | |||||||||||||||
Total long-term debt — net of current portion | 1,854 | 86,066 | 58,899 | 53,372 | 63,769 | |||||||||||||||
Total debt(3) | 2,127 | 98,729 | 73,911 | 60,640 | 80,154 | |||||||||||||||
Total liabilities(4) | 3,899 | 181,023 | 145,589 | 127,813 | 139,052 | |||||||||||||||
Total equity(2) | 2,135 | 99,125 | 106,969 | 112,345 | 102,853 | |||||||||||||||
Weighted average number of common shares for the year | 186,916 | 186,916 | 188,163 | 188,656 | 184,456 | |||||||||||||||
Other Data: | ||||||||||||||||||||
Depreciation and amortization | 552 | 25,607 | 24,709 | 28,613 | 31,869 | |||||||||||||||
Ratio of earnings to fixed charges(5) | 7.7 | x | 7.7 | x | 8.0 | x | 8.3 | x | 4.6 | x | ||||||||||
Net cash provided by operating activities | 1,602 | 74,386 | 78,302 | 77,418 | 69,211 | |||||||||||||||
Net cash used in investing activities | 1,058 | 49,132 | 17,014 | 31,319 | 35,790 | |||||||||||||||
Net cash used in financing activities | 437 | 20,293 | 45,464 | 44,819 | 45,900 | |||||||||||||||
Dividends declared to common shareholders | 835 | 38,758 | 36,578 | 28,299 | 14,459 | |||||||||||||||
Dividends declared per common share | 4.46 | 207.00 | 194.00 | 150.00 | 78.00 |
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(in millions, except operating income per share amounts, earnings per common share amounts, | ||||
ratio of earnings to fixed charges and dividends declared per common share amounts) | 2005 | |||
Statements of Operating Data: | ||||
Revenues | Php | 123,335 | ||
Service revenues | 120,348 | |||
Non-service revenues | 2,987 | |||
Expenses | 74,821 | |||
Operating income per share | ||||
Basic | 263.81 | |||
Diluted | 255.15 | |||
Net income | 40,603 | |||
Earnings per common share | ||||
Basic | 217.84 | |||
Diluted | 211.93 | |||
Balance Sheets Data: | ||||
Cash and cash equivalents | 30,059 | |||
Total assets | 269,709 | |||
Total long-term debt — net of current portion | 93,516 | |||
Total debt(3) | 112,313 | |||
Total liabilities(4) | 176,980 | |||
Total stockholders’ equity | 79,595 | |||
Other Data: | ||||
Depreciation and amortization | 27,855 | |||
Ratio of earnings to fixed charges(5) | 5.9 | x | ||
Net cash provided by operating activities | 66,280 | |||
Net cash used in investing activities | 13,080 | |||
Net cash used in financing activities | 49,470 | |||
Dividends declared to common shareholders | 9,624 | |||
Dividends declared per common share | 56.00 |
(1) | The PLDT Group presentation currency is the Philippine peso. For convenience, the peso financial information as at and for the year ended December 31, 2009, has been translated into U.S. dollars at the exchange rate of Php46.43 to US$1.00, the rate quoted through the Philippine Dealing System as at December 31, 2009. 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) | Net income and total equity under IFRS includes the proportional share of non-controlling interests in consolidated net income and consolidated net assets, respectively. Under U.S. GAAP, net income and total equity does not include the proportional share of minority interests in net income and total equity and such minority interests are instead presented separately in the consolidated financial statements. | |
(3) | Total debt represents current portion of long-term debt, long-term debt — net of current portion and notes payable. | |
(4) | Total liabilities on a consolidated basis in 2009, 2008, 2007 and 2006 under IFRS represent the sum of current and noncurrent liabilities. Total liabilities on a consolidated basis in 2005 under U.S. GAAP represent the difference between total assets and non-controlling interests in consolidated subsidiaries, preferred stock subject to mandatory redemption and equity attributable to equity holders of PLDT. | |
(5) | 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 expensed 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, | ||||||||
2009 | 2008 | |||||||
(in millions) | ||||||||
Serial Preferred Stock | ||||||||
10% Cumulative Convertible Preferred Stock | ||||||||
A to EE | Php | 4,056.31 | Php | 4,054.81 | ||||
Convertible Preferred Stock Subject to Mandatory Redemption | ||||||||
Series V(1) | — | 0.01 | ||||||
Series VI(1) | — | 0.04 | ||||||
Cumulative Non-convertible Redeemable Preferred Stock | ||||||||
Series IV | 360.00 | 360.00 | ||||||
Php | 4,416.31 | Php | 4,414.86 | |||||
Common Stock | Php | 947.40 | Php | 947.28 | ||||
(1) | Preferred stock subject to mandatory redemption (see Note 20 — Interest-bearing Financial Liabilities — Preferred Stock Subject to Mandatory Redemption to the accompanying consolidated financial statements in Item 18 for further discussion). |
Date | Amount | |||||||||||||
Earnings | Approved | Record | Payable | Per share | Total Declared | |||||||||
(in millions) | ||||||||||||||
2007 | August 7, 2007 | August 24, 2007 | September 24, 2007 | Php | 60 | Php | 11,322 | |||||||
2007 | March 4, 2008 | March 19, 2008 | April 21, 2008 | 68 | 12,853 | |||||||||
2007 | March 4, 2008 | March 19, 2008 | April 21, 2008 | 56 | 10,585 | |||||||||
184 | 34,760 | |||||||||||||
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 | |||||||||
Php | 218 | Php | 40,723 | |||||||||||
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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 | 141.00 | 3.06 | ||||||
Regular Dividend — April 20, 2010 | 76.00 | 1.71 | ||||||
Special Dividend — April 20, 2010 | 65.00 | 1.46 |
Year Ended December 31, | ||||||||||||||||
Period End | Average(1) | High(2) | Low(3) | |||||||||||||
2005 | Php | 53.06 | Php | 55.01 | Php | 53.06 | Php | 56.32 | ||||||||
2006 | 49.05 | 51.17 | 49.05 | 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 (through May 12, 2010) | 45.09 | 45.63 | 44.18 | 46.74 |
(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. |
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Month | ||||||||||||||||
Period End | Average(1) | High(2) | Low(3) | |||||||||||||
2009 | ||||||||||||||||
November | Php | 47.13 | Php | 47.01 | Php | 46.52 | Php | 47.69 | ||||||||
December | 46.43 | 46.38 | 45.95 | 46.99 | ||||||||||||
2010 | ||||||||||||||||
January | 46.65 | 46.04 | 45.54 | 46.74 | ||||||||||||
February | 46.16 | 46.29 | 45.97 | 46.61 | ||||||||||||
March | 45.29 | 45.71 | 45.22 | 46.10 | ||||||||||||
April | 44.51 | 44.59 | 44.18 | 45.04 | ||||||||||||
May (through May 12, 2010) | 45.09 | 45.11 | 44.54 | 45.72 |
(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. |
• | increased competition from other domestic and international telecommunications providers; |
• | advances in technology; |
• | alternative providers offering internet telephony, also known as Voice over Internet Protocol, or 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; |
• | 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. |
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• | NTT DoCoMo is entitled to nominate one additional NTT DoCoMo nominee to the board of directors of each of PLDT and Smart; |
• | 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. |
• | shortages of equipment, materials and labor; |
• | work stoppages and labor disputes; |
• | interruptions resulting from inclement weather and other natural disasters; |
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• | 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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2009 | 2008 | |||||||||||||||||||
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 System, Inc., or PDSI | Philippines | Cellular and internet broadband distribution services | — | 100.0 | — | — | ||||||||||||||
I-Contacts Corporation, or I-Contacts | Philippines | Customer interaction solutions | — | 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 | Development and sale of software, 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 | — | 100.0 | — | — | ||||||||||||||
Pilipino Telephone Corporation, or Piltel,* and Subsidiaries, or Piltel Group | Philippines | Investment company | — | 99.5 | — | 92.5 | ||||||||||||||
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 | — | 28.3 | ||||||||||||||
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 | — |
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2009 | 2008 | |||||||||||||||||||
Place of | Percentage of Ownership | |||||||||||||||||||
Name of Subsidiary | Incorporation | Principal Business Activity | Direct | Indirect | Direct | Indirect | ||||||||||||||
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 | — | — | — | ||||||||||||||
PLDT-Maratel, Inc., or Maratel | Philippines | Telecommunications services | 97.8 | — | 97.5 | — | ||||||||||||||
Bonifacio Communications Corporation, or BCC | Philippines | Telecommunications, infrastructure and related value-added services | 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 interaction solutions 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 | ||||||||||||||
ePLDT Ventus, Inc., or Ventus | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Vocativ Systems, Inc., or Vocativ | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Parlance Systems, Inc., or Parlance | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Infocom Technologies, Inc., or Infocom | Philippines | Internet access 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 | — | 10.8 | ||||||||||||||
Digital Paradise Thailand, or DigiPar Thailand | Thailand | Internet access services | — | 87.5 | — | 87.5 | ||||||||||||||
netGames, Inc., or netGames | Philippines | Publisher of online games | — | 80.0 | — | 80.0 | ||||||||||||||
Digital Paradise, Inc., or Digital Paradise | Philippines | Internet access services | — | 75.0 | — | 75.0 | ||||||||||||||
Level Up! (Philippines), Inc., or Level Up! | Philippines | Publisher of online games | — | 60.0 | — | 60.0 |
* | On August 17, 2009, Smart acquired the cellular mobile telephone business of Piltel. |
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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 value for money brand. |
• | Leading Market Shares. With over 44 million fixed line, cellular and broadband subscribers as at December 31, 2009, 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 2009. Revenue sources of our wireless business segment 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 interaction solutions and internet and online gaming business, and data center and other services. Fixed line revenues, which represented 32%, 32% and 33% of our consolidated revenues in 2009, 2008, and 2007, respectively, have been declining over the past years as a share of our total revenues due to pressures on traditional fixed line voice revenues, resulting from decreases in our local exchange, international long distance and national long distance services, and reduced international interconnection rates. 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 one of 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. In addition, we continue our upgrade to NGN and our roll out of 3G and wireless broadband in order to increase broadband subscribers, and expand our data/broadband capabilities. |
• | Innovative Products and Services. We have successfully introduced a number of innovative and award-winning cellular products and services, includingSmart 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 Textsubscribers. |
• | 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 service provider 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. We plan to build on our position as the leading wireless service provider in the Philippines by continuing to introduce new products and services 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. Our operating target is to continue growth in profitability by increasing our revenues while controlling our costs. |
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• | 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 segment — 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 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. While as at December 31, 2009 our consolidated debt outstanding increased to Php98,729 million (approximately US$2,127 million) in connection with the financing of our acquisition of shares of Meralco and our increased capital expenditures, our consolidated ratio of debt to equity was 1.0x at December 31, 2009. 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 70% in 2007 and 100% in each of 2008 and 2009 of our earnings per share on an adjusted basis. 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. |
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2009 | 2008 | 2007 | ||||||||||
Systemwide cellular subscriber base | 41,328,641 | 35,224,604 | 30,041,030 | |||||||||
Smart | 24,198,357 | 20,899,753 | 20,339,204 | |||||||||
Prepaid | 23,762,814 | 20,501,617 | 19,997,324 | |||||||||
Postpaid | 435,543 | 398,136 | 341,880 | |||||||||
Talk ‘N Text(1) | 17,050,713 | 14,308,493 | 9,701,826 | |||||||||
Red Mobile(2) | 79,571 | 16,358 | — | |||||||||
Growth rate of cellular subscribers | 17 | % | 17 | % | 24 | % | ||||||
Smart | 16 | % | 3 | % | 18 | % | ||||||
Talk ‘N Text(1) | 19 | % | 47 | % | 39 | % | ||||||
Red Mobile(2) | 386 | % | 100 | % | — | |||||||
Cellular revenues (in millions) | Php | 88,410 | Php | 87,518 | Php | 82,334 | ||||||
Voice | 38,850 | 37,275 | 36,105 | |||||||||
Data | 47,072 | 47,804 | 44,092 | |||||||||
Others(3) | 2,488 | 2,439 | 2,137 | |||||||||
Percentage of cellular revenues to total wireless service revenues | 92 | % | 94 | % | 95 | % | ||||||
Percentage of cellular revenues to total service revenues | 61 | % | 61 | % | 60 | % |
(1) | The transfer of Piltel’s cellular business to Smart was completed on August 17, 2009. | |
(2) | The Red Mobile brand was launched in November 2008 by CURE. | |
(3) | Refers to other non-subscriber-related revenues consisting primarily of inbound international roaming fees, revenues from Smart’s public calling offices and a small number of leased line contracts, revenues from Wolfpac and other Smart subsidiaries, and revenue share in PLDT’s WeRoam and PLDT Landline Plus services. |
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• | Smart Money,launched in conjunction with MasterCard, enables subscribers to pay for their purchases by transferring money from their bank accounts to their Smart Money cards, reload their prepaid cards electronically, as well as download specialized content such as ringtones, logos, caller ringback tunes and games; |
• | Mobile Banking, launched in collaboration with various banks, allows subscribers to execute banking transactions such as balance inquiries and transfers over their mobile telephones; and |
• | Smart Padala, one of the many innovative initiatives from ourSmart Moneyplatform, is the first cash remittance service through text and is faster and cheaper than traditional remittance arrangements. It was launched initially as an international remittance service for overseas Filipino workers but is now available for domestic remittances as well. |
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2009 | 2008 | 2007 | ||||||||||
Number of local exchange line subscribers | 1,816,541 | 1,782,356 | 1,724,702 | |||||||||
Number of fixed line employees | 7,947 | 7,813 | 8,080 | |||||||||
Number of local exchange line subscribers per employee | 229 | 228 | 213 | |||||||||
Total local exchange service revenues (in millions) | Php | 15,681 | Php | 15,923 | Php | 16,205 | ||||||
Local exchange service revenues as a percentage of total fixed line service revenues | 31 | % | 32 | % | 33 | % | ||||||
Local exchange service revenues as a percentage of total service revenues | 10 | % | 10 | % | 11 | % |
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2009 | 2008 | 2007 | ||||||||||
Total call volumes (in million minutes) | 1,863 | 2,024 | 2,280 | |||||||||
Inbound call volumes (in million minutes) | 1,653 | 1,786 | 2,007 | |||||||||
Outbound call volumes (in million minutes) | 210 | 238 | 273 | |||||||||
Inbound-outbound call ratio | 7.9:1 | 7.5:1 | 7.4:1 | |||||||||
Total international long distance service revenues (in millions) | Php | 6,255 | Php | 7,063 | Php | 8,674 | ||||||
International long distance service revenues as a percentage of total fixed line service revenues | 12 | % | 14 | % | 18 | % | ||||||
International long distance service revenues as a percentage of total service revenues | 4 | % | 5 | % | 6 | % |
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Net Settlement | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(in millions) | ||||||||||||
Saudi Arabia | US$ | 33 | US$ | 30 | US$ | 28 | ||||||
United States | 25 | 46 | 55 | |||||||||
United Arab Emirates | 20 | 20 | 18 | |||||||||
Japan | 17 | 14 | 12 | |||||||||
Canada | 9 | 9 | 17 | |||||||||
Hongkong | 8 | 4 | 7 | |||||||||
Taiwan | 6 | 6 | 6 | |||||||||
Singapore | 5 | 5 | 3 | |||||||||
Qatar | 5 | 4 | 3 | |||||||||
Others | 29 | 36 | 47 | |||||||||
Total | US$ | 157 | US$ | 174 | US$ | 196 | ||||||
2009 | 2008 | 2007 | ||||||||||
Total call volumes (in million minutes) | 1,822 | 1,944 | 2,183 | |||||||||
Total national long distance service revenues (in millions) | Php | 5,969 | Php | 6,207 | Php | 6,338 | ||||||
National long distance service revenue as a percentage of total fixed line service revenues | 12 | % | 13 | % | 13 | % | ||||||
National long distance service revenue as a percentage of total service revenues | 4 | % | 4 | % | 4 | % |
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2009 | 2008 | 2007 | ||||||||||
Number ofDSLbroadband subscribers | 559,664 | 432,583 | 264,291 | |||||||||
Total data and other network service revenues (in millions) | Php | 21,567 | Php | 18,607 | Php | 15,921 | ||||||
Data and other network service revenues as a percentage of total fixed line service revenues | 42 | % | 38 | % | 33 | % | ||||||
Data and other network service revenues as a percentage of total service revenues | 14 | % | 12 | % | 11 | % |
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Cable System | Countries Being Linked | |
G-P | Guam and the Philippines | |
Asia-Pacific Cable Network | Korea, Japan, Hong Kong, Taiwan, Australia, Philippines, Singapore, Malaysia, Indonesia and Thailand | |
Asia-Pacific Cable Network 2 | Philippines, Hong Kong, Japan, Korea, Malaysia, Singapore, China and Taiwan | |
Transpacific Cable No. 5 | Guam, Japan, Hawaii and the U.S. Mainland | |
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 | |||||
Piltel(1) | AMPS/CDMA | 824-825/869-870 MHz | 1.0 MHz | |||
845-846.5/890-891.5 MHz | 1.5 MHz | |||||
SBI | Wireless broadband | 2670-2690 MHz(2) | 20.0 MHz | |||
2400-2483.5 MHz(2) | 73.0 MHz | |||||
3400-3590 MHz(2) | 94.0 MHz | |||||
5470-5850 MHz(2) | 123.0 MHz | |||||
CURE | 3G | 1955-1965/2145-2155 MHz | 10.0 MHz | |||
PDSI | BWA (WiMAX) | 2340-2370 MHz | 30.0 MHz |
(1) | On January 8, 2010, the NTC approved the transfer of Piltel’s CPCN to SBI. | |
(2) | SBI frequency assignments on these bands are non-contiguous and are on a per station and location basis. |
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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 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, prohibiting 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. |
• | The six second per pulse billing scheme is expected to have a negative impact on Smart’s revenue, profit and ARPU as this is expected to decrease the amount of time billed per call as a result of moving to shorter billing intervals of six seconds from the previous one minute. |
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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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• | 68% consisted of cable, wire and cellular facilities, including our domestic fiber optic network, subscriber cable facilities, inter-office trunking and toll cable facilities and cellular facilities; |
• | 15% consisted of central office equipment, including five international gateway facilities, six pure national toll exchanges and 15 combined local and toll exchanges, and our communications satellite; |
• | 11% 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 by Smart, Piltel (on August 17, 2009, Smart acquired the cellular business of Piltel) and CURE, our cellular service providers; SBI, BOW, Airborne Access and PDSI, our wireless broadband service providers; Wolfpac and Chikka Group, our wireless content operator; Mabuhay Satellite and ACeS Philippines, our satellite operators; |
• | Fixed Line— fixed line telecommunications services primarily provided through PLDT. We also provide fixed line services through PLDT’s subsidiaries, namely, ClarkTel, Subictel, Philcom, Maratel, SBI, PDSI, BCC and PLDT Global, all of which account for approximately 4% of our consolidated fixed line subscribers; and |
• | Information and Communications Technology— information and communications infrastructure and services for internet applications, IP-based solutions and multimedia content delivery provided by ePLDT and BayanTrade Group; knowledge processing solutions provided by the SPi Group; customer interaction solutions provided under the umbrella brand nameePLDT Ventus, through Ventus, Parlance and Vocativ; 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 inNote 10 — Investments in Associates and Joint Venturesto the accompanying consolidated financial statements in Item 18. |
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in millions) | ||||||||||||||||||||
For the year ended December 31, 2009 | ||||||||||||||||||||
Revenues | Php | 97,524 | Php | 51,373 | Php | 11,549 | Php | (12,453 | ) | Php | 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 | |||||||||||||||
Net income | 33,727 | 5,864 | 504 | — | 40,095 | |||||||||||||||
Net income attributable to equity holders of PLDT | 33,394 | 5,854 | 533 | — | 39,781 | |||||||||||||||
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 | |||||||||||||
Net income (loss) | 29,499 | 7,732 | (2,186 | ) | (69 | ) | 34,976 | |||||||||||||
Net income (loss) attributable to equity holders of PLDT | 28,628 | 7,727 | (1,969 | ) | (69 | ) | 34,317 | |||||||||||||
For the year ended December 31, 2007 | ||||||||||||||||||||
Revenues | 89,299 | 48,832 | 10,322 | (9,749 | ) | 138,704 | ||||||||||||||
Expenses | 44,530 | 37,891 | 11,005 | (9,839 | ) | 83,587 | ||||||||||||||
Other income (expenses) | 2,577 | (64 | ) | 472 | (21 | ) | 2,964 | |||||||||||||
Income (loss) before income tax | 47,346 | 10,877 | (211 | ) | 69 | 58,081 | ||||||||||||||
Net income (loss) | 31,780 | 7,519 | (94 | ) | 69 | 39,274 | ||||||||||||||
Net income attributable to equity holders of PLDT | 31,674 | 7,516 | 30 | 69 | 39,289 |
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 | |||||||||||||||
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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 | |||||||||||||||
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 | 7,419 | 7 | 6,075 | 6 | 1,344 | 22 | ||||||||||||||||||
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 PLDT Landline Plus 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) | 13,327 | 6,708 | 6,619 | 99 | ||||||||||||
Domestic — outbound | 10,404 | 3,810 | 6,594 | 173 | ||||||||||||
International | 2,923 | 2,898 | 25 | 1 | ||||||||||||
Inbound | 2,733 | 2,677 | 56 | 2 | ||||||||||||
Outbound | 190 | 221 | (31 | ) | (14 | ) | ||||||||||
SMS count | 279,496 | 249,691 | 29,805 | 12 | ||||||||||||
Text messages | 277,869 | 248,051 | 29,818 | 12 | ||||||||||||
Domestic | 277,558 | 247,751 | 29,807 | 12 | ||||||||||||
Bucket-Priced | 256,391 | 223,373 | 33,018 | 15 | ||||||||||||
Standard | 21,167 | 24,378 | (3,211 | ) | (13 | ) | ||||||||||
International | 311 | 300 | 11 | 4 | ||||||||||||
Value-Added Services | 1,608 | 1,614 | (6 | ) | — | |||||||||||
Financial Services | 19 | 26 | (7 | ) | (27 | ) |
(1) | The transfer of Piltel’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) | ||||||||||||||||
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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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 Piltel’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 | ||||||||||||||||||||||||
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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 manpower rightsizing program, or 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 | |||||||||
Number ofDSLbroadband subscribers | 559,664 | 432,583 | 127,081 | 29 |
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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 interaction solutions | 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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Change | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 95,852 | 66 | Php | 89,299 | 64 | Php | 6,553 | 7 | |||||||||||||||
Fixed line | 49,686 | 34 | 48,832 | 35 | 854 | 2 | ||||||||||||||||||
Information and communications technology | 10,983 | 7 | 10,322 | 8 | 661 | 6 | ||||||||||||||||||
Inter-segment transactions | (10,684 | ) | (7 | ) | (9,749 | ) | (7 | ) | (935 | ) | 10 | |||||||||||||
Consolidated | Php | 145,837 | 100 | Php | 138,704 | 100 | Php | 7,133 | 5 | |||||||||||||||
Change | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 47,589 | 55 | Php | 44,530 | 53 | Php | 3,059 | 7 | |||||||||||||||
Fixed line | 35,733 | 42 | 37,891 | 45 | (2,158 | ) | (6 | ) | ||||||||||||||||
Information and communications technology | 13,267 | 16 | 11,005 | 13 | 2,262 | 21 | ||||||||||||||||||
Inter-segment transactions | (10,803 | ) | (13 | ) | (9,839 | ) | (11 | ) | (964 | ) | 10 | |||||||||||||
Consolidated | Php | 85,786 | 100 | Php | 83,587 | 100 | Php | 2,199 | 3 | |||||||||||||||
Change | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | (2,640 | ) | 44 | Php | 2,577 | 87 | Php | (5,217 | ) | (202 | ) | ||||||||||||
Fixed line | (3,173 | ) | 53 | (64 | ) | (2 | ) | (3,109 | ) | 4,857 | ||||||||||||||
Information and communications technology | (1 | ) | — | 472 | 16 | (473 | ) | (100 | ) | |||||||||||||||
Inter-segment transactions | (188 | ) | 3 | (21 | ) | (1 | ) | (167 | ) | 795 | ||||||||||||||
Consolidated | Php | (6,002 | ) | 100 | Php | 2,964 | 100 | Php | (8,966 | ) | (302 | ) | ||||||||||||
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Change | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless | Php | 29,499 | 84 | Php | 31,780 | 81 | Php | (2,281 | ) | (7 | ) | |||||||||||||
Fixed line | 7,732 | 22 | 7,519 | 19 | 213 | 3 | ||||||||||||||||||
Information and communications technology | (2,186 | ) | (6 | ) | (94 | ) | — | (2,092 | ) | 2,226 | ||||||||||||||
Inter-segment transactions | (69 | ) | — | 69 | — | (138 | ) | (200 | ) | |||||||||||||||
Consolidated | Php | 34,976 | 100 | Php | 39,274 | 100 | Php | (4,298 | ) | (11 | ) | |||||||||||||
Increase (Decrease) | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless Services: | ||||||||||||||||||||||||
Service Revenues | ||||||||||||||||||||||||
Cellular | Php | 87,518 | 92 | Php | 82,334 | 92 | Php | 5,184 | 6 | |||||||||||||||
Wireless broadband, satellite and others | 6,075 | 6 | 4,165 | 5 | 1,910 | 46 | ||||||||||||||||||
93,593 | 98 | 86,499 | 97 | 7,094 | 8 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of cellular handsets and SIM-packs | 2,259 | 2 | 2,800 | 3 | (541 | ) | (19 | ) | ||||||||||||||||
Total Wireless Revenues | Php | 95,852 | 100 | Php | 89,299 | 100 | Php | 6,553 | 7 | |||||||||||||||
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Increase | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Cellular service revenues | Php | 87,518 | Php | 82,334 | Php | 5,184 | 6 | |||||||||
By service type | 85,079 | 80,197 | 4,882 | 6 | ||||||||||||
Prepaid | 78,743 | 74,284 | 4,459 | 6 | ||||||||||||
Postpaid | 6,336 | 5,913 | 423 | 7 | ||||||||||||
By component | 85,079 | 80,197 | 4,882 | 6 | ||||||||||||
Voice | 37,275 | 36,105 | 1,110 | 3 | ||||||||||||
Data | 47,804 | 44,092 | 3,712 | 8 | ||||||||||||
Others(1) | 2,439 | 2,137 | 302 | 14 |
(1) | Refers to other non-subscriber-related revenues consisting primarily of inbound international roaming fees, revenues from Smart’s public calling offices and a small number of leased line contracts, revenues from Wolfpac and other Smart subsidiaries and revenue share in PLDT’s WeRoam and PLDT Landline Plus services. |
Increase | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Cellular subscriber base | 35,224,604 | 30,041,030 | 5,183,574 | 17 | ||||||||||||
Prepaid | 34,826,468 | 29,699,150 | 5,127,318 | 17 | ||||||||||||
Smart Buddy | 20,501,617 | 19,997,324 | 504,293 | 3 | ||||||||||||
Talk ‘N Text | 14,308,493 | 9,701,826 | 4,606,667 | 47 | ||||||||||||
Red Mobile (acquired on April 25, 2008) | 16,358 | — | 16,358 | 100 | ||||||||||||
Postpaid | 398,136 | 341,880 | 56,256 | 16 | ||||||||||||
Systemwide traffic volumes (in millions) | ||||||||||||||||
Calls (in minutes) | 6,708 | 6,355 | 353 | 6 | ||||||||||||
Domestic — outbound | 3,810 | 3,799 | 11 | — | ||||||||||||
International | 2,898 | 2,556 | 342 | 13 | ||||||||||||
Inbound | 2,677 | 2,355 | 322 | 14 | ||||||||||||
Outbound | 221 | 201 | 20 | 10 | ||||||||||||
SMS count | 249,691 | 227,028 | 22,663 | 10 | ||||||||||||
Text messages | 248,051 | 225,083 | 22,968 | 10 | ||||||||||||
Domestic | 247,751 | 224,818 | 22,933 | 10 | ||||||||||||
Bucket-Priced | 223,373 | 199,326 | 24,047 | 12 | ||||||||||||
Standard | 24,378 | 25,492 | (1,114 | ) | (4 | ) | ||||||||||
International | 300 | 265 | 35 | 13 | ||||||||||||
Value-Added Services | 1,614 | 1,903 | (289 | ) | (15 | ) | ||||||||||
Financial Services | 26 | 42 | (16 | ) | (38 | ) |
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Increase (Decrease) | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Text messaging | ||||||||||||||||
Domestic | Php | 43,477 | Php | 39,430 | Php | 4,047 | 10 | |||||||||
Bucket-Priced | 26,461 | 20,141 | 6,320 | 31 | ||||||||||||
Standard | 17,016 | 19,289 | (2,273 | ) | (12 | ) | ||||||||||
International | 1,808 | 1,835 | (27 | ) | (1 | ) | ||||||||||
45,285 | 41,265 | 4,020 | 10 | |||||||||||||
Value-added services | ||||||||||||||||
Standard(1) | 1,325 | 1,802 | (477 | ) | (26 | ) | ||||||||||
Rich Media(2) | 679 | 352 | 327 | 93 | ||||||||||||
Pasa Load | 470 | 594 | (124 | ) | (21 | ) | ||||||||||
2,474 | 2,748 | (274 | ) | (10 | ) | |||||||||||
Financial services | ||||||||||||||||
Smart Money | 41 | 75 | (34 | ) | (45 | ) | ||||||||||
Mobile Banking | 4 | 4 | — | — | ||||||||||||
45 | 79 | (34 | ) | (43 | ) | |||||||||||
Total | Php | 47,804 | Php | 44,092 | Php | 3,712 | 8 | �� | ||||||||
(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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Increase (Decrease) | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Prepaid | 5,127,318 | 5,842,329 | (715,011 | ) | (12 | ) | ||||||||||
Smart Buddy | 504,293 | 3,114,882 | (2,610,589 | ) | (84 | ) | ||||||||||
Talk ‘N Text | 4,606,667 | 2,727,447 | 1,879,220 | 69 | ||||||||||||
Red Mobile | 16,358 | — | 16,358 | 100 | ||||||||||||
Postpaid | 56,256 | 23,317 | 32,939 | 141 | ||||||||||||
Total | 5,183,574 | 5,865,646 | (682,072 | ) | (12 | ) | ||||||||||
2008 | 2007 | |||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||
Prepaid | 1,533,812 | 1,660,040 | 917,528 | 1,015,938 | 1,301,154 | 1,615,246 | 1,148,283 | 1,777,646 | ||||||||||||||||||||||||
Smart Buddy | 282,044 | 130,697 | 111,487 | (3,577 | ) | 880,281 | 1,050,678 | 763,257 | 420,666 | |||||||||||||||||||||||
Talk ‘N Text | 1,251,768 | 1,529,343 | 806,041 | 1,019,515 | 420,873 | 564,568 | 385,026 | 1,356,980 | ||||||||||||||||||||||||
Postpaid | 1,117 | 5,027 | 17,816 | 32,296 | 6,921 | 7,403 | 5,704 | 3,289 | ||||||||||||||||||||||||
Total | 1,534,929 | 1,665,067 | 935,344 | 1,048,234 | 1,308,075 | 1,622,649 | 1,153,987 | 1,780,935 | ||||||||||||||||||||||||
Gross(1) | Decrease | Net(2) | Decrease | |||||||||||||||||||||||||||||
2008 | 2007 | Amount | % | 2008 | 2007 | Amount | % | |||||||||||||||||||||||||
Prepaid | ||||||||||||||||||||||||||||||||
Smart Buddy | Php | 290 | Php | 312 | Php | (22 | ) | (7 | ) | Php | 230 | Php | 254 | Php | (24 | ) | (9 | ) | ||||||||||||||
Talk ‘N Text | 194 | 221 | (27 | ) | (12 | ) | 158 | 184 | (26 | ) | (14 | ) | ||||||||||||||||||||
Prepaid — Blended(3) | 254 | 285 | (31 | ) | (11 | ) | 203 | 233 | (30 | ) | (13 | ) | ||||||||||||||||||||
Postpaid — Smart | 2,065 | 2,091 | (26 | ) | (1 | ) | 1,483 | 1,485 | (2 | ) | — | |||||||||||||||||||||
Prepaid and Postpaid Blended(4) | 274 | 307 | (33 | ) | (11 | ) | 217 | 248 | (31 | ) | (13 | ) |
(1) | Gross monthly ARPU is calculated by dividing gross cellular service revenues for the month, including: (i) discounts; (ii) allocated content-provider costs; and (iii) 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, net of: (i) discounts; (ii) allocated content-provider costs; and (iii) interconnection income net of interconnection expense, by the average number of subscribers in the month. | |
(3) | The average monthly ARPU of Smart Buddy and Talk ‘N Text. | |
(4) | The average monthly ARPU of all prepaid and postpaid cellular subscribers. |
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Prepaid | Postpaid | |||||||||||||||||||||||
Smart Buddy | Talk ‘N Text | Smart | ||||||||||||||||||||||
Gross(1) | Net(2) | Gross(1) | Net(2) | Gross(1) | Net(2) | |||||||||||||||||||
2008 | ||||||||||||||||||||||||
First Quarter | Php | 292 | Php | 230 | Php | 207 | Php | 163 | Php | 2,013 | Php | 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 | 2,037 | 1,445 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
First Quarter | Php | 323 | Php | 267 | Php | 228 | Php | 187 | Php | 2,045 | Php | 1,483 | ||||||||||||
Second Quarter | 324 | 265 | 233 | 198 | 2,141 | 1,526 | ||||||||||||||||||
Third Quarter | 293 | 239 | 206 | 173 | 2,073 | 1,464 | ||||||||||||||||||
Fourth Quarter | 307 | 244 | 216 | 177 | 2,105 | 1,467 |
(1) | Gross quarterly ARPU is calculated by dividing gross cellular service revenues for the quarter, including: (i) discounts; (ii) allocated content-provider costs; and (iii) interconnection income but excluding inbound roaming revenues for the quarter, by the average number of subscribers in the quarter. | |
(2) | Net quarterly ARPU is calculated by dividing gross cellular service revenues, net of: (i) discounts; (ii) allocated content-provider costs; and (iii) interconnection income net of interconnection expense, by the average number of subscribers in the quarter. |
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Increase (Decrease) | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Wireless Services: | ||||||||||||||||||||||||
Depreciation and amortization | Php | 11,975 | 25 | Php | 12,202 | 27 | Php | (227 | ) | (2 | ) | |||||||||||||
Rent | 9,267 | 20 | 8,751 | 20 | 516 | 6 | ||||||||||||||||||
Compensation and employee benefits(1) | 5,433 | 11 | 4,608 | 10 | 825 | 18 | ||||||||||||||||||
Cost of sales | 4,236 | 9 | 4,446 | 10 | (210 | ) | (5 | ) | ||||||||||||||||
Repairs and maintenance | 4,230 | 9 | 3,634 | 8 | 596 | 16 | ||||||||||||||||||
Selling and promotions | 3,781 | 8 | 3,803 | 9 | (22 | ) | (1 | ) | ||||||||||||||||
Professional and other contracted services | 2,529 | �� | 5 | 2,369 | 5 | 160 | 7 | |||||||||||||||||
Taxes and licenses | 1,872 | 4 | 1,348 | 3 | 524 | 39 | ||||||||||||||||||
Communication, training and travel | 1,091 | 2 | 1,083 | 3 | 8 | 1 | ||||||||||||||||||
Asset impairment | 1,006 | 2 | 563 | 1 | 443 | 79 | ||||||||||||||||||
Provisions | 897 | 2 | — | — | 897 | 100 | ||||||||||||||||||
Insurance and security services | 722 | 2 | 783 | 2 | (61 | ) | (8 | ) | ||||||||||||||||
Amortization of intangible assets | 133 | — | 158 | — | (25 | ) | (16 | ) | ||||||||||||||||
Other expenses | 417 | 1 | 782 | 2 | (365 | ) | (47 | ) | ||||||||||||||||
Total | Php | 47,589 | 100 | Php | 44,530 | 100 | Php | 3,059 | 7 | |||||||||||||||
(1) | Includes salaries and employee benefits, incentive plan, pension and manpower rightsizing program, or MRP, costs. |
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Change | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Interest income | Php | 1,197 | Php | 1,186 | Php | 11 | 1 | |||||||||
Equity share in net losses of associates | (119 | ) | — | (119 | ) | (100 | ) | |||||||||
(Losses) gains on derivative transactions — net | (241 | ) | 278 | (519 | ) | (187 | ) | |||||||||
Foreign exchange (losses) gains — net | (1,771 | ) | 2,649 | (4,420 | ) | (167 | ) | |||||||||
Financing costs | (2,029 | ) | (2,299 | ) | 270 | (12 | ) | |||||||||
Others | 323 | 763 | (440 | ) | (58 | ) | ||||||||||
Total | Php | (2,640 | ) | Php | 2,577 | Php | (5,217 | ) | (202 | ) | ||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Fixed Line Services: | ||||||||||||||||||||||||
Service Revenues | ||||||||||||||||||||||||
Local exchange | Php | 15,923 | 32 | Php | 16,205 | 33 | Php | (282 | ) | (2 | ) | |||||||||||||
International long distance | 7,063 | 14 | 8,674 | 18 | (1,611 | ) | (19 | ) | ||||||||||||||||
National long distance | 6,207 | 13 | 6,338 | 13 | (131 | ) | (2 | ) | ||||||||||||||||
Data and other network | 18,607 | 37 | 15,921 | 32 | 2,686 | 17 | ||||||||||||||||||
Miscellaneous | 1,466 | 3 | 1,413 | 3 | 53 | 4 | ||||||||||||||||||
49,266 | 99 | 48,551 | 99 | 715 | 1 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Sale of computers | 420 | 1 | 281 | 1 | 139 | 49 | ||||||||||||||||||
Total Fixed Line Revenues | Php | 49,686 | 100 | Php | 48,832 | 100 | Php | 854 | 2 | |||||||||||||||
Increase (Decrease) | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Total local exchange service revenues (in millions) | Php | 15,923 | Php | 16,205 | Php | (282 | ) | (2 | ) | |||||||
Number of fixed line subscribers | 1,782,356 | 1,724,702 | 57,654 | 3 | ||||||||||||
Postpaid | 1,533,687 | 1,479,647 | 54,040 | 4 | ||||||||||||
Prepaid | 248,669 | 245,055 | 3,614 | 1 | ||||||||||||
Number of fixed line employees | 7,813 | 8,080 | (267 | ) | (3 | ) | ||||||||||
Number of fixed line subscribers per employee | 228 | 213 | 15 | 7 |
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Decrease | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Total international long distance service revenues (in millions) | Php | 7,063 | Php | 8,674 | Php | (1,611 | ) | (19 | ) | |||||||
Inbound | 5,667 | 7,127 | (1,460 | ) | (20 | ) | ||||||||||
Outbound | 1,396 | 1,547 | (151 | ) | (10 | ) | ||||||||||
International call volumes (in million minutes, except call ratio) | 2,024 | 2,280 | (256 | ) | (11 | ) | ||||||||||
Inbound | 1,786 | 2,007 | (221 | ) | (11 | ) | ||||||||||
Outbound | 238 | 273 | (35 | ) | (13 | ) | ||||||||||
Inbound-outbound call ratio | 7.5:1 | 7.4:1 | — | — |
Decrease | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Total national long distance service revenues (in millions) | Php | 6,207 | Php | 6,338 | Php | (131 | ) | (2 | ) | |||||||
National long distance call volumes (in million minutes) | 1,944 | 2,183 | (239 | ) | (11 | ) |
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Increase (Decrease) | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
Data and other network service revenues (in millions) | Php | 18,607 | Php | 15,921 | Php | 2,686 | 17 | |||||||||
Number ofDSLbroadband subscribers | 432,583 | 264,291 | 168,292 | 64 | ||||||||||||
Number ofPLDT Vibenarrowband subscribers | 101,411 | 230,995 | (129,584 | ) | (56 | ) |
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Increase (Decrease) | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Fixed Line Services: | ||||||||||||||||||||||||
Depreciation and amortization | Php | 11,901 | 33 | Php | 15,477 | 41 | Php | (3,576 | ) | (23 | ) | |||||||||||||
Compensation and employee benefits(1) | 9,093 | 25 | 10,411 | 27 | (1,318 | ) | (13 | ) | ||||||||||||||||
Repairs and maintenance | 4,634 | 13 | 3,772 | 10 | 862 | 23 | ||||||||||||||||||
Rent | 2,492 | 7 | 1,799 | 5 | 693 | 39 | ||||||||||||||||||
Professional and other contracted services | 2,143 | 6 | 1,727 | 5 | 416 | 24 | ||||||||||||||||||
Selling and promotions | 1,715 | 5 | 1,552 | 4 | 163 | 11 | ||||||||||||||||||
Asset impairment | 888 | 3 | 43 | — | 845 | 1,965 | ||||||||||||||||||
Taxes and licenses | 769 | 2 | 877 | 2 | (108 | ) | (12 | ) | ||||||||||||||||
Communication, training and travel | 608 | 2 | 466 | 1 | 142 | 30 | ||||||||||||||||||
Insurance and security services | 487 | 1 | 439 | 1 | 48 | 11 | ||||||||||||||||||
Cost of sales | 356 | 1 | 300 | 1 | 56 | 19 | ||||||||||||||||||
Provisions | 1 | — | 666 | 2 | (665 | ) | (100 | ) | ||||||||||||||||
Other expenses | 646 | 2 | 362 | 1 | 284 | 78 | ||||||||||||||||||
Total | Php | 35,733 | 100 | Php | 37,891 | 100 | Php | (2,158 | ) | (6 | ) | |||||||||||||
(1) | Includes salaries and employee benefits, incentive plan, pension and MRP costs. |
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Change | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Gains (losses) on derivative transactions — net | Php | 3,444 | Php | (3,335 | ) | Php | 6,779 | 203 | ||||||||
Interest income | 448 | 296 | 152 | 51 | ||||||||||||
Equity share in net losses of joint ventures | (74 | ) | — | (74 | ) | (100 | ) | |||||||||
Financing costs | (3,903 | ) | (4,657 | ) | 754 | 16 | ||||||||||
Foreign exchange (losses) gains — net | (4,513 | ) | 5,479 | (9,992 | ) | (182 | ) | |||||||||
Others | 1,425 | 2,153 | (728 | ) | (34 | ) | ||||||||||
Php | (3,173 | ) | Php | (64 | ) | Php | 3,109 | 4,858 | ||||||||
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Increase | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service Revenues: | ||||||||||||||||||||||||
Knowledge processing solutions | Php | 5,272 | 48 | Php | 5,261 | 51 | Php | 11 | — | |||||||||||||||
Customer interaction solutions | 3,402 | 31 | 3,262 | 32 | 140 | 4 | ||||||||||||||||||
Internet and online gaming | 976 | 9 | 937 | 9 | 39 | 4 | ||||||||||||||||||
Vitroä data center | 767 | 7 | 595 | 6 | 172 | 29 | ||||||||||||||||||
10,417 | 95 | 10,055 | 98 | 362 | 4 | |||||||||||||||||||
Non-Service Revenues: | ||||||||||||||||||||||||
Point-product-sales | 566 | 5 | 267 | 2 | 299 | 112 | ||||||||||||||||||
Total ICT Revenues | Php | 10,983 | 100 | Php | 10,322 | 100 | Php | 661 | 6 | |||||||||||||||
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Increase (Decrease) | ||||||||||||||||||||||||
2008 | % | 2007 | % | Amount | % | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
ICT Services: | ||||||||||||||||||||||||
Compensation and employee benefits(1) | Php | 6,131 | 46 | Php | 5,455 | 50 | Php | 676 | 12 | |||||||||||||||
Asset impairment | 2,286 | 17 | 711 | 6 | 1,575 | 222 | ||||||||||||||||||
Depreciation and amortization | 833 | 6 | 934 | 8 | (101 | ) | (11 | ) | ||||||||||||||||
Professional and other contracted services | 747 | 6 | 1,129 | 10 | (382 | ) | (34 | ) | ||||||||||||||||
Rent | 665 | 5 | 620 | 6 | 45 | 7 | ||||||||||||||||||
Cost of sales | 660 | 5 | 381 | 3 | 279 | 73 | ||||||||||||||||||
Repairs and maintenance | 573 | 4 | 504 | 5 | 69 | 14 | ||||||||||||||||||
Communication, training and travel | 573 | 4 | 523 | 5 | 50 | 10 | ||||||||||||||||||
Amortization of intangible assets | 244 | 2 | 232 | 2 | 12 | 5 | ||||||||||||||||||
Selling and promotions | 203 | 2 | 194 | 2 | 9 | 5 | ||||||||||||||||||
Taxes and licenses | 98 | 1 | 94 | 1 | 4 | 4 | ||||||||||||||||||
Insurance and security services | 61 | — | 49 | — | 12 | 24 | ||||||||||||||||||
Other expenses | 193 | 2 | 179 | 2 | 14 | 8 | ||||||||||||||||||
Total | Php | 13,267 | 100 | Php | 11,005 | 100 | Php | 2,262 | 21 | |||||||||||||||
(1) | Includes salaries and employee benefits, incentive plan, pension and MRP costs. |
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Change | ||||||||||||||||
2008 | 2007 | Amount | % | |||||||||||||
(in millions) | ||||||||||||||||
Other Income (Expenses): | ||||||||||||||||
Foreign exchange gains (losses) — net | Php | 93 | Php | (138 | ) | Php | 231 | 167 | ||||||||
Interest income | 22 | 21 | 1 | 5 | ||||||||||||
Equity share in net earnings of associates | 17 | (11 | ) | 28 | 255 | |||||||||||
(Loss) gains on derivative transactions — net | (59 | ) | 138 | (197 | ) | (143 | ) | |||||||||
Financing costs | (172 | ) | (132 | ) | (40 | ) | 30 | |||||||||
Others | 98 | 594 | (496 | ) | (84 | ) | ||||||||||
Total | Php | (1 | ) | Php | 472 | Php | (473 | ) | (100 | ) | ||||||
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2009 | 2008 | 2007 | ||||||||||
(in millions) | ||||||||||||
Cash Flows | ||||||||||||
Net cash provided by operating activities | Php | 74,386 | Php | 78,302 | Php | 77,418 | ||||||
Net cash used in investing activities | 49,132 | 17,014 | 31,319 | |||||||||
Capital expenditures | 28,069 | 25,203 | 24,824 | |||||||||
Net cash used in financing activities | 20,293 | 45,464 | 44,819 | |||||||||
Net increase in cash and cash equivalents | 4,635 | 16,237 | 577 |
2009 | 2008 | |||||||
(in millions) | ||||||||
Capitalization | ||||||||
Interest-bearing financial liabilities: | ||||||||
Long-term portion of financial liabilities: | ||||||||
Long-term debt | Php | 86,066 | Php | 58,899 | ||||
Obligations under finance lease | 13 | 11 | ||||||
86,079 | 58,910 | |||||||
Current portion of interest-bearing financial liabilities: | ||||||||
Notes payable | 2,279 | 553 | ||||||
Long-term debt maturing within one year | 10,384 | 14,459 | ||||||
Obligations under finance lease maturing within one year | 51 | 59 | ||||||
Preferred stock subject to mandatory redemption | — | 9 | ||||||
12,714 | 15,080 | |||||||
Total interest-bearing financial liabilities | 98,793 | 73,990 | ||||||
Total equity | 98,575 | 105,531 | ||||||
Php | 197,368 | Php | 179,521 | |||||
Other Selected Financial Data | ||||||||
Total assets | Php | 280,148 | Php | 252,558 | ||||
Property, plant and equipment- net | 161,256 | 160,326 | ||||||
Cash and cash equivalents | 38,319 | 33,684 | ||||||
Short-term investments | 3,824 | 6,670 |
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Payments Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | 5 years | ||||||||||||||||
(in millions) | ||||||||||||||||||||
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) | 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 | 63 | November 24, 1998 to present | ||||
Napoleon L. Nazareno | 60 | November 24, 1998 to present | ||||
Donald G. Dee | 63 | September 30, 2008 to present | ||||
Helen Y. Dee | 66 | June 18, 1986 to present | ||||
Ray C. Espinosa | 54 | November 24, 1998 to present | ||||
Tatsu Kono | 57 | March 28, 2006 to present | ||||
Rev. Fr. Bienvenido F. Nebres, S.J.* | 70 | November 24, 1998 to present | ||||
Takashi Ooi | 48 | November 6, 2007 to present | ||||
Oscar S. Reyes* | 64 | April 5, 2005 to present | ||||
Albert F. del Rosario | 70 | November 24, 1998 to present | ||||
Pedro E. Roxas* | 54 | March 1, 2001 to present | ||||
Tony Tan Caktiong | 57 | July 8, 2008 to present | ||||
Alfred V. Ty* | 42 | June 13, 2006 to present |
* | Independent Director |
Period during which | ||||||
Name | Age | Position(s) | individual has served as such | |||
Manuel V. Pangilinan | 63 | Chairman of the Board | February 19, 2004 to present | |||
Napoleon L. Nazareno | 60 | President and Chief Executive Officer | February 19, 2004 to present | |||
President and Chief Executive Officer of Smart | January 2000 to present | |||||
Ma. Lourdes C. Rausa-Chan | 56 | 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 | 49 | 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 Corporate Business Head Customer Sales and Marketing Head | May 15, 2003 to present May 15, 2003 to January 31, 2008 February 1, 2008 to present |
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Period during which | ||||||
Name | Age | Position(s) | individual has served as such | |||
Rene G. Bañez | 54 | Senior Vice President | January 25, 2005 to present | |||
Chief Governance Officer | October 5, 2004 to March 3, 2008 | |||||
Administration and Materials Management Head | January 1, 2008 to present | |||||
Jun R. Florencio | 54 | Senior Vice President | June 14, 2005 to present | |||
Audit and Assurance Head | September 1, 2000 to February 15, 2006 | |||||
Internal Audit and Fraud Risk Management Head | February 16, 2006 to present | |||||
Menardo G. Jimenez, Jr. | 46 | Senior Vice President | December 9, 2004 to present | |||
Corporate Communications and Public Affairs Head | December 1, 2001 to June 15, 2004 | |||||
Retail Business Head | June 16, 2004 to December 31, 2007 | |||||
Business Transformation Office Revenue Team | January 1, 2008 to present | |||||
George N. Lim | 57 | Senior Vice President | February 26, 1999 to present | |||
Network Services Head | February 1, 2003 to December 31, 2007 | |||||
Business Transformation Office Network Team | January 1, 2008 to present | |||||
Alfredo S. Panlilio | 47 | Senior Vice President | May 8, 2001 to present | |||
International and Carrier Business Head | February 1, 2003 to June 15, 2004 | |||||
PLDT Global Corp. President | June 16, 2004 to present | |||||
Claro Carmelo P. Ramirez | 49 | Senior Vice President | July 1, 1999 to present | |||
Retail Business Head | February 1, 2003 to June 15, 2004 | |||||
International and Carrier Business Head | June 16, 2004 to December 4, 2005 | |||||
Consumer Affairs Head | December 5, 2005 to December 31, 2007 | |||||
Office of the President and CEO | January 1, 2008 to present | |||||
Victorico P. Vargas | 58 | Senior Vice President | February 15, 2000 to present | |||
Human Resources Head | February 15, 2000 to present | |||||
International and Carrier Business Head | March 1, 2007 to December 31, 2007 | |||||
Business Transformation Office Head | January 1, 2008 to present | |||||
June Cheryl A. Cabal | 36 | First Vice President | May 6, 2008 to present | |||
Financial Reporting and Planning Head | May 1, 2002 to November 15, 2006 | |||||
Financial Reporting and Controllership Head | November 15, 2006 to present | |||||
Christopher H. Young | 52 | Chief Financial Advisor | November 24, 1998 to present |
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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 | Great Life Financial Assurance Corporation | |||
(Vice Chairman) | 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. | |||
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. | ||||
RCBC Savings Bank (Chairman) | ||||
South Western Cement Corporation | ||||
Xamdu Motors, Inc. (Chairman) | ||||
Ray C. Espinosa | Cyber Bay Corporation | Bancholders, Inc. | ||
Lepanto Consolidated Mining Company (Independent Director) | Bayantrade, Inc. (Chairman) | |||
Metro Pacific Investments Corporation | Beacon Electric Asset Holdings, Inc. | |||
Manila Electric Company | Bonifacio Communications Corporation | |||
Digital Paradise, Inc. (Chairman) | ||||
Enterprise Investment Holdings, Inc. |
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Name of Companies | ||||
Name of Director | Public | Private | ||
ePDS, Inc. (Chairman) | ||||
ePLDT Ventus, Inc. (Chairman) | ||||
Green Apple Business Ventures Corp. | ||||
Green Apple Food Factory, Inc. | ||||
Infocom Technologies, Inc. (Chairman) | ||||
Intelligent Network Plus, Inc. (Chairman) | ||||
Level Up! Games Philippines, Inc. (Chairman) | ||||
Metro Pacific Assets Holdings, Inc. | ||||
Metro Pacific Resources, Inc. | ||||
mySecureSign, Inc. (Chairman) | ||||
netGames Philippines, Inc. (Chairman) | ||||
New Gallant Limited | ||||
Pacific Space International Development Corporation (Chairman) | ||||
Parlance Systems, Inc. (Chairman) | ||||
Philippine Pacific First Transmission Management Corporation | ||||
Philippine Telecommunications Investment Corporation | ||||
Sidera Technologies, Inc. (Chairman) | ||||
SPi Global Solutions, Inc. (Chairman) | ||||
SPi Technologies, Inc. (Chairman) | ||||
Tahanan Mutual Building and Loan Association, Inc. | ||||
The Philippine Home Cable Holdings, Inc. (Chairman) | ||||
Two Rivers Pacific Holdings Corporation | ||||
Unilink Communications Corporation (Chairman) | ||||
Vocativ Systems, Inc. (Chairman) | ||||
Wolfpac Mobile, Inc. | ||||
Albert F. del Rosario | LMG Chemicals Corporation | ABC Development Corporation (ABC 5) | ||
Metro Pacific Investments Corporation | Bancholders, Inc. | |||
Metro Pacific Tollways Corporation | Business World Publishing Corporation | |||
Philex Mining Corporation | Hastings Holdings, Inc. | |||
Landco Pacific Corporation | ||||
Manila North Tollways Corporation | ||||
Metro Pacific Tollways Development Corporation | ||||
MediaQuest Holdings, Inc. | ||||
MediaScape, Inc. | ||||
Nation Broadcasting Corporation | ||||
Satventures, Inc. | ||||
Six Harmonies Holdings, Inc. | ||||
Smart Communications Philippine Holdings, Inc. | ||||
International Graduate University (Washington D.C.) | ||||
Oscar S. Reyes | Alcorn Gold Resources, Inc. (Independent Director) | Basic EcoMarket Farms, Inc. (Chairman) | ||
Ayala Land, Inc. (Independent Drector) | CEO’s Inc. | |||
Bank of the Philippine Islands | First Philippine Electric Company (Independent Director) | |||
Basic Energy Corporation (Independent Director) | Global Resources for Outsourced Workers, Inc. | |||
Manila Water Company, Inc. (Independent Director) | In1 Archipelago Minerals, Inc. | |||
Pepsi Cola Products Philippines, Inc. (Independent | Mindoro Resources Ltd. | |||
Director) | Petrolift, Inc. (Independent Director) | |||
Sun Life Prosperity Dollar Abundance Fund, Inc. (Independent Director) | ||||
Sun Life Prosperity Dollar Advantage Fund, Inc. (Independent Director) | ||||
Sun Life Financial Plans, Inc. (Independent Director) | ||||
Tower Club, Inc. |
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2010 | 2009 | 2008 | ||||||||||
Estimate | Actual | |||||||||||
(in millions) | ||||||||||||
President and CEO(1)and four most highly compensated key officers: | ||||||||||||
Salary(2) | Php | 53 | Php | 47 | Php | 41 | ||||||
Bonus(3) | 12 | 10 | 8 | |||||||||
Other compensation(4) | 232 | 52 | 46 | |||||||||
297 | 109 | 95 | ||||||||||
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) | 219 | 204 | 188 | |||||||||
Bonus(3) | 61 | 54 | 48 | |||||||||
Other compensation(4) | 886 | 246 | 266 | |||||||||
Php | 1,166 | Php | 504 | Php | 502 | |||||||
(1) | The President and CEO receives compensation from Smart but not from PLDT. | |
(2) | Basic monthly salary. | |
(3) | Includes longevity pay, mid-year bonus, 13thmonth 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. Includes LTIP costs to be paid in 2010. |
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Shares of | Shares of | |||||||
Name of Owner | Common Stock | Preferred Stock | ||||||
Manuel V. Pangilinan | 225,450 | (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 | — | ||||||
Donald G. Dee | 1 | 640 | ||||||
Oscar S. Reyes | 1 | 360 | ||||||
Albert F. del Rosario | 140,005 | (2) | 2,100 | |||||
Pedro E. Roxas | 1 | 540 | ||||||
Alfred V. Ty | 1 | — | ||||||
Tony Tan Caktiong | 1 | 50 |
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Shares of | Shares of | |||||||
Name of Owner | Common Stock | Preferred Stock | ||||||
Ma. Lourdes C. Rausa-Chan | 699 | (1) | 350 | |||||
Ernesto R. Alberto | 7,500 | (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 | |||||
Alfredo S. Panlilio | 6,031 | (3) | — | |||||
Claro Carmelo P. Ramirez | 11,500 | — | ||||||
Victorico P. Vargas | 2,878 | 180 | ||||||
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) | Out of the 140,005 common shares, 15,000 common shares are under the name of Albert F. del Rosario and/or Margaret Gretchen del Rosario. | |
(3) | Includes PLDT common shares that have been lodged with the PDTC and PLDT common shares underlying ADSs held by JP Morgan Asset Holdings Limited. |
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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; |
• | 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. |
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. |
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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. |
1. | Mr. Manuel V. Pangilinan, in his capacity as Chairman of the Board of Metro Pacific Corporation, a stockholder of Metro Tagaytay Land Company, Inc., or MTLCI, and four other individuals were respondents in I.S. 04-A-1057 for alleged violation of Article 315 (1)(b), or Estafa, of the Revised Penal Code filed by Mr. Vicente A. Tuason on behalf of Universal Leisure Club, Inc. (ULCI) and Mr. Jose L. Merin in behalf of Universal Rightfield Property Holdings, Inc. (URPHI). |
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2. | Mr. Napoleon L. Nazareno, in his capacity as President and Chief Executive Officer of Smart, is a respondent in a complaint docketed as I.S. 07-3216-F filed with the Cebu City Prosecutor’s Office by Integrated Distribution Network, Inc., or IDNI, for alleged estafa and violation of R.A. 8484 or the “Access Devices Regulation Act of 1988”. IDNI alleged that Smart, through its directors and officers including Mr. Nazareno (respondent in this complaint), perpetrated fraud by blocking the SIM cards of its sub-dealers. The dispute arose from contracts executed between Smart and IDNI on roving billboards. The parties entered into a settlement agreement allowing IDNI to purchase electronic loads from Smart within a specific period and for a specified amount. It is Smart’s position that IDNI’s cause of action, if any, is purely civil in nature. |
3. | Messrs. Napoleon L. Nazareno and Albert F. del Rosario and other directors and officers of the former PDCP Bank and some officers of the Bangko Sentral ng Pilipinas and Development Bank of the Philippines, are respondents in a complaint docketed as I.S. No. 2004-631 filed by Chung Hing Wong/Unisteel/Unisco Metals, Inc. with the DOJ, for alleged syndicated estafa, estafa through falsification of documents, other deceits, malversation and robbery. In the complaint-affidavit, the complainant alleged that the officers and directors of PDCP Bank deceived the complainant to secure a loan from PDCP Bank through misrepresentation and with the sinister purpose of taking over the complainant’s corporation. As stated in their respective counter-affidavits, the charges against the PDCP directors including Messrs. Nazareno and del Rosario are manifestly unmeritorious. These directors have not personally met the complainant, nor are they parties to the questioned transactions and, as such, could not have deceived the complainant 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. |
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4. | Mr. Albert F. del Rosario and other former directors/officers, and Ms. 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 case docketed as OMB C-C-04-0363-H (CPL No. C-04-1248), in the OMB. The complaint is for alleged: (a) violation of R.A. 3019 (otherwise known as the Anti-Graft and Corrupt Practices Act); (b) estafa thru falsification of public documents; (c) falsification of public documents under Article 171, in relation to Article 172, of the Revised Penal Code (RPC); (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 Mr. del Rosario and Ms. Rausa-Chan involve the first two offenses only and in their capacity as director and corporate secretary, respectively, of Metro Paper and Packaging Products, Inc. In the opinion of the legal counsels of Mr. del Rosario and Ms. Rausa-Chan, there are no legal and factual bases for their inclusion as respondents in this complaint. Mr. del Rosario and Ms. Rausa-Chan had no participation or involvement in the alleged anomalous acquisition and transfer of the subject tax credit certificates. As at the date of this annual report, the case is still pending with the OMB. |
2009 | 2008 | 2007 | ||||||||||
PLDT Group | 29,035 | 29,904 | 30,255 | |||||||||
Wireless | 5,507 | 5,602 | 5,415 | |||||||||
Fixed Line | 7,947 | 7,813 | 8,080 | |||||||||
ICT | 15,581 | 16,489 | 16,760 | |||||||||
PLDT Only | 7,543 | 7,590 | 7,909 |
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Name of Beneficial | ||||||||||||||
Name and Address | Owner and | Number of | ||||||||||||
Title | of Record Owner and | Place of | Relationship with | Shares Held of | Percentage | |||||||||
of Class | Relationship With Issuer | Incorporation | Record Owner | Record | of Class | |||||||||
Common | Philippine Telecommunications Investment Corporation(1) 12th Floor Ramon Cojuangco Bldg. Makati Avenue, Makati City | Philippine Corporation | Same as Record Owner | 26,034,263 | (2) | 13.94 | ||||||||
Common | Metro Pacific Resources, Inc.(3) c/o Corporate Secretary 18th Floor, Liberty Center, 104 H. V. dela Costa St. Salcedo Village, Makati City | Philippine Corporation | Same as Record Owner | 15,745,172 | (2) | 8.43 | ||||||||
Common | NTT Communications Corporation(4) 1-1-6 Uchisaiwai-cho 1-Chome, Chiyoda-ku Tokyo 100-8019, Japan | Japanese Corporation | See Footnote (5) | 12,633,487 | (6) | 6.76 | ||||||||
Common | NTT DoCoMo, Inc.(6) 41st Floor, Sanno Park Tower 2-11-1 Nagata-cho, Chiyoda-ku Tokyo 100-6150, Japan | Japanese Corporation | See Footnote(5) | 18,234,821 | ((7) | 9.76 | ||||||||
Common | Social Security System(8) SSS Building East Avenue, Quezon City | Philippine Corporation | Same as Record Owner | 5,024,788 | (9) | 2.69 | ||||||||
Common | PCD Nominee Corporation(10) 37/F Enterprise Building, Tower I Ayala Avenue cor. Paseo de Roxas St. Makati City | Philippine Corporation | See Footnote (10) | 58,972,458 | 31.57 |
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Name of Beneficial | ||||||||||||||
Name and Address | Owner and | Number of | ||||||||||||
Title | of Record Owner and | Place of | Relationship with | Shares Held of | Percentage | |||||||||
of Class | Relationship With Issuer | Incorporation | Record Owner | Record | of Class | |||||||||
Common | J. P. Morgan Asset Holdings (HK) Limited(11) (various accounts) 20/F Chater House 8 Connaught Road Central, Hongkong | HongKong Corporation | See Footnote (11) | 45,098,829 | 24.14 | |||||||||
Common | Capital Research Global Investors(12) | Delaware Corporation | See Footnote (12) | 14,612,760 | 7.82 | |||||||||
Common | Lazard Asset Management LLC(13) | Delaware Corporation | See Footnote (13) | 11,276,352 | 6.04 |
(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 April 12, 2010 by virtue of PLDT common 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 of PLDT. | |
(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 April 12, 2010. | |
(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 American Depository Shares, collectively representing 14.33% of the outstanding common stock of PLDT as at April 12, 2010. | |
(8) | Based on a resolution adopted by the Board of Directors of the SSS, Mr. Thelmo Y. Cunanan, as Chairman of the SSS, has been authorized to sign the proxy constituting the lawful attorney/proxy of SSS with 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 10,696,990 shares of PLDT of which 5,024,788 are owned on record by SSS and 5,672,202 shares are held on record by PCD, representing 5.73% of the outstanding common stock of PLDT as at April 12, 2010. | |
(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 April 12, 2010, except The Hongkong and Shanghai Banking Corp. Ltd.–Clients, which owned approximately 18.27% 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 April 12, 2010. | |
The PCD account also includes 5,672,202 shares of PLDT common stock beneficially owned by the SSS. |
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(11) | 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 2,249,100 shares of PLDT common stock underlying ADSs beneficially owned by Capital Research Global Investors, 8,533,253 shares of PLDT common stock underlying ADS beneficially owned by NTT DoCoMo, and 11,276,352 shares of PLDT common stock underlying ADSs beneficially owned by Lazard Asset Management LLC, or LAMLLC. | ||
(12) | According to the Schedule 13G/A of Capital Research Global Investors, or CRGI, filed with the U.S. Securities and Exchange Commission on February 12, 2010, CRGI, as an investment adviser, beneficially owned 14,944,540 shares of PLDT common stock out of which 2,249,100 shares are underlying ADSs. In an email to PLDT dated April 21, 2010, Mr. Christopher Aquino of CRGI confirmed that as of April 12, 2010, CRGI beneficially owned 14,612,760 shares of PLDT common stock, of which 2,249,100 shares are underlying ADSs. | |
(13) | According to the Schedule 13G of LAMLLC filed with the U.S. Securities and Exchange Commission on February 5, 2010, LAMLLC, as an investment adviser, beneficially owned 11,276,352 shares of PLDT common stock. |
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Philippine Stock | New York Stock | |||||||||||||||
Exchange | Exchange | |||||||||||||||
High | Low | High | Low | |||||||||||||
2010 | ||||||||||||||||
First Quarter | Php | 2,775.00 | Php | 2,420.00 | US$ | 60.65 | US$ | 53.05 | ||||||||
January | 2,775.00 | 2,600.00 | 60.65 | 55.97 | ||||||||||||
February | 2,665.00 | 2,500.00 | 56.44 | 53.09 | ||||||||||||
March | 2,695.00 | 2,420.00 | 58.80 | 53.05 | ||||||||||||
Second Quarter | ||||||||||||||||
April | 2,540.00 | 2,425.00 | 57.49 | 53.01 | ||||||||||||
May (until May 12, 2010) | 2,530.00 | 2,440.00 | 56.38 | 53.07 | ||||||||||||
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 | ||||||||||||
November | 2,625.00 | 2,450.00 | 57.00 | 51.12 | ||||||||||||
December | 2,645.00 | 2,570.00 | 58.17 | 54.70 | ||||||||||||
2008 | 3,175.00 | 1,810.00 | 76.72 | 36.05 | ||||||||||||
First Quarter | 3,175.00 | 2,520.00 | 76.72 | 61.49 | ||||||||||||
Second Quarter | 2,820.00 | 2,285.00 | 68.96 | 50.95 | ||||||||||||
Third Quarter | 2,795.00 | 2,240.00 | 62.97 | 51.10 | ||||||||||||
Fourth Quarter | 2,725.00 | 1,810.00 | 57.38 | 36.05 | ||||||||||||
2007 | 3,285.00 | 2,250.00 | 76.30 | 45.25 | ||||||||||||
2006 | 2,610.00 | 1,675.00 | 51.90 | 32.15 | ||||||||||||
2005 | 1,860.00 | 1,310.00 | 34.35 | 23.50 |
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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 therefor. |
(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, a holder of Common Stock is entitled to vote such shares of Common Stock held by him 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. |
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(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 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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No. of Shares | ||||||||
Series | April 12, 2010 | December 31, 2009 | ||||||
Series A to EE 10% Cumulative Convertible | 405,697,562 | 405,631,062 | ||||||
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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2009 | 2008 | |||||||||||||||
U.S. Dollar | Php(1) | U.S. Dollar | Php(2) | |||||||||||||
(in millions) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Note receivable | 2 | 81 | — | — | ||||||||||||
Advances and refundable deposits | — | 7 | — | — | ||||||||||||
Total noncurrent financial assets | 2 | 88 | — | — | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents | 140 | 6,496 | 101 | 4,794 | ||||||||||||
Short-term investments | 47 | 2,164 | 21 | 986 | ||||||||||||
Trade and other receivables – net | 206 | 9,573 | 207 | 9,880 | ||||||||||||
Derivative financial assets | — | 6 | 1 | 56 | ||||||||||||
Total current financial assets | 393 | 18,239 | 330 | 15,716 | ||||||||||||
Total Financial Assets | 395 | 18,327 | 330 | 15,716 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities – net of current portion | 837 | 38,871 | 925 | 44,064 | ||||||||||||
Derivative financial liabilities | 59 | 2,751 | 37 | 1,761 | ||||||||||||
Total noncurrent financial liabilities | 896 | 41,622 | 962 | 45,825 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable | 155 | 7,180 | 143 | 6,820 | ||||||||||||
Accrued expenses and other current liabilities | 95 | 4,409 | 93 | 4,447 | ||||||||||||
Derivative financial liabilities | — | — | 2 | 87 | ||||||||||||
Current portion of interest-bearing financial liabilities | 155 | 7,220 | 301 | 14,331 | ||||||||||||
Total current financial liabilities | 405 | 18,809 | 539 | 25,685 | ||||||||||||
Total Financial Liabilities | 1,301 | 60,431 | 1,501 | 71,510 | ||||||||||||
(1) | 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. | |
(2) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was 47.65 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2008. |
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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 | 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 | |||||||||||||||||||||||||||||||||
Interest rate | — | MART 1 + 0.75%; PDST-F + 1.0% 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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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 | 26 | — | — | — | — | 26 | 1,258 | — | 1,258 | 26 | 1,258 | |||||||||||||||||||||||||||||||||
Interest rate | 0.10% to 4.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 56 | — | — | — | — | 56 | 2,682 | — | 2,682 | 56 | 2,682 | |||||||||||||||||||||||||||||||||
Interest rate | 0.25% to 3.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 74 | — | — | — | — | 74 | 3,400 | — | 3,400 | 74 | 3,400 | |||||||||||||||||||||||||||||||||
Interest rate | 0.30% to 7.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 567 | — | — | — | — | 567 | 26,120 | — | 26,120 | 567 | 26,120 | |||||||||||||||||||||||||||||||||
Interest rate | 2% to 7.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 21 | — | — | — | — | 21 | 985 | — | 985 | 21 | 985 | |||||||||||||||||||||||||||||||||
Interest rate | 3.29% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 119 | — | — | — | — | 119 | 5,685 | — | 5,685 | 119 | 5,685 | |||||||||||||||||||||||||||||||||
Interest rate | 6.69% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | 35 | — | 4 | 9 | — | 48 | 2,291 | — | 2,291 | 48 | 2,285 | |||||||||||||||||||||||||||||||||
Interest rate | 6.3194% | — | 6.125% | 6.875% to 7% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
898 | — | 4 | 9 | — | 911 | 42,421 | — | 42,421 | 911 | 42,415 | ||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | 114 | — | — | 159 | 295 | 568 | 27,061 | 368 | 26,693 | 559 | 26,607 | |||||||||||||||||||||||||||||||||
Interest rate | 10.50% | — | — | 11.375% | 8.35% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 22 | 50 | 11 | 3 | 280 | 366 | 17,444 | 4,046 | 13,398 | 252 | 12,030 | |||||||||||||||||||||||||||||||||
Interest rate | 4.49% to 6% | 3.79% to 4.70% | 3.79% to 4.70% | 3.79% | 2.25% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 3 | 1 | 182 | 33 | 219 | 10,420 | 79 | 10,341 | 209 | 9,955 | |||||||||||||||||||||||||||||||||
Interest rate | — | 6.50% to 8.4346% | 5.625% to 8.4346% | 5.625% to 8.4346% | 6.125% to 6.50% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 13 | 215 | 59 | 77 | — | 364 | 17,339 | 67 | 17,272 | 363 | 17,272 | |||||||||||||||||||||||||||||||||
Interest rate | US$LIBOR + 1.75% to 2.75% | US$LIBOR + 0.42% to 2.50% | US$LIBOR + 0.42% to 0.815% | US$LIBOR + 0.42% to 0.75% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 47 | 32 | 40 | — | 119 | 5,670 | 16 | 5,654 | 119 | 5,653 | |||||||||||||||||||||||||||||||||
Interest rate | — | MART 1 + 0.75% to 5.70%; PDST-F + 1.0% to 1.50% | MART 1 + 0.75%; PDST-F + 1.0% to 1.50% | PDST-F + 1.0% to 1.50% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 12 | — | — | — | — | 12 | 553 | — | 553 | 12 | 553 | |||||||||||||||||||||||||||||||||
Interest rate | 5.25% to 5.30% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
161 | 315 | 103 | 461 | 608 | 1,648 | 78,487 | 4,576 | 73,911 | 1,514 | 72,070 | ||||||||||||||||||||||||||||||||||
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Gross Maximum Exposure(1) | Net Maximum Exposure(2) | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in million pesos) | ||||||||||||||||
Loans and receivables: | ||||||||||||||||
Advances and refundable deposits | 849 | 840 | 848 | 840 | ||||||||||||
Cash and cash equivalents | 38,319 | 33,684 | 38,101 | 33,621 | ||||||||||||
Short-term investments | 3,338 | 5,964 | 3,338 | 5,963 | ||||||||||||
Foreign administrations | 4,064 | 5,477 | 4,011 | 5,477 | ||||||||||||
Retail subscribers | 3,546 | 3,904 | 3,505 | 3,877 | ||||||||||||
Corporate subscribers | 2,429 | 2,865 | 2,328 | 2,709 | ||||||||||||
Domestic carriers | 1,184 | 703 | 1,184 | 703 | ||||||||||||
Dealers, agents and others | 3,506 | 2,960 | 3,506 | 2,958 | ||||||||||||
Held-to-maturity investments: | ||||||||||||||||
Investment in debt securities | 462 | 2,098 | 462 | 2,098 | ||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||
Investment in debt securities | — | 193 | — | 193 | ||||||||||||
Available-for-sale financial assets | 134 | 131 | 134 | 131 | ||||||||||||
Held-for-trading: | ||||||||||||||||
Short-term investments | 486 | 706 | 486 | 706 | ||||||||||||
Bifurcated embedded derivatives | 6 | 2 | 6 | 2 | ||||||||||||
Foreign currency options | — | 38 | — | 38 | ||||||||||||
Forward foreign exchange contracts | — | 16 | — | 16 | ||||||||||||
Total | 58,323 | 59,581 | 57,909 | 59,332 | ||||||||||||
(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 or other credit enhancements or offsetting arrangements or deposit insurance. |
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Neither past due | Past due but | |||||||||||||||||||
nor impaired | not | |||||||||||||||||||
Total | Class A(1) | Class B(2) | impaired | Impaired | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
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 | — | — | |||||||||||||||
Held-for-trading(3): | ||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | |||||||||||||||
Total | 70,273 | 48,385 | 3,291 | 6,647 | 11,950 | |||||||||||||||
December 31, 2008 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 840 | 703 | 137 | — | — | |||||||||||||||
Cash and cash equivalents | 33,684 | 32,979 | 705 | — | — | |||||||||||||||
Short-term investments | 5,964 | 5,680 | 284 | — | — | |||||||||||||||
Corporate subscribers | 9,188 | 858 | 272 | 1,663 | 6,395 | |||||||||||||||
Retail subscribers | 8,993 | 1,457 | 550 | 1,897 | 5,089 | |||||||||||||||
Foreign administrations | 5,916 | 2,602 | 956 | 1,919 | 439 | |||||||||||||||
Domestic carriers | 877 | 84 | 3 | 616 | 174 | |||||||||||||||
Dealers, agents and others | 3,271 | 2,114 | 444 | 402 | 311 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 2,098 | 2,098 | — | — | — | |||||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||||||
Investment in debt securities | 193 | 193 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 131 | 103 | 28 | — | — | |||||||||||||||
Held-for-trading(3): | ||||||||||||||||||||
Short-term investments | 706 | 706 | — | — | — | |||||||||||||||
Forward foreign currency options | 38 | 38 | — | — | — | |||||||||||||||
Forward foreign exchange contracts | 16 | 16 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 2 | 2 | — | — | — | |||||||||||||||
Total | 71,917 | 49,633 | 3,379 | 6,497 | 12,408 | |||||||||||||||
(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, 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 | — | — | — | — | ||||||||||||||||||
Held-for-trading: | ||||||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | — | ||||||||||||||||||
Total | 70,273 | 51,676 | 3,730 | 1,101 | 1,816 | 11,950 | ||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 840 | 840 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 33,684 | 33,684 | — | — | — | — | ||||||||||||||||||
Short-term investments | 5,964 | 5,964 | — | — | — | — | ||||||||||||||||||
Corporate subscribers | 9,188 | 1,130 | 1,024 | 313 | 326 | 6,395 | ||||||||||||||||||
Retail subscribers | 8,993 | 2,007 | 1,338 | 266 | 293 | 5,089 | ||||||||||||||||||
Foreign administrations | 5,916 | 3,558 | 1,043 | 550 | 326 | 439 | ||||||||||||||||||
Domestic carriers | 877 | 87 | 80 | 87 | 449 | 174 | ||||||||||||||||||
Dealers, agents and others | 3,271 | 2,558 | 48 | 9 | 345 | 311 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 2,098 | 2,098 | — | — | — | — | ||||||||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||||||||||
Investment in debt securities | 193 | 193 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 131 | 131 | — | — | — | — | ||||||||||||||||||
Held-for-trading: | ||||||||||||||||||||||||
Short-term investments | 706 | 706 | — | — | — | — | ||||||||||||||||||
Forward foreign currency options | 38 | 38 | — | — | — | — | ||||||||||||||||||
Forward foreign exchange contracts | 16 | 16 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 2 | 2 | — | — | — | — | ||||||||||||||||||
Total | 71,917 | 53,012 | 3,533 | 1,225 | 1,739 | 12,408 | ||||||||||||||||||
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
Long-term debt, including current portion | 96,450 | 73,358 | ||||||
Notes payable | 2,279 | 553 | ||||||
Total debt | 98,729 | 73,911 | ||||||
Cash and cash equivalents | (38,319 | ) | (33,684 | ) | ||||
Short-term investments | (3,824 | ) | (6,670 | ) | ||||
Net debt | 56,586 | 33,557 | ||||||
Equity attributable to equity holders of PLDT | 98,575 | 105,531 | ||||||
Net consolidated debt to equity ratio | 57 | % | 32 | % | ||||
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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$0.02 per ADS (or a portion thereof) per year for the services rendered by the depositary for administering the ADR program (which fee shall be assessed as of the record date or dates set by the depositary not more than once each calendar year and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distribution); |
• | such fees and expenses as are incurred by the depositary (including without limitation expenses incurred on behalf of holders in compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in the delivery of the common stock or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or regulations; |
• | stock transfer and other taxes and governmental charges (which are payable by the holder or person depositing the common stock), cable, telex and facsimile transmission and delivery charges incurred at the request of the person depositing the common stock or holder delivering the common stock, ADRs or deposited common stock (which are payable by such person or holder), transfer or registration fees for the registration or transfer of deposited common stock in connection with the deposit or withdrawal of the deposited common stock (which are payable by the person depositing or withdrawing deposited common stock, expense by the depositary in the conversion of foreign currency into U.S. dollars; and |
• | any other charge payable by the depositary or its agents in connection with its service as depositary in implementation of the Company’s ADR Program pursuant to Section 4.02, 4.03, 4.04, or 4.05 of the Deposit Agreement, as amended. |
Category of Expenses | Amount Reimbursed for | |||
Investor relations and investor event fees | US$ | 322,075 | ||
Legal and accounting fees incurred in connection with the preparation of Form 20-F, ongoing SEC compliance and listing requirements | 296,345 | |||
Listing fees | 55,513 | |||
Total | US$ | 673,933 | ||
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1. | The qualifications and grounds for disqualification for directorship; |
2. | The requirement that at least two or 20% of the members of our board of directors, whichever is lesser, must be independent directors and the standards/criteria for the determination of independent directors; |
3. | The duties and responsibilities of our board of directors and the individual directors; |
4. | Our board committees, specifically, the governance and nomination committee, audit committee and executive compensation committee, the composition and the principal duties and responsibilities of such committees; |
5. | The role of our chairman in ensuring compliance with the corporate governance principles; |
6. | The role of our president/chief executive officer in ensuring that our organizational and procedural 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; |
7. | The duties and responsibilities of our corporate secretary/assistant corporate secretary in terms of the support services that they need to provide our board in upholding sound corporate governance; |
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8. | The duties and responsibilities of the head of our internal audit organization that would provide our board of directors, management and shareholders with reasonable assurance that our key organizational and procedural controls are appropriate, adequate, effective and reasonably complied with; |
9. | The functions of our independent auditors that would reasonably ensure an environment of sound corporate governance as reflected in our 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 our financial statements; |
10. | Our commitment to respect and promote shareholders’ rights such as voting right, pre-emptive right, inspection right, dividend right, appraisal right, and right to receive information about the background, business experience, compensation and shareholdings of our directors and officers and their transactions with us; |
11. | The requirement to appoint a compliance officer and the duties and responsibilities of such compliance officer including the establishment of an evaluation system to determine and measure compliance with the provisions of our Governance Manual; and |
12. | The penalties for violations of our Governance Manual. |
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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. |
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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2009 | 2008 | |||||||
(in millions) | ||||||||
Audit Fees | Php | 46 | Php | 45 | ||||
All Other Fees | 19 | 19 | ||||||
Total | Php | 65 | Php | 64 | ||||
Total Number of Shares | ||||||||||||||||
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 |
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Total Number of Shares | ||||||||||||||||
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 | ||||||||||||
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 | ||||||||||||
Total | 2,682,956 | |||||||||||||||
(1) | Outside the share buyback program, we did not repurchase any of our shares in the year ended December 31, 2009. | |
(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. |
• | 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 andvice versa. |
• | 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. |
• | 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. |
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• | 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 Governance and Nomination Committee, 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 Governance and Nomination Committee, 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 Governance and Nomination Committee and our Executive Compensation Committee 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. |
Page | ||||
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY ANNUAL FINANCIAL STATEMENTS | ||||
154 | ||||
155 | ||||
F-1 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-8 |
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Philippine Long Distance Telephone Company
Makati City, Philippines
May 13, 2010
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Philippine Long Distance Telephone Company
Makati City, Philippines
May 13, 2010
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2009 | 2008 | |||||||
ASSETS | ||||||||
Noncurrent Assets | ||||||||
Property, plant and equipment (Notes 3, 9, 20 and 28) | 161,256 | 160,326 | ||||||
Investments in associates and joint ventures (Notes 3, 4, 5, 10, 28 and 30) | 22,233 | 1,174 | ||||||
Available-for-sale financial assets (Notes 6 and 28) | 134 | 131 | ||||||
Investment in debt securities — net of current portion (Notes 11 and 28) | 462 | 635 | ||||||
Investment properties (Notes 3, 9, 12 and 28) | 1,210 | 617 | ||||||
Goodwill and intangible assets (Notes 3, 13, 14, 21 and 28) | 13,024 | 10,450 | ||||||
Deferred income tax assets — net (Notes 3, 4, 7 and 28) | 7,721 | 9,605 | ||||||
Prepayments — net of current portion (Notes 3, 5, 18, 26 and 28) | 8,663 | 2,501 | ||||||
Advances and refundable deposits — net of current portion (Note 28) | 1,102 | 1,086 | ||||||
Total Noncurrent Assets | 215,805 | 186,525 | ||||||
Current Assets | ||||||||
Cash and cash equivalents (Notes 15 and 28) | 38,319 | 33,684 | ||||||
Short-term investments (Note 28) | 3,824 | 6,670 | ||||||
Current portion of investment in debt securities (Notes 11 and 28) | — | 1,656 | ||||||
Trade and other receivables — net (Notes 3, 16, 24 and 28) | 14,729 | 15,909 | ||||||
Inventories and supplies (Notes 3, 4, 5, 17 and 28) | 2,165 | 2,069 | ||||||
Derivative financial assets (Note 28) | 6 | 56 | ||||||
Current portion of prepayments (Notes 18 and 28) | 5,098 | 4,164 | ||||||
Current portion of advances and refundable deposits (Note 28) | 202 | 1,825 | ||||||
Total Current Assets | 64,343 | 66,033 | ||||||
TOTAL ASSETS | 280,148 | 252,558 | ||||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Preferred stock, Php10 par value per share, authorized - 822,500,000 shares; issued and outstanding - 441,631,062 shares as at December 31, 2009 and 441,480,512 shares as at December 31, 2008 (Notes 8 and 19) | 4,416 | 4,415 | ||||||
Common stock, Php5 par value per share, authorized — 234,000,000 shares; issued — 189,480,260 shares and outstanding — 186,797,304 shares as at December 31, 2009; and issued — 189,456,127 shares and outstanding 187,483,837 shares as at December 31, 2008 (Notes 8 and 19) | 947 | 947 | ||||||
Treasury stock — 2,682,956 shares as at December 31, 2009 and 1,972,290 shares as at December 31, 2008 (Notes 8, 19 and 28) | (6,405 | ) | (4,973 | ) | ||||
Stock options issued (Note 25) | — | 6 | ||||||
Capital in excess of par value | 62,890 | 68,337 | ||||||
Retained earnings (Notes 8 and 19) | 37,744 | 37,177 | ||||||
Other comprehensive income (Note 6) | (1,017 | ) | (378 | ) | ||||
Total Equity Attributable to Equity Holders of PLDT | 98,575 | 105,531 | ||||||
Non-controlling Interests | 550 | 1,438 | ||||||
TOTAL EQUITY | 99,125 | 106,969 | ||||||
F-1
Table of Contents
December 31, 2009 and 2008
(in million pesos, except par value and number of shares)
2009 | 2008 | |||||||
Noncurrent Liabilities | ||||||||
Interest-bearing financial liabilities — net of current portion (Notes 4, 5, 9, 20, 23, 26 and 28) | 86,079 | 58,910 | ||||||
Deferred income tax liabilities — net (Notes 3, 4, 7 and 28) | 1,321 | 1,288 | ||||||
Derivative financial liabilities (Notes 26 and 28) | 2,751 | 1,761 | ||||||
Pension and other employee benefits (Notes 3, 5, 23, 25, 26 and 28) | 374 | 5,467 | ||||||
Customers’ deposits (Notes 26 and 28) | 2,166 | 2,251 | ||||||
Deferred credits and other noncurrent liabilities (Notes 3, 9, 13, 14, 21, 23 and 28) | 14,438 | 10,582 | ||||||
Total Noncurrent Liabilities | 107,129 | 80,259 | ||||||
Current Liabilities | ||||||||
Accounts payable (Notes 22, 24, 26 and 28) | 19,601 | 18,268 | ||||||
Accrued expenses and other current liabilities (Notes 3, 10, 13, 20, 21, 23, 24, 25, 26, 27 and 28) | 35,446 | 24,381 | ||||||
Derivative financial liabilities (Notes 26 and 28) | — | 87 | ||||||
Provision for assessments (Notes 3, 26, 27 and 28) | 1,555 | 1,555 | ||||||
Current portion of interest-bearing financial liabilities (Notes 4, 5, 9, 20, 23, 26 and 28) | 12,714 | 15,080 | ||||||
Dividends payable (Notes 19, 26 and 28) | 1,749 | 1,379 | ||||||
Income tax payable (Notes 7 and 28) | 2,829 | 4,580 | ||||||
Total Current Liabilities | 73,894 | 65,330 | ||||||
TOTAL LIABILITIES | 181,023 | 145,589 | ||||||
TOTAL EQUITY AND LIABILITIES | 280,148 | 252,558 | ||||||
F-2
Table of Contents
2009 | 2008 | 2007 | ||||||||||
REVENUES | ||||||||||||
Service revenues (Notes 3 and 4) | 145,647 | 142,873 | 135,478 | |||||||||
Non-service revenues (Notes 3, 4 and 5) | 2,346 | 2,964 | 3,226 | |||||||||
147,993 | 145,837 | 138,704 | ||||||||||
EXPENSES | ||||||||||||
Depreciation and amortization (Notes 3, 4 and 9) | 25,607 | 24,709 | 28,613 | |||||||||
Compensation and employee benefits (Notes 3, 5 and 25) | 23,100 | 20,709 | 20,470 | |||||||||
Repairs and maintenance (Notes 12, 17 and 24) | 8,631 | 8,569 | 7,310 | |||||||||
Selling and promotions | 5,749 | 5,695 | 5,541 | |||||||||
Cost of sales (Notes 5, 17, 24 and 26) | 5,432 | 5,252 | 5,127 | |||||||||
Asset impairment (Notes 3, 4, 5, 9, 10, 14, 16, 17, 18, 26 and 28) | 5,061 | 4,180 | 1,317 | |||||||||
Professional and other contracted services (Note 24) | 4,361 | 4,591 | 4,719 | |||||||||
Rent (Notes 3 and 26) | 4,055 | 3,656 | 2,762 | |||||||||
Taxes and licenses (Note 27) | 2,881 | 2,736 | 2,319 | |||||||||
Communication, training and travel | 1,902 | 1,993 | 1,850 | |||||||||
Insurance and security services (Note 24) | 1,264 | 1,196 | 1,197 | |||||||||
Amortization of intangible assets (Notes 3 and 14) | 368 | 377 | 390 | |||||||||
Provisions (Notes 3, 4, 26 and 27) | — | 898 | 666 | |||||||||
Other expenses (Note 24) | 1,700 | 1,225 | 1,306 | |||||||||
90,111 | 85,786 | 83,587 | ||||||||||
57,882 | 60,051 | 55,117 | ||||||||||
OTHER INCOME (EXPENSES) | ||||||||||||
Interest income (Notes 4 and 5) | 1,539 | 1,668 | 1,503 | |||||||||
Foreign exchange gains (losses) — net (Notes 4, 9 and 28) | 909 | (6,170 | ) | 7,990 | ||||||||
Equity share in net earnings (losses) of associates and joint ventures (Notes 4 and 10) | 2 | (176 | ) | (11 | ) | |||||||
Gains (losses) on derivative financial instruments — net (Notes 4 and 28) | (1,006 | ) | 3,115 | (2,849 | ) | |||||||
Financing costs — net (Notes 4, 5, 9, 20 and 28) | (6,556 | ) | (6,104 | ) | (7,088 | ) | ||||||
Other income | 2,069 | 1,665 | 3,419 | |||||||||
(3,043 | ) | (6,002 | ) | 2,964 | ||||||||
INCOME BEFORE INCOME TAX(Note 4) | 54,839 | 54,049 | 58,081 | |||||||||
PROVISION FOR INCOME TAX(Notes 3, 4 and 7) | 14,744 | 19,073 | 18,807 | |||||||||
NET INCOME FOR THE YEAR(Note 4) | 40,095 | 34,976 | 39,274 | |||||||||
ATTRIBUTABLE TO: | ||||||||||||
Equity holders of PLDT (Notes 4, 6 and 8) | 39,781 | 34,317 | 39,289 | |||||||||
Non-controlling interests (Note 4) | 314 | 659 | (15 | ) | ||||||||
40,095 | 34,976 | 39,274 | ||||||||||
Earnings Per Share For The Year Attributable to Common Equity Holders of PLDT(Note 8) | ||||||||||||
Basic | 210.38 | 179.96 | 205.84 | |||||||||
Diluted | 210.36 | 179.95 | 204.88 |
F-3
Table of Contents
2009 | 2008 | 2007 | ||||||||||
NET INCOME FOR THE YEAR(Note 4) | 40,095 | 34,976 | 39,274 | |||||||||
OTHER COMPREHENSIVE INCOME(Note 6) | ||||||||||||
Net gains (losses) on available-for-sale financial assets: | 3 | (9 | ) | 30 | ||||||||
Gains (losses) recognized during the year | 3 | (9 | ) | 32 | ||||||||
Gains removed from other comprehensive income taken to income | — | — | (2 | ) | ||||||||
Foreign currency translation differences of subsidiaries | (657 | ) | 1,490 | (1,849 | ) | |||||||
Net transactions on cash flow hedges — net of tax: | — | (411 | ) | 406 | ||||||||
Net (gains) losses on cash flow hedges | — | (662 | ) | 662 | ||||||||
Income tax related to cash flow hedges | — | 251 | (256 | ) | ||||||||
Total Other Comprehensive Income — Net of Tax | (654 | ) | 1,070 | (1,413 | ) | |||||||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 39,441 | 36,046 | 37,861 | |||||||||
ATTRIBUTABLE TO: | ||||||||||||
Equity holders of PLDT | 39,142 | 35,322 | 37,943 | |||||||||
Non-controlling interests | 299 | 724 | (82 | ) | ||||||||
39,441 | 36,046 | 37,861 | ||||||||||
F-4
Table of Contents
Equity | Total | |||||||||||||||||||||||||||||||||||||||||||
Portion of | Equity | |||||||||||||||||||||||||||||||||||||||||||
Stock | Convertible | Capital in | Other | Attributable to | Non- | |||||||||||||||||||||||||||||||||||||||
Preferred | Common | Treasury | Options | Preferred | Excess of | Retained | Comprehensive | Equity Holders | controlling | |||||||||||||||||||||||||||||||||||
Stock | Stock | Stock | Issued | Stock | Par Value | Earnings | Income | of PLDT | Interests | Total | ||||||||||||||||||||||||||||||||||
Balances as at January 1, 2007 | 4,424 | 942 | — | 40 | 9 | 66,574 | 29,361 | (37 | ) | 101,313 | 1,540 | 102,853 | ||||||||||||||||||||||||||||||||
Total comprehensive income for the year (Notes 4, 6 and 8): | — | — | — | — | — | — | 39,289 | (1,346 | ) | 37,943 | (82 | ) | 37,861 | |||||||||||||||||||||||||||||||
Net income for the year (Notes 4 and 8) | — | — | — | — | — | — | 39,289 | — | 39,289 | (15 | ) | 39,274 | ||||||||||||||||||||||||||||||||
Foreign currency translation differences of subsidiaries | — | — | — | — | — | — | — | (1,782 | ) | (1,782 | ) | (67 | ) | (1,849 | ) | |||||||||||||||||||||||||||||
Net gains on available-for-sale financial assets | — | — | — | — | — | — | — | 30 | 30 | — | 30 | |||||||||||||||||||||||||||||||||
Net transactions on cash flow hedges — net of tax | — | — | — | — | — | — | — | 406 | 406 | — | 406 | |||||||||||||||||||||||||||||||||
Cash dividends (Note 19) | — | — | — | — | — | — | (28,756 | ) | — | (28,756 | ) | (12 | ) | (28,768 | ) | |||||||||||||||||||||||||||||
Issuance of capital stock — net of conversion (Note 19) | (7 | ) | 1 | — | — | (3 | ) | 379 | — | — | 370 | — | 370 | |||||||||||||||||||||||||||||||
Exercised option shares (Note 25) | — | — | — | (31 | ) | — | 104 | — | — | 73 | — | 73 | ||||||||||||||||||||||||||||||||
Business combinations and others (Note 13) | — | — | — | — | — | — | — | — | — | (44 | ) | (44 | ) | |||||||||||||||||||||||||||||||
Balances as at December 31, 2007 | 4,417 | 943 | — | 9 | 6 | 67,057 | 39,894 | (1,383 | ) | 110,943 | 1,402 | 112,345 | ||||||||||||||||||||||||||||||||
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 (Notes 4, 6 and 8): | — | — | — | — | — | — | 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 | |||||||||||||||||||||||||||||||||
Foreign currency translation differences of subsidiaries | — | — | — | — | — | — | — | 1,425 | 1,425 | 65 | 1,490 | |||||||||||||||||||||||||||||||||
Net losses on available-for-sale financial assets | — | — | — | — | — | — | — | (9 | ) | (9 | ) | — | (9 | ) | ||||||||||||||||||||||||||||||
Net transactions on cash flow hedges — net of tax | — | — | — | — | — | — | — | (411 | ) | (411 | ) | — | (411 | ) | ||||||||||||||||||||||||||||||
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 (Note 25) | — | — | — | (3 | ) | — | 10 | — | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||
Redemption of shares (Notes 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 (Notes 4, 6 and 8): | — | — | — | — | — | — | 39,781 | (639 | ) | 39,142 | 299 | 39,441 | ||||||||||||||||||||||||||||||||
Net income for the year (Notes 4 and 8) | — | — | — | — | — | — | 39,781 | — | 39,781 | 314 | 40,095 | |||||||||||||||||||||||||||||||||
Foreign currency translation differences on subsidiaries | — | — | — | — | — | — | — | (642 | ) | (642 | ) | (15 | ) | (657 | ) | |||||||||||||||||||||||||||||
Net gains on available-for-sale financial assets | — | — | — | — | — | — | — | 3 | 3 | — | 3 | |||||||||||||||||||||||||||||||||
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 (Note 25) | — | — | — | (6 | ) | — | 21 | — | — | 15 | — | 15 | ||||||||||||||||||||||||||||||||
Redemption of shares (Notes 8, 19 and 25) | — | — | (1,432 | ) | — | — | — | — | — | (1,432 | ) | (320 | ) | (1,752 | ) | |||||||||||||||||||||||||||||
Acquisition of non-controlling interests (Notes 2 and 13) | — | — | — | — | — | (5,479 | ) | — | — | (5,479 | ) | (1,139 | ) | (6,618 | ) | |||||||||||||||||||||||||||||
Business combinations and others (Note 13) | — | — | — | — | — | — | — | — | — | 708 | 708 | |||||||||||||||||||||||||||||||||
Balances as at December 31, 2009 | 4,416 | 947 | (6,405 | ) | — | — | 62,890 | 37,744 | (1,017 | ) | 98,575 | 550 | 99,125 | |||||||||||||||||||||||||||||||
F-5
Table of Contents
2009 | 2008 | 2007 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Income before income tax (Note 4) | 54,839 | 54,049 | 58,081 | |||||||||
Adjustments for: | ||||||||||||
Depreciation and amortization (Notes 3, 4 and 9) | 25,607 | 24,709 | 28,613 | |||||||||
Interest on loans and other related items — net (Notes 4, 5, 9, 20 and 28) | 5,317 | 5,083 | 5,714 | |||||||||
Asset impairment (Notes 3, 4, 5, 9, 10, 14, 16, 17, 18, 26 and 28) | 5,061 | 4,180 | 1,317 | |||||||||
Incentive plans (Notes 3, 5 and 25) | 1,833 | 1,281 | 1,448 | |||||||||
Pension benefit costs (Notes 3, 5 and 25) | 1,306 | 725 | 1,773 | |||||||||
Accretion on financial liabilities — net (Notes 5, 20 and 28) | 1,062 | 956 | 1,161 | |||||||||
Losses (gains) on derivative financial instruments — net (Notes 4 and 28) | 1,006 | (3,115 | ) | 2,849 | ||||||||
Amortization of intangible assets (Notes 3 and 14) | 368 | 377 | 390 | |||||||||
Equity share in net losses (earnings) of associates and joint ventures (Notes 4 and 10) | (2 | ) | 176 | 11 | ||||||||
Gains on disposal of property, plant and equipment (Note 9) | (127 | ) | (534 | ) | (527 | ) | ||||||
Foreign exchange losses (gains) — net (Notes 4, 9 and 28) | (909 | ) | 6,170 | (7,990 | ) | |||||||
Interest income (Notes 4 and 5) | (1,539 | ) | (1,668 | ) | (1,503 | ) | ||||||
Dividends on preferred stock subject to mandatory redemption (Notes 5, 8 and 20) | — | 4 | 17 | |||||||||
Others | (802 | ) | 830 | (1,242 | ) | |||||||
Operating income before changes in assets and liabilities | 93,020 | 93,223 | 90,112 | |||||||||
Decrease (increase) in: | ||||||||||||
Trade and other receivables | (1,324 | ) | (3,003 | ) | (3,266 | ) | ||||||
Inventories and supplies | (305 | ) | (913 | ) | (76 | ) | ||||||
Prepayments | (1,333 | ) | (877 | ) | 1,862 | |||||||
Advances and refundable deposits | 271 | (1,338 | ) | (307 | ) | |||||||
Increase (decrease) in: | ||||||||||||
Accounts payable | 130 | 5,244 | 4,763 | |||||||||
Accrued expenses and other current liabilities | 8,227 | 2,084 | 3,558 | |||||||||
Pension and other employee benefits | (9,071 | ) | (1,125 | ) | (6,649 | ) | ||||||
Customers’ deposits | 32 | 27 | 12 | |||||||||
Other noncurrent liabilities | (46 | ) | 1 | (1,167 | ) | |||||||
Net cash generated from operations | 89,601 | 93,323 | 88,842 | |||||||||
Income taxes paid | (15,215 | ) | (15,021 | ) | (11,424 | ) | ||||||
Net cash provided by operating activities | 74,386 | 78,302 | 77,418 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Proceeds from: | ||||||||||||
Maturity of short-term investments | 9,728 | 28,476 | 15,935 | |||||||||
Redemption of investment in debt securities | 4,005 | 2,676 | — | |||||||||
Disposal of property, plant and equipment (Note 9) | 932 | 1,015 | 953 | |||||||||
Disposal of investment properties | 18 | 9 | 10 | |||||||||
Disposal of investments in associates | — | 3 | — | |||||||||
Disposal of available-for-sale financial assets | — | 174 | 7 | |||||||||
Payments for: | ||||||||||||
Acquisition of intangibles (Notes 13 and 14) | (21 | ) | (69 | ) | (213 | ) | ||||||
Notes receivable | (80 | ) | — | — | ||||||||
Purchase of investment in debt securities (Note 10) | (3,572 | ) | (3,457 | ) | (264 | ) | ||||||
Short-term investments | (6,838 | ) | (21,072 | ) | (21,429 | ) | ||||||
Purchase of subsidiaries and non-controlling interests — net of cash acquired (Note 13) | (8,989 | ) | (743 | ) | (1,687 | ) | ||||||
Purchase of investments in associates (Note 10) | (18,070 | ) | — | (601 | ) | |||||||
Available-for-sale financial assets | — | (206 | ) | — | ||||||||
Interest received | 1,352 | 1,461 | 1,218 | |||||||||
Decrease (increase) in advances and refundable deposits | 472 | (78 | ) | (424 | ) | |||||||
Interest paid — capitalized to property, plant and equipment (Notes 4, 5, 9, 20 and 28) | (691 | ) | (778 | ) | (542 | ) | ||||||
Additions to property, plant and equipment (Notes 4 and 9) | (27,378 | ) | (24,425 | ) | (24,282 | ) | ||||||
Net cash used in investing activities | (49,132 | ) | (17,014 | ) | (31,319 | ) | ||||||
F-6
Table of Contents
For the Years Ended December 31, 2009, 2008 and 2007
(in million pesos)
2009 | 2008 | 2007 | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from availment of long-term debt (Note 20) | 41,989 | 17,912 | 7,647 | |||||||||
Availment of long-term financing for capital expenditures | 7,993 | 6,614 | 8,746 | |||||||||
Proceeds from notes payable (Note 20) | 2,000 | 660 | 502 | |||||||||
Proceeds from issuance of capital stock | 18 | 8 | 76 | |||||||||
Payments of obligations under finance lease | (24 | ) | (474 | ) | (199 | ) | ||||||
Payments of debt issuance costs (Note 20) | (173 | ) | (149 | ) | (54 | ) | ||||||
Payments of notes payable (Note 20) | (270 | ) | (678 | ) | (193 | ) | ||||||
Payments for redemption of shares (Notes 8, 19 and 28) | (1,752 | ) | (5,281 | ) | (15 | ) | ||||||
Settlements of derivative financial instruments (Note 28) | (1,913 | ) | (2,891 | ) | (2,066 | ) | ||||||
Interest paid — net of capitalized portion (Notes 5, 20 and 28) | (5,239 | ) | (5,167 | ) | (5,891 | ) | ||||||
Settlement of long-term financing for capital expenditures | (4,678 | ) | (5,519 | ) | (6,837 | ) | ||||||
Payments of long-term debt (Note 20) | (18,958 | ) | (13,375 | ) | (18,065 | ) | ||||||
Cash dividends paid (Note 19) | (39,286 | ) | (37,124 | ) | (28,470 | ) | ||||||
Net cash used in financing activities | (20,293 | ) | (45,464 | ) | (44,819 | ) | ||||||
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (326 | ) | 413 | (703 | ) | |||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 4,635 | 16,237 | 577 | |||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 33,684 | 17,447 | 16,870 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | 38,319 | 33,684 | 17,447 | |||||||||
F-7
Table of Contents
1. | Corporate Information |
F-8
Table of Contents
2. | Summary of Significant Accounting Policies |
2009 | 2008 | |||||||||||||||||||
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 System, Inc., or PDSI | Philippines | Cellular and internet broadband distribution services | — | 100.0 | — | — | ||||||||||||||
I-Contacts Corporation, or I-Contacts | Philippines | Customer interaction solutions | — | 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 | Development and sale of software, 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 | — | 100.0 | — | — | ||||||||||||||
Pilipino Telephone Corporation, or Piltel, and Subsidiaries, or Piltel Group* | Philippines | Investment company | — | 99.5 | — | 92.5 | ||||||||||||||
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 | — | 28.3 | ||||||||||||||
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 | — | ||||||||||||||
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2009 | 2008 | |||||||||||||||||||
Place of | Percentage of Ownership | |||||||||||||||||||
Name of Subsidiary | Incorporation | Principal Business Activity | Direct | Indirect | Direct | Indirect | ||||||||||||||
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 | — | — | — | ||||||||||||||
PLDT-Maratel, Inc., or Maratel | Philippines | Telecommunications services | 97.8 | — | 97.5 | — | ||||||||||||||
Bonifacio Communications Corporation, or BCC | Philippines | Telecommunications, infrastructure and related value-added services | 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 interaction solutions 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 | ||||||||||||||
ePLDT Ventus, Inc., or Ventus | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Vocativ Systems, Inc., or Vocativ | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Parlance Systems, Inc., or Parlance | Philippines | Customer interaction solutions | — | 100.0 | — | 100.0 | ||||||||||||||
Infocom Technologies, Inc., or Infocom | Philippines | Internet access 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 | — | 10.8 | ||||||||||||||
Digital Paradise Thailand, or DigiPar Thailand | Thailand | Internet access services | — | 87.5 | — | 87.5 | ||||||||||||||
netGames, Inc., or netGames | Philippines | Publisher of online games | — | 80.0 | — | 80.0 | ||||||||||||||
Digital Paradise, Inc., or Digital Paradise | Philippines | Internet access services | — | 75.0 | — | 75.0 | ||||||||||||||
Level Up! (Philippines), Inc., or Level Up! | Philippines | Publisher of online games | — | 60.0 | — | 60.0 |
* | On August 17, 2009, Smart acquired the cellular mobile telephone business of Piltel. |
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• | IFRS 2, Share-based Payment — Vesting Condition and Cancellations; |
• | Revised IFRS 3, Business Combinations and International Accounting Standards, or IAS, 27, Consolidated and Separate Financial Statements (effective July 1, 2009 but early adopted by the PLDT Group effective January 1, 2009) including consequential amendments to IFRS 7, Financial Instruments: Disclosures, IAS 21, The Effects of Changes in Foreign Exchange Rates, IAS 28, Investments in Associates, IAS 31, Interests in Joint VenturesandIAS 39, Financial Instruments: Recognition and Measurement; |
• | Amendments to IFRS 7, Financial Instruments: Disclosures — Improving Disclosures about Financial Instruments; |
• | IFRS 8, Operating Segments; |
• | Amendments to IAS 1, Presentation of Financial Statements; |
• | Revised IAS 23, Borrowing Costs; |
• | Amendments to IAS 27, Consolidated and Separate Financial Statements — Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate; |
• | Amendments to IAS 32, Financial Instruments: PresentationandIAS 1, Presentation of Financial Statements — Puttable Financial Instruments and Obligations Arising on Liquidation; |
• | IFRIC 13, Customer Loyalty Programmes; |
• | IFRIC 15, Agreement for Construction of Real Estate; |
• | IFRIC 16, Hedges of a Net Investment in a Foreign Operation; |
• | IFRIC 18, Transfer of Assets from Customers;and |
• | Improvements to IFRSs (2008). |
• | IFRS 2, Share-based Payment — Vesting Condition and Cancellations.The standard has been revised to clarify the definition of a vesting condition and prescribes the treatment of an award that is effectively cancelled. It defines a vesting condition as a condition that includes an explicit or implicit requirement to provide services. It further requires non-vesting conditions to be treated in a similar fashion to market conditions. Failure to satisfy a non-vesting condition that is within the control of either the entity or the counterparty is accounted for as cancellation. However, failure to satisfy a non-vesting condition that is beyond the control of either party does not give rise to a cancellation. The adoption ofIFRS 2revisions did not have any impact on our consolidated financial position and performance. |
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• | Revised IFRS 3, Business CombinationsandIAS 27, Consolidated and Separate Financial Statements.The revisedIFRS 3was adopted on January 1, 2009. It introduces significant changes in the accounting for business combinations occurring after January 1, 2009. Changes affect the valuation of non-controlling interests, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combination achieved in stages. These changes impact the amount of goodwill recognized, the reported results in the year that an acquisition occurs, and future reported results. |
• | Amendments to IFRS 7, Financial Instruments: Disclosures — Improving Disclosures about Financial Instruments.These amendments toIFRS 7introduce enhanced disclosures about fair value measurement and liquidity risk. The amendments toIFRS 7require fair value measurements for each class of financial instruments recorded and measured at fair value are to be disclosed by the source of inputs, using the following three-level hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); (b) inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). The level within which the fair value measurement is categorized must be based on the lowest level of input to the instrument’s valuation that is significant to the fair value measurement in its entirety. In addition, a reconciliation between the beginning and ending balance for Level 3 fair value measurements is now required, as well as significant transfers between levels in the fair value hierarchy. |
• | IFRS 8, Operating Segments.IFRS 8replacesIAS 14, Segment Reportingand adopts a full management approach in identifying, measuring and disclosing the results of an entity’s operating segments. The information required to report is similar to what management uses internally for evaluating the performance of operating segments and allocating resources to those segments. In cases where such information is different from those required to be reported in the consolidated statement of financial position and consolidated income statement, the entity needs to provide explanations and reconciliations of the differences. The PLDT Group concluded that the operating segments determined in accordance withIFRS 8are the same as the business segments previously identified underIAS 14. Additional disclosures required by the new standard are shown inNote 4 — Operating Segment Information. |
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• | Amendments to IAS 1, Presentation of Financial Statements.The revised standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owner, while non-owner changes in equity are presented with a reconciliation for each component of equity. In addition, these amendments introduce a new statement of comprehensive income that combines all items of income and expenses recognized in the profit or loss together with ‘other comprehensive income’. Entities may choose to present all items in one statement, or to present two linked statements, a separate income statement and a statement of comprehensive income. These amendments also prescribe additional requirements in the presentation of the statement of financial position and owner’s equity as well as additional disclosures. The PLDT Group has elected to present two linked statements together with additional presentation and disclosures provided on the face of the financial statements or notes, where applicable. In addition, we also changed the caption consolidated balance sheet to consolidated statement of financial position. |
• | Revised IAS 23, Borrowing Costs.The standard has been revised to require capitalization of borrowing costs when such costs relate to construction or production of a qualifying asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. The adoption of revisedIAS 23did not have any impact in our consolidated financial statements as we previously capitalized borrowing costs eligible for capitalization. |
• | Amendments to IAS 27, Consolidated and Separate Financial Statements — Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate.These amendments prescribe changes in respect of the holding companies’ separate financial statements including: (a) the deletion of ‘cost method’, making the distinction between pre- and post-acquisition profits no longer required; and (b) in cases of reorganizations where a new parent is inserted above an existing parent of the group (subject to meeting specific requirements), the cost of the subsidiary is the previous carrying amount of its share of equity items in the subsidiary rather than its fair value. All dividends will be recognized in profit or loss. However, the payment of such dividends requires the entity to consider whether there is an indicator of impairment. The adoption of these amendments toIAS 27is applicable only to PLDT’s separate financial statements and did not have any impact in our consolidated financial statements. |
• | Amendments to IAS 32, Financial Instruments: PresentationandIAS 1, Presentation of Financial Statements — Puttable Financial Instruments and Obligations Arising on Liquidation.These amendments specify, among others, that puttable financial instruments will be classified as equity if they have all of the following specified features: (a) the instrument entitles the holder to require the entity to repurchase or redeem the instrument (either on an ongoing basis or on liquidation) for a pro rata share of the entity’s net assets; (b) the instrument is in the most subordinate class of instruments, with no priority over other claims to the assets of the entity on liquidation; (c) all instruments in the subordinate class have identical features; (d) the instrument does not include any contractual obligation to pay cash or financial assets other than the holder’s right to a pro rata share of the entity’s net assets; and (e) the total expected cash flows attributable to the instrument over its life are based substantially on the profit or loss, a change in recognized net assets, or a change in the fair value of the recognized and unrecognized net assets of the entity over the life of the instrument. The adoption of these amendments toIAS 32andIAS 1 did not have any impact in our consolidated financial statements. |
• | IFRIC 13, Customer Loyalty Programmes.This interpretation requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the award credits and realized as income over the period that the award credits are redeemed or expired. The adoption of this new interpretation did not have significant impact on our financial position and financial performance. Our accounting policies were updated to conform with the requirements ofIFRIC 13. |
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• | IFRIC 15, Agreements for Construction of Real Estate.This interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate directly or through subcontractors. This interpretation requires that revenue on construction of real estate be recognized only upon completion, except when such contract qualifies as construction contract to be accounted for underIAS 11, Construction Contracts, or involves rendering of services in which case revenue is recognized based on stage of completion. Contracts involving provision of services with the construction materials and where the risks and reward of ownership are transferred to the buyer on a continuous basis will also be accounted for based on stage of completion. The adoption of this new interpretation did not have any impact in our consolidated financial statements as we are not engaged in construction of real estate. |
• | IFRIC 16, Hedges of a Net Investment in a Foreign Operation.This interpretation provides guidance on identifying foreign currency risks that qualify for hedge accounting in the hedge of net investment, where within the group the hedging instrument can be held in the hedge of a net investment; and how an entity should determine the amount of foreign currency gains or losses, relating to both the net investment and the hedging instrument, to be reclassified to profit or loss from the foreign currency translation reserve on disposal of the net investment. The adoption of this new interpretation did not have any impact in our consolidated financial statements as we do not enter in such type of hedge accounting transactions. |
• | IFRIC 18, Transfer of Assets from Customers.IFRIC 18provides guidance to all entities that receive from customers an item of property, plant and equipment or cash for the acquisition or construction of such item and such item is used to connect the customer to a network or to provide ongoing access to a supply of goods or services, or both. The interpretation requires an assessment of whether an item of property, plant and equipment or cash for the acquisition or construction of such item meets the definition of an asset. If the terms of the agreement are within the scope of this interpretation, a transfer of an item of property, plant and equipment would be an exchange for dissimilar goods or services. Consequently, the exchange is regarded as a transaction which generates revenue. This interpretation is applied prospectively to transfer of assets from customers received in periods beginning on or after July 1, 2009. Entities may however choose to apply this interpretation to earlier periods, provided valuations can be obtained at the time the transfer occurred. The adoption of this interpretation did not have any impact in our consolidated financial statements. |
• | IAS 1, Presentation of Financial Statements.Assets and liabilities classified as held-for-trading are not automatically classified as current in the statement of financial position. |
• | IAS 16, Property, Plant and Equipment.The amendment replaces the term ‘net selling price’ with ‘fair value less costs to sell’, to be consistent withIFRS 5, Noncurrent Assets Held-for-Sale and Discontinued OperationsandIAS 36, Impairment of Asset. Items of property, plant and equipment held for rental that are routinely sold in the ordinary course of business after rental, are transferred to inventory when rental ceases and they are held for sale. Proceeds of such sales are subsequently shown as revenue. Cash payments on initial recognition of such items, the cash receipts from rents and subsequent sales are all shown as cash flows from operating activities. |
• | IAS 18, Revenue.The amendment provides additional guidance (which accompanies the standard) to determine whether an entity is acting as a principal or as agent. The features indicating an entity is acting as a principal are whether the entity: (a) has primary responsibility for providing the goods or services; (b) has inventory risk; (c) has discretion in establishing prices; and (d) bears the credit risk. |
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• | IAS 19, Employee Benefits.Revises the definition of ‘past service costs’ to include reductions in benefits related to past services (‘negative past service costs’) and to exclude reductions in benefits related to future services that arise from plan amendments. Amendments to plans that result in a reduction in benefits related to future services are accounted for as a curtailment. Revises the definition of ‘return on plan assets’ to exclude plan administration costs if they have already been included in the actuarial assumptions used to measure the defined benefit obligation. Revises the definition of ‘short-term’ and ‘other long-term’ employee benefits to focus on the point in time at which the liability is due to be settled. Deletes the reference to the recognition of contingent liabilities to ensure consistency withIAS 37, Provisions, Contingent Liabilities and Contingent Assets. |
• | IAS 23, Borrowing Costs.Revises the definition of borrowing costs to consolidate the types of items that are considered components of ‘borrowing costs’, i.e., components of the interest expense calculated using the effective interest rate method. |
• | IAS 28, Investments in Associates.If an associate is accounted for at fair value in accordance withIAS 39,only the requirement ofIAS 28to disclose the nature and extent of any significant restrictions on the ability of the associate to transfer funds to the entity in the form of cash or repayment of loans will apply. An investment in an associate is a single asset for the purpose of conducting the impairment test. Therefore, any impairment test is not separately allocated to the goodwill included in the investment balance. |
• | IAS 31, Interests in Joint Ventures.If a joint venture is accounted for at fair value, in accordance withIAS 39, only the requirements ofIAS 31to disclose the commitments of the venture and the joint venture, as well as summary financial information about the assets, liabilities, income and expense will apply. |
• | IAS 36, Impairment of Assets.When discounted cash flows are used to estimate ‘fair value less cost to sell’, additional disclosure is required about the discount rate, consistent with disclosures required when the discounted cash flows are used to estimate ‘value in use’. |
• | IAS 38, Intangible Assets.Expenditure on advertising and promotional activities is recognized as an expense when the entity either has the right to access the goods or has received the services. Advertising and promotional activities now specifically include mail order catalogues. Deletes references to there being rarely, if ever, persuasive evidence to support an amortization method for finite life intangible assets that results in a lower amount of accumulated amortization than under the straight-line method, thereby effectively allowing the use of the unit of production method. |
• | IAS 39, Financial Instruments: Recognition and Measurement.Changes in circumstances relating to derivatives — specifically derivatives designated or de-designated as hedging instruments after initial recognition are not reclassifications. Removes the reference to a ‘segment’ when determining whether an instrument qualifies as a hedge. Requires the use of the revised effective interest rate (rather than the original effective interest rate) when remeasuring a debt instrument on the cessation of fair value hedge accounting. |
• | IAS 40, Investment Property.Revises the scope (and the scope ofIAS 16) to include property that is being constructed or developed for future use as an investment property. Where an entity is unable to determine the fair value of an investment property under construction, but expects to be able to determine its fair value on completion, the investment under construction will be measured at cost until such time as fair value can be determined or construction is complete. |
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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 2even though they are out of scope of RevisedIFRS 3. |
• | 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 only apply if specifically required for such noncurrent assets or discontinued operations. |
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• | 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. |
• | IAS 1, Presentation of Financial Statements.The 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. |
• | 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. |
• | 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 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 an acquiree at a future date, applies only to binding forward contracts, and not derivative contracts where further actions by either party are still 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 affect 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, to embedded derivatives in contracts acquired in a combination between entities or businesses under common control or 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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3. | Management’s Use of Judgments, Estimates and Assumptions |
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4. | Operating Segment Information |
• | Wireless — wireless telecommunications services provided through our cellular service providers namely, Smart, Piltel (on August 17, 2009, Smart acquired the cellular business of Piltel) and CURE; SBI, BOW, Airborne Access and PDSI, our wireless broadband service providers; Wolfpac and Chikka Group, our wireless content operators; and Mabuhay Satellite and ACeS Philippines, our satellite operators; |
• | 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 interaction solutions provided under the umbrella brand nameePLDT Ventus, including Ventus, Parlance and Vocativ; and 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 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, 2009 | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
External customer: | 96,560 | 41,318 | 10,115 | — | 147,993 | |||||||||||||||
Service revenues | 94,865 | 41,085 | 9,697 | — | 145,647 | |||||||||||||||
Non-service revenues (Note 5) | 1,695 | 233 | 418 | — | 2,346 | |||||||||||||||
Inter-segment transactions: | 964 | 10,055 | 1,434 | (12,453 | ) | — | ||||||||||||||
Service revenues | 964 | 10,055 | 1,234 | (12,253 | ) | — | ||||||||||||||
Non-service revenues | — | — | 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, 26 and 28) | 2,026 | 2,901 | 134 | — | 5,061 | |||||||||||||||
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 | |||||||||||||
Financing costs — net (Notes 5, 9, 20 and 28) | 2,619 | 3,796 | 171 | (30 | ) | 6,556 | ||||||||||||||
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 | |||||||||||||||
EBITDA for the year | 59,411 | 25,215 | 1,330 | 238 | 86,194 | |||||||||||||||
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 | 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 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 | |||||||||||||||
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 | |||||||||||||
EBITDA for the year | 60,967 | 25,854 | 1,056 | 119 | 87,996 | |||||||||||||||
EBITDA margin for the year | 65 | % | 52 | % | 10 | % | — | 62 | % | |||||||||||
Core income for the year | 30,250 | 7,890 | 138 | (64 | ) | 38,214 |
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Inter-segment | ||||||||||||||||||||
Wireless | Fixed Line | ICT | Transactions | Consolidated | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
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 | 16,728 | 7,651 | 824 | — | 25,203 | |||||||||||||||
As at and for the year ended December 31, 2007 | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
External customer: | 88,867 | 40,117 | 9,720 | — | 138,704 | |||||||||||||||
Service revenues | 86,067 | 39,836 | 9,575 | — | 135,478 | |||||||||||||||
Non-service revenues (Note 5) | 2,800 | 281 | 145 | — | 3,226 | |||||||||||||||
Inter-segment transactions: | 432 | 8,715 | 602 | (9,749 | ) | — | ||||||||||||||
Service revenues | 432 | 8,715 | 480 | (9,627 | ) | — | ||||||||||||||
Non-service revenues | — | — | 122 | (122 | ) | — | ||||||||||||||
Total revenues | 89,299 | 48,832 | 10,322 | (9,749 | ) | 138,704 | ||||||||||||||
Results | ||||||||||||||||||||
Depreciation and amortization (Notes 3 and 9) | 12,202 | 15,477 | 934 | — | 28,613 | |||||||||||||||
Asset impairment (Notes 3, 5, 9, 10, 14, 16, 17 and 28) | 563 | 43 | 711 | — | 1,317 | |||||||||||||||
Provisions (Notes 3, 26 and 27) | — | 666 | — | — | 666 | |||||||||||||||
Interest income (Note 5) | 1,186 | 296 | 21 | — | 1,503 | |||||||||||||||
Equity share in net losses of associates and joint ventures (Note 10) | — | — | (11 | ) | — | (11 | ) | |||||||||||||
Financing costs — net (Notes 5, 9, 20 and 28) | 2,299 | 4,657 | 132 | — | 7,088 | |||||||||||||||
Provision for (benefit from) income tax (Notes 3 and 7) | 15,566 | 3,358 | (117 | ) | — | 18,807 | ||||||||||||||
Net income (loss) for the year / Segment profit (loss) for the year | 31,780 | 7,519 | (94 | ) | 69 | 39,274 | ||||||||||||||
EBITDA for the year | 57,129 | 26,418 | 1,140 | 90 | 84,777 | |||||||||||||||
EBITDA margin for the year | 66 | % | 54 | % | 11 | % | — | 63 | % | |||||||||||
Core income for the year | 29,771 | 5,869 | 687 | 23 | 36,350 | |||||||||||||||
Assets and liabilities | ||||||||||||||||||||
Operating assets | 89,984 | 180,529 | 17,663 | (63,126 | ) | 225,050 | ||||||||||||||
Investments in associates and joint ventures (Notes 3, 5, 10 and 28) | 724 | — | 627 | — | 1,351 | |||||||||||||||
Deferred income tax assets — net (Notes 3, 7 and 28) | 1,640 | 12,040 | 77 | — | 13,757 | |||||||||||||||
Total assets | 92,348 | 192,569 | 18,367 | (63,126 | ) | 240,158 | ||||||||||||||
Operating liabilities | 50,828 | 78,323 | 5,697 | (9,101 | ) | 125,747 | ||||||||||||||
Deferred income tax liabilities — net (Notes 3, 7 and 28) | 1,571 | — | 495 | — | 2,066 | |||||||||||||||
Total liabilities | 52,399 | 78,323 | 6,192 | (9,101 | ) | 127,813 | ||||||||||||||
Other segment information | ||||||||||||||||||||
Capital expenditures | 14,259 | 9,886 | 679 | — | 24,824 |
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated EBITDA | 86,194 | 87,996 | 84,777 | |||||||||
Amortization of intangible assets (Notes 3 and 14) | (368 | ) | (377 | ) | (390 | ) | ||||||
Depreciation and amortization (Notes 3 and 9) | (25,607 | ) | (24,709 | ) | (28,613 | ) | ||||||
Asset impairment: | ||||||||||||
Goodwill and intangible assets (Notes 3, 5 and 14) | (379 | ) | (2,450 | ) | (1,244 | ) | ||||||
Property, plant and equipment (Notes 3, 5 and 9) | (634 | ) | (104 | ) | — | |||||||
Investments in associates and joint ventures (Notes 3, 5 and 10) | — | (282 | ) | — | ||||||||
Reversal of impairment in investment in debt securities (Notes 3 and 5) | — | — | 616 | |||||||||
Prepayments and others (Notes 3, 5, 18 and 26) | (1,324 | ) | (23 | ) | (29 | ) | ||||||
Consolidated operating profit for the year | 57,882 | 60,051 | 55,117 | |||||||||
Interest income (Note 5) | 1,539 | 1,668 | 1,503 | |||||||||
Foreign exchange gains (losses) — net (Notes 9 and 28) | 909 | (6,170 | ) | 7,990 | ||||||||
Equity in net earnings (losses) of associates and joint ventures (Note 10) | 2 | (176 | ) | (11 | ) | |||||||
Gains (losses) on derivative financial instruments — net (Note 28) | (1,006 | ) | 3,115 | (2,849 | ) | |||||||
Financing costs — net (Notes 5, 9, 20 and 28) | (6,556 | ) | (6,104 | ) | (7,088 | ) | ||||||
Nonrecurring gains — net | 2,069 | 1,665 | 3,419 | |||||||||
Consolidated income before income tax | 54,839 | 54,049 | 58,081 | |||||||||
Provision for income tax (Notes 3 and 7) | 14,744 | 19,073 | 18,807 | |||||||||
�� | ||||||||||||
Consolidated net income for the year | 40,095 | 34,976 | 39,274 | |||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated core income for the year | 41,138 | 38,214 | 36,350 | |||||||||
Foreign exchange gains (losses) — net (Notes 9 and 28) | 908 | (6,170 | ) | 7,990 | ||||||||
Core income adjustment on equity share in net earnings of associates and joint ventures | (517 | ) | — | — | ||||||||
Gains (losses) on derivative financial instruments — net, excluding hedge cost (Note 28) | (407 | ) | 3,934 | (1,724 | ) | |||||||
Asset impairment on noncurrent assets | (1,948 | ) | (2,486 | ) | (657 | ) | ||||||
Other nonrecurring losses (Notes 3 and 9) | — | — | (734 | ) | ||||||||
Net tax effect of aforementioned adjustments | 607 | 825 | (1,936 | ) | ||||||||
Net income for the year attributable to equity holders of PLDT (Notes 6 and 8) | 39,781 | 34,317 | 39,289 | |||||||||
Net income (loss) for the year attributable to non-controlling interests | 314 | 659 | (15 | ) | ||||||||
Consolidated net income for the year | 40,095 | 34,976 | 39,274 | |||||||||
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Wireless services | ||||||||||||
Service revenues: | ||||||||||||
Cellular | 87,829 | 87,410 | 82,319 | |||||||||
Wireless broadband, satellite and others | 7,036 | 5,696 | 3,748 | |||||||||
94,865 | 93,106 | 86,067 | ||||||||||
Non-service revenues: | ||||||||||||
Sale of cellular handsets, cellular SIM-packs and broadband data modems | 1,695 | 2,259 | 2,800 | |||||||||
Total wireless revenues | 96,560 | 95,365 | 88,867 | |||||||||
Fixed line services | ||||||||||||
Services revenues: | ||||||||||||
Local exchange | 15,530 | 15,794 | 16,068 | |||||||||
International long distance | 6,250 | 7,044 | 8,661 | |||||||||
National long distance | 6,239 | 6,143 | 6,277 | |||||||||
Data and other network | 12,585 | 10,864 | 8,470 | |||||||||
Miscellaneous | 481 | 471 | 360 | |||||||||
41,085 | 40,316 | 39,836 | ||||||||||
Non-service revenues: | ||||||||||||
Sale of computers | 233 | 420 | 281 | |||||||||
Total fixed line revenues | 41,318 | 40,736 | 40,117 | |||||||||
ICT services | ||||||||||||
Service revenues: | ||||||||||||
Knowledge processing solutions | 5,215 | 5,272 | 5,261 | |||||||||
Customer interaction solutions | 2,676 | 2,922 | 2,962 | |||||||||
Internet and online gaming | 1,079 | 945 | 902 | |||||||||
Data center and others | 727 | 312 | 450 | |||||||||
9,697 | 9,451 | 9,575 | ||||||||||
Non-service revenues: | ||||||||||||
Point-product-sales | 418 | 285 | 145 | |||||||||
Total ICT revenues | 10,115 | 9,736 | 9,720 | |||||||||
Total products and services from external customers | 147,993 | 145,837 | 138,704 | |||||||||
5. | Income and Expenses |
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Sale of computers, cellular handsets, cellular SIM-packs and broadband data modems | 1,928 | 2,679 | 3,081 | |||||||||
Point-product-sales | 418 | 285 | 145 | |||||||||
(Note 4) | 2,346 | 2,964 | 3,226 | |||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Salaries and other employee benefits | 19,468 | 18,286 | 16,645 | |||||||||
Incentive plans (Notes 3 and 25) | 1,833 | 1,281 | 1,448 | |||||||||
Pension benefit costs (Notes 3 and 25) | 1,306 | 725 | 1,773 | |||||||||
Manpower rightsizing program, or MRP | 493 | 417 | 604 | |||||||||
23,100 | 20,709 | 20,470 | ||||||||||
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Cost of computers, cellular handsets, cellular SIM-packs sold and broadband data modems | 4,690 | 4,573 | 4,713 | |||||||||
Cost of point-product-sales | 584 | 511 | 254 | |||||||||
Cost of satellite air time and terminal units (Notes 24 and 26) | 158 | 168 | 160 | |||||||||
5,432 | 5,252 | 5,127 | ||||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Trade and other receivables (Notes 3 and 16) | 2,335 | 1,079 | 417 | |||||||||
Property, plant and equipment (Notes 3 and 9) | 634 | 104 | — | |||||||||
Inventories and supplies (Notes 3 and 17) | 389 | 242 | 243 | |||||||||
Goodwill and intangible assets (Notes 3 and 14) | 379 | 2,450 | 1,244 | |||||||||
Investments in associates and joint ventures (Notes 3 and 10) | — | 282 | — | |||||||||
Reversal of impairment in investment in debt securities (Note 3) | — | — | (616 | ) | ||||||||
Prepayments and others (Notes 3, 18 and 26) | 1,324 | 23 | 29 | |||||||||
(Note 4) | 5,061 | 4,180 | 1,317 | |||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Interest income on other loans and receivables | 1,406 | 1,545 | 1,270 | |||||||||
Interest income on fair value through profit or loss | 86 | 58 | 224 | |||||||||
Interest income on assets held-to-maturity | 47 | 65 | 9 | |||||||||
(Note 4) | 1,539 | 1,668 | 1,503 | |||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Interest on loans and other related items (Notes 20 and 28) | 6,008 | 5,861 | 6,256 | |||||||||
Accretion on financial liabilities — net (Notes 20 and 28) | 1,062 | 956 | 1,161 | |||||||||
Financing charges | 177 | 61 | 196 | |||||||||
Capitalized interest (Note 9) | (691 | ) | (778 | ) | (542 | ) | ||||||
Dividends on preferred stock subject to mandatory redemption (Note 20) | — | 4 | 17 | |||||||||
(Note 4) | 6,556 | 6,104 | 7,088 | |||||||||
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6. | Other Comprehensive Income |
Income tax | ||||||||||||||||||||||||
related to | Cash flow | Foreign | Available-for- | |||||||||||||||||||||
Cash flow | cash flow | hedges net | currency | sale financial | ||||||||||||||||||||
hedges | hedges | of tax | translation | assets | Total | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Balance at January 1, 2007 | — | 5 | 5 | (44 | ) | 2 | (37 | ) | ||||||||||||||||
Other comprehensive income for the year | 662 | (256 | ) | 406 | (1,782 | ) | 30 | (1,346 | ) | |||||||||||||||
Balance as at December 31, 2007 | 662 | (251 | ) | 411 | (1,826 | ) | 32 | (1,383 | ) | |||||||||||||||
Balance at January 1, 2008 | 662 | (251 | ) | 411 | (1,826 | ) | 32 | (1,383 | ) | |||||||||||||||
Other comprehensive income for the year | (662 | ) | 251 | (411 | ) | 1,425 | (9 | ) | 1,005 | |||||||||||||||
Balance as at December 31, 2008 | — | — | — | (401 | ) | 23 | (378 | ) | ||||||||||||||||
Balance at January 1, 2009 | — | — | — | (401 | ) | 23 | (378 | ) | ||||||||||||||||
Other comprehensive income for the year | — | — | — | (642 | ) | 3 | (639 | ) | ||||||||||||||||
Balance as at December 31, 2009 | — | — | — | (1,043 | ) | 26 | (1,017 | ) | ||||||||||||||||
7. | Income Tax |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets | 7,721 | 9,605 | ||||||
Net deferred income tax liabilities | (1,321 | ) | (1,288 | ) | ||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets: | ||||||||
Unearned revenues | 3,412 | 4,389 | ||||||
Unamortized past service pension costs | 2,974 | 959 | ||||||
Accumulated provision for doubtful accounts | 2,708 | 3,005 | ||||||
Unrealized foreign exchange losses | 1,291 | 2,088 | ||||||
Derivative financial instruments | 825 | 540 | ||||||
Provision for impaired assets | 767 | 533 | ||||||
Accumulated write-down of inventories to net realizable values | 293 | 270 | ||||||
NOLCO | 44 | 22 | ||||||
Asset impairment | 24 | — | ||||||
MCIT | 21 | 770 | ||||||
Capitalized taxes and duties — net of amortization | (246 | ) | (306 | ) | ||||
Capitalized foreign exchange differential — net of depreciation | (495 | ) | (627 | ) | ||||
Pension and other employee benefits | (891 | ) | 1,147 | |||||
Undepreciated capitalized interest charges | (2,976 | ) | (3,230 | ) | ||||
Others | (30 | ) | 45 | |||||
7,721 | 9,605 | |||||||
Net deferred income tax liabilities: | ||||||||
Unearned revenues | 1,047 | 898 | ||||||
Pension and other employee benefits | 100 | 384 | ||||||
Fair value adjustment on fixed assets | (332 | ) | — | |||||
Intangible assets and fair value adjustments on assets acquired — net of amortization | (478 | ) | (616 | ) | ||||
Undepreciated capitalized interest charges | (536 | ) | (679 | ) | ||||
Unrealized foreign exchange gains | (879 | ) | (782 | ) | ||||
Asset retirement obligation — net of undepreciated capitalized asset | — | 329 | ||||||
Accumulated provision for doubtful accounts | — | 223 | ||||||
Provision for impaired assets | — | 210 | ||||||
Gain on debt exchange and debt restructuring transactions | — | (1,197 | ) | |||||
Others | (243 | ) | (58 | ) | ||||
(1,321 | ) | (1,288 | ) | |||||
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Movements of net deferred income tax assets (liabilities) as at December 31, 2009 and 2008 are as follows: |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Net deferred income tax assets — balance at beginning of year | 9,605 | 13,757 | ||||||
Net deferred income tax liabilities — balance at beginning of year | (1,288 | ) | (2,066 | ) | ||||
Net balance at beginning of year | 8,317 | 11,691 | ||||||
Business combinations (Note 13) | (349 | ) | (1 | ) | ||||
Provision for deferred income tax | (656 | ) | (2,715 | ) | ||||
Excess MCIT deducted against RCIT due | (766 | ) | (857 | ) | ||||
Movement charged directly to equity | — | 251 | ||||||
Others | (146 | ) | (52 | ) | ||||
Net balance at end of year | 6,400 | 8,317 | ||||||
Net deferred income tax assets — balance at end of year | 7,721 | 9,605 | ||||||
Net deferred income tax liabilities — balance at end of year | (1,321 | ) | (1,288 | ) | ||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Deferred income tax assets: | ||||||||
Deferred income tax assets to be recovered after more than 12 months | 9,565 | 12,581 | ||||||
Deferred income tax assets to be recovered within 12 months | 3,605 | 1,283 | ||||||
13,170 | 13,864 | |||||||
Deferred income tax liabilities: | ||||||||
Deferred income tax liabilities to be recovered after more than 12 months | (4,793 | ) | (3,660 | ) | ||||
Deferred income tax liabilities to be recovered within 12 months | (656 | ) | (599 | ) | ||||
(5,449 | ) | (4,259 | ) | |||||
Net deferred income tax assets | 7,721 | 9,605 | ||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Deferred income tax assets: | ||||||||
Deferred income tax assets to be recovered after more than 12 months | 1,161 | 1,147 | ||||||
Deferred income tax assets to be recovered within 12 months | 20 | 1,111 | ||||||
1,181 | 2,258 | |||||||
Deferred income tax liabilities: | ||||||||
Deferred income tax liabilities to be recovered after more than 12 months | (2,289 | ) | (2,163 | ) | ||||
Deferred income tax liabilities to be recovered within 12 months | (213 | ) | (1,383 | ) | ||||
(2,502 | ) | (3,546 | ) | |||||
Net deferred income tax liabilities | (1,321 | ) | (1,288 | ) | ||||
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Current | 14,088 | 16,358 | 10,776 | |||||||||
Deferred | 656 | 2,715 | 8,031 | |||||||||
14,744 | 19,073 | 18,807 | ||||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Provision for income tax at the applicable statutory tax rates | 16,452 | 18,917 | 20,328 | |||||||||
Tax effects of: | ||||||||||||
Net movement in unrecognized deferred income tax assets | 3,979 | (576 | ) | 823 | ||||||||
Non-deductible expenses | 201 | 724 | 333 | |||||||||
Equity share in net losses (earnings) of associates and joint ventures | (1 | ) | 62 | 4 | ||||||||
Loss (income) subject to lower tax rate | (443 | ) | 1,408 | (1,752 | ) | |||||||
Income subject to final tax | (502 | ) | (616 | ) | (509 | ) | ||||||
Income not subject to income tax | (1,483 | ) | (846 | ) | (420 | ) | ||||||
Difference between OSD and itemized deductions | (3,310 | ) | — | — | ||||||||
Others | (149 | ) | — | — | ||||||||
Actual provision for corporate income tax | 14,744 | 19,073 | 18,807 | |||||||||
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
NOLCO | 2,341 | 916 | ||||||
Accumulated provision for doubtful accounts | 894 | 419 | ||||||
Accumulated write-down of inventories to net realizable values | 261 | 112 | ||||||
Unearned revenues | 188 | 61 | ||||||
Provisions for other assets | 163 | 6 | ||||||
Fixed asset impairment | 111 | 239 | ||||||
Unrealized foreign exchange losses | 33 | 60 | ||||||
Pension | 44 | — | ||||||
MCIT | 19 | 1 | ||||||
Financial instruments | 19 | — | ||||||
Operating lease | 3 | — | ||||||
4,076 | 1,814 | |||||||
Consolidated unrecognized deferred income tax assets (Note 3) | 1,236 | 545 | ||||||
Year Incurred | Expiry Date | MCIT | NOLCO | |||||||||
(in million pesos) | ||||||||||||
December 31, 2007 | December 31, 2010 | 2 | 652 | |||||||||
December 31, 2008 | December 31, 2011 | 11 | 639 | |||||||||
December 31, 2009 | December 31, 2012 | 27 | 1,196 | |||||||||
40 | 2,487 | |||||||||||
Consolidated tax benefits | 40 | 746 | ||||||||||
Consolidated unrecognized deferred income tax assets | (19 | ) | (702 | ) | ||||||||
Consolidated recognized deferred income tax assets | 21 | 44 | ||||||||||
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8. | Earnings Per Common Share |
2009 | 2008 | 2007 | ||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Consolidated net income for the year attributable to equity holders of PLDT (Note 4) | 39,781 | 39,781 | 34,317 | 34,317 | 39,289 | 39,289 | ||||||||||||||||||
Dividends on preferred shares (Note 19) | (457 | ) | (457 | ) | (455 | ) | (455 | ) | (457 | ) | (457 | ) | ||||||||||||
Accretion of preferred stock subject to mandatory redemption | — | — | — | — | — | 131 | ||||||||||||||||||
Dividends on dilutive preferred stock subject to mandatory redemption charged to interest expense for the year | — | — | — | — | — | 17 | ||||||||||||||||||
Foreign exchange gains on preferred stock subject to mandatory redemption (Notes 20 and 26) | — | — | — | — | — | (182 | ) | |||||||||||||||||
Consolidated net income for the year attributable to common equity holders of PLDT | 39,324 | 39,324 | 33,862 | 33,862 | 38,832 | 38,798 | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||||||
Outstanding common shares at beginning of year | 187,484 | 187,484 | 188,741 | 188,741 | 188,435 | 188,435 | ||||||||||||||||||
Effect of issuance of common shares during the year | 15 | 15 | 542 | 542 | 221 | 221 | ||||||||||||||||||
Effect of purchase of treasury stock during the year | (583 | ) | (583 | ) | (1,120 | ) | (1,120 | ) | — | — | ||||||||||||||
Average incremental number of shares under ESOP during the year | — | 21 | — | 13 | — | 38 | ||||||||||||||||||
Common shares equivalent of convertible preferred shares deemed dilutive: | ||||||||||||||||||||||||
Preferred Stock Series VI (Notes 20 and 26) | — | — | — | — | — | 680 | ||||||||||||||||||
Weighted average number of common shares for the year | 186,916 | 186,937 | 188,163 | 188,176 | 188,656 | 189,374 | ||||||||||||||||||
Earnings per share for the year attributable to common equity holders of PLDT | Php | 210.38 | Php | 210.36 | Php | 179.96 | Php | 179.95 | Php | 205.84 | Php | 204.88 | ||||||||||||
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9. | Property, Plant and Equipment |
Vehicles, | Information | |||||||||||||||||||||||||||||||||||||||
furniture | origination | |||||||||||||||||||||||||||||||||||||||
Cable and | Central | and other | and | Land and | Property | |||||||||||||||||||||||||||||||||||
wire | office | Cellular | network | Communications | termination | land | under | |||||||||||||||||||||||||||||||||
facilities | equipment | facilities | Buildings | equipment | satellite | equipment | improvements | construction | Total | |||||||||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||||||||||
As at December 31, 2007 | ||||||||||||||||||||||||||||||||||||||||
Cost | 117,081 | 86,841 | 70,045 | 20,695 | 32,572 | 8,454 | 8,191 | 2,561 | 18,532 | 364,972 | ||||||||||||||||||||||||||||||
Accumulated depreciation and amortization | (54,023 | ) | (64,286 | ) | (38,175 | ) | (7,323 | ) | (27,723 | ) | (7,349 | ) | (6,407 | ) | (272 | ) | — | (205,558 | ) | |||||||||||||||||||||
Net book value | 63,058 | 22,555 | 31,870 | 13,372 | 4,849 | 1,105 | 1,784 | 2,289 | 18,532 | 159,414 | ||||||||||||||||||||||||||||||
Year Ended December 31, 2008 | ||||||||||||||||||||||||||||||||||||||||
Net book value at beginning of year | 63,058 | 22,555 | 31,870 | 13,372 | 4,849 | 1,105 | 1,784 | 2,289 | 18,532 | 159,414 | ||||||||||||||||||||||||||||||
Additions | 1,423 | 262 | 4,344 | 649 | 2,238 | — | 195 | 25 | 16,522 | 25,658 | ||||||||||||||||||||||||||||||
Disposals/Retirements | (52 | ) | (58 | ) | (108 | ) | (104 | ) | (77 | ) | — | — | (59 | ) | (32 | ) | (490 | ) | ||||||||||||||||||||||
Translation differences charged directly to cumulative translation adjustments | — | 280 | — | (274 | ) | 118 | 338 | — | — | — | 462 | |||||||||||||||||||||||||||||
Acquisition through business combinations (Note 13) | 22 | — | 50 | 14 | 29 | — | — | — | — | 115 | ||||||||||||||||||||||||||||||
Impairment losses recognized during the year (Notes 3, 4 and 5) | — | (19 | ) | — | — | (85 | ) | — | — | — | — | (104 | ) | |||||||||||||||||||||||||||
Reclassifications/Transfers | 2,197 | 1,769 | 4,198 | 294 | 1,203 | — | 107 | — | (9,788 | ) | (20 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization (Notes 3 and 4) | (9,048 | ) | (3,871 | ) | (7,544 | ) | (1,084 | ) | (2,201 | ) | (537 | ) | (423 | ) | (1 | ) | — | (24,709 | ) | |||||||||||||||||||||
Net book value at end of year (Note 3) | 57,600 | 20,918 | 32,810 | 12,867 | 6,074 | 906 | 1,663 | 2,254 | 25,234 | 160,326 | ||||||||||||||||||||||||||||||
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 and amortization | (58,380 | ) | (62,644 | ) | (43,419 | ) | (8,173 | ) | (28,742 | ) | (8,675 | ) | (6,588 | ) | (273 | ) | — | (216,894 | ) | |||||||||||||||||||||
Net book value (Note 3) | 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 (Note 3) | 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 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 | ||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Interest (Note 5) | 691 | 778 | 542 | |||||||||
Foreign exchange losses (gains) — net | (119 | ) | 385 | 63 |
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 | |
Communications satellite | 15 years | |
Information origination and termination equipment | 3 – 15 years | |
Land and land improvements | 10 years |
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10. | Investments in Associates and Joint Ventures |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Carrying Value of Investments in Associates: | ||||||||
Manila Electric Company, or Meralco | 21,420 | — | ||||||
Philweb Corporation, or Philweb | 750 | 598 | ||||||
BOW | — | 605 | ||||||
ACeS International Limited | — | — | ||||||
22,170 | 1,203 | |||||||
Carrying Value of Investments in Joint Ventures: | ||||||||
ePDS, Inc., or ePDS | 43 | 45 | ||||||
PLDT Italy S.r.l., or PLDT Italy | 20 | (74 | ) | |||||
Mabuhay Space Holdings Limited, or MSHL | — | — | ||||||
63 | (29 | ) | ||||||
Total carrying value of investments in associates and joint ventures | 22,233 | 1,174 | ||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 4,346 | 4,226 | ||||||
Additions during the year | 21,555 | 1 | ||||||
Translation adjustments | (23 | ) | 119 | |||||
Business combinations (Note 13) | (821 | ) | — | |||||
Dissolution of MSHL | (887 | ) | — | |||||
Balance at end of year | 24,170 | 4,346 | ||||||
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 2,903 | 2,782 | ||||||
Translation adjustments | (13 | ) | (161 | ) | ||||
Business combinations (Note 13) | (97 | ) | — | |||||
Dissolution of MSHL | (887 | ) | — | |||||
Impairment for the year (Notes 3, 4 and 5) | — | 282 | ||||||
Balance at end of year | 1,906 | 2,903 | ||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | (269 | ) | (93 | ) | ||||
Business combinations (Note 13) | 590 | — | ||||||
Translation adjustments | 3 | — | ||||||
Equity share in net earnings (losses) of associates and joint ventures for the year (Note 4): | 2 | (176 | ) | |||||
Meralco | 398 | — | ||||||
Philweb | 152 | 5 | ||||||
ePDS | 21 | 12 | ||||||
BayanTrade | (5 | ) | — | |||||
PLDT Italy | (98 | ) | (74 | ) | ||||
BOW | (466 | ) | (119 | ) | ||||
Dividends | (357 | ) | — | |||||
Balance at end of year | (31 | ) | (269 | ) | ||||
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
Consolidated Statements of Financial Position: | ||||||||
Noncurrent assets | 136,581 | 1,072 | ||||||
Current assets | 46,755 | 1,017 | ||||||
Equity (Capital deficiency) | 52,143 | (9,119 | ) | |||||
Noncurrent liabilities | 86,605 | 10,468 | ||||||
Current liabilities | 44,588 | 740 |
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated Income Statements: | ||||||||||||
Revenues | 186,227 | 572 | 763 | |||||||||
Expenses | 180,536 | 359 | 341 | |||||||||
Net income attributable to controlling interests | 6,634 | 290 | 489 |
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(in million pesos) | ||||
Consolidated Statement of Financial Position: | ||||
Noncurrent assets | 135,071 | |||
Current assets | 45,342 | |||
Equity | 60,878 | |||
Noncurrent liabilities | 76,516 | |||
Current liabilities | 43,019 | |||
Consolidated Income Statement: | ||||
Revenues | 184,872 | |||
Expenses | 176,445 | |||
Net income attributable to controlling interests | 6,005 |
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
Consolidated Statements of Financial Position: | ||||||||
Noncurrent assets | 103 | 556 | ||||||
Current assets | 244 | 261 | ||||||
Equity (Capital deficiency) | 57 | (71 | ) | |||||
Noncurrent liabilities | 88 | 699 | ||||||
Current liabilities | 202 | 189 |
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Consolidated Income Statements: | ||||||||||||
Revenues | 387 | 175 | 100 | |||||||||
Expenses | 527 | 387 | 173 | |||||||||
Net loss attributable to controlling interests | 154 | 223 | 83 |
11. | Investment in Debt Securities |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
National Power Corporation, or NAPOCOR, Zero Coupon Bond | 312 | 292 | ||||||
Rizal Commercial Banking Corporation, or RCBC, Note | 150 | 150 | ||||||
Government Securities | — | 1,656 | ||||||
Republic of the Philippines Credit Linked Notes, or CLN | — | 193 | ||||||
462 | 2,291 | |||||||
Less current portion of investment in debt securities (Note 28) | — | 1,656 | ||||||
Noncurrent portion of investment in debt securities (Note 28) | 462 | 635 | ||||||
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12. | Investment Properties |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 617 | 577 | ||||||
Net gains from fair value adjustments (Note 3) | 352 | 59 | ||||||
Transfer from property, plant and equipment (Note 9) | 262 | — | ||||||
Disposals | (21 | ) | (19 | ) | ||||
Balance at end of year (Notes 3 and 28) | 1,210 | 617 | ||||||
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13. | Business Combinations and Acquisition of Non-Controlling Interests |
(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 | 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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(in million pesos) | ||||
Assets: | ||||
Property, plant and equipment | 21 | |||
Provisional goodwill (Note 14) | 184 | |||
Deferred income tax assets — net | 19 | |||
Advances and refundable deposits | 11 | |||
Cash and cash equivalents | 6 | |||
Trade and other receivables | 179 | |||
Prepayments and other current assets | 6 | |||
426 | ||||
Liabilities: | ||||
Long-term debt | 150 | |||
Pension and other employee benefits | 5 | |||
Other noncurrent liabilities | 59 | |||
Accounts payable | 85 | |||
Accrued expenses and other current liabilities | 75 | |||
374 | ||||
52 | ||||
Non-controlling interests | (9 | ) | ||
Net assets acquired | 61 | |||
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In U.S. Dollar | 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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In U.S. Dollar | Php(1) | |||||||
(in millions) | ||||||||
Assets: | ||||||||
Property, plant and equipment | — | 8 | ||||||
Provisional goodwill (Note 14) | 10 | 494 | ||||||
Deferred income tax assets — net | 1 | 10 | ||||||
Cash and cash equivalents | 1 | 26 | ||||||
Trade and other receivables | 1 | 59 | ||||||
13 | 597 | |||||||
Liability: | ||||||||
Accrued expenses and other current liabilities | 1 | 27 | ||||||
Net assets acquired | 12 | 570 | ||||||
(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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(in million pesos) | ||||
Assets: | ||||
Property, plant and equipment | 42 | |||
Provisional goodwill (Note 14) | 1,597 | |||
Prepayments | 10 | |||
Advances and refundable deposits — net of current portion | 8 | |||
Cash and cash equivalents | 12 | |||
Trade and other receivables | 42 | |||
Current portion of advances and refundable deposits | 6 | |||
1,717 | ||||
Liabilities: | ||||
Accounts payable | 30 | |||
Accrued expenses and other current liabilities | 116 | |||
Income tax payable | 2 | |||
148 | ||||
Net assets acquired | 1,569 | |||
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(in million pesos) | ||||
Assets: | ||||
Property, plant and equipment | 8 | |||
Provisional goodwill (Note 14) | 561 | |||
Intangible assets (Note 14) | 27 | |||
Advances and refundable deposits — net of current portion | 1 | |||
Cash and cash equivalents | 89 | |||
Trade and other receivables | 51 | |||
Current portion of advances and refundable deposits | 19 | |||
756 | ||||
Liabilities: | ||||
Accounts payable | 8 | |||
Accrued expenses and other current liabilities | 105 | |||
Accrued retirement benefits | 12 | |||
Income tax payable | 2 | |||
127 | ||||
Net assets acquired | 629 | |||
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Fair Value | ||||||||
Previous | Recognized on | |||||||
Carrying Value | Acquisition | |||||||
(in million pesos) | ||||||||
Assets: | ||||||||
Property, plant and equipment | 115 | 115 | ||||||
Investments in associates and joint ventures | 6 | 6 | ||||||
Goodwill (Note 14) | — | 248 | ||||||
Advances and refundable deposits — net of current portion | 4 | 4 | ||||||
Cash and cash equivalents | 52 | 52 | ||||||
Current portion of advances and refundable deposits | 78 | 78 | ||||||
255 | 503 | |||||||
Liabilities: | ||||||||
Accounts payable | 82 | 82 | ||||||
Accrued expenses and other current liabilities | 1 | 1 | ||||||
83 | 83 | |||||||
Net assets acquired | 172 | 420 | ||||||
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14. | Goodwill and Intangible Assets |
Total | ||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||
Intangible Assets | Total | and | ||||||||||||||||||||||||||||||
Customer | Technology | Intangible | Intangible | |||||||||||||||||||||||||||||
List | Spectrum | Licenses | Application | Trademark | Assets | Goodwill | Assets | |||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||
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 | (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 (Notes 4 and 5) | — | — | 213 | 73 | — | 286 | 93 | 379 | ||||||||||||||||||||||||
Amortization during the year | 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 | 2–18 | 4–5 | 6 | — | — | — | ||||||||||||||||||||||||
Remaining useful lives (in years) | 1–4 | 10 | 2–13 | 1 | 6 | — | — | — | ||||||||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||||||||||
Costs: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 1,486 | 1,205 | 318 | 812 | — | 3,821 | 10,879 | 14,700 | ||||||||||||||||||||||||
Translation adjustments | 210 | — | — | (1 | ) | — | 209 | 1,312 | 1,521 | |||||||||||||||||||||||
Business combinations (Notes 3, 13 and 21) | — | — | — | — | — | — | 261 | 261 | ||||||||||||||||||||||||
Additions during the year | — | — | — | 83 | — | 83 | — | 83 | ||||||||||||||||||||||||
Reclassifications | — | — | 52 | — | — | 52 | — | 52 | ||||||||||||||||||||||||
Adjustments during the year | — | — | — | — | — | — | (163 | ) | (163 | ) | ||||||||||||||||||||||
Balance at end of year | 1,696 | 1,205 | 370 | 894 | — | 4,165 | 12,289 | 16,454 | ||||||||||||||||||||||||
Accumulated amortization and impairment: | ||||||||||||||||||||||||||||||||
Balance at beginning of year | 384 | 268 | 182 | 516 | — | 1,350 | 1,629 | 2,979 | ||||||||||||||||||||||||
Impairment during the year (Notes 4 and 5) | 127 | — | — | 297 | — | 424 | 2,026 | 2,450 | ||||||||||||||||||||||||
Amortization during the year | 231 | 80 | 19 | 47 | — | 377 | — | 377 | ||||||||||||||||||||||||
Translation adjustments | 52 | — | (1 | ) | — | — | 51 | 144 | 195 | |||||||||||||||||||||||
Reclassifications | — | — | 3 | — | — | 3 | — | 3 | ||||||||||||||||||||||||
Balance at end of year | 794 | 348 | 203 | 860 | — | 2,205 | 3,799 | 6,004 | ||||||||||||||||||||||||
Net balance at end of year (Notes 3 and 28) | 902 | 857 | 167 | 34 | — | 1,960 | 8,490 | 10,450 | ||||||||||||||||||||||||
Estimated useful lives (in years) | 3–7 | 15 | 6–18 | 4–5 | — | — | — | — | ||||||||||||||||||||||||
Remaining useful lives (in years) | 3–4 | 11 | 3–14 | 1–2 | — | — | — | — |
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Year | (in million pesos) | |||
2010 | 343 | |||
2011 | 302 | |||
2012 | 248 | |||
2013 | 193 | |||
2014 and onwards | 546 | |||
Balance at end of year | 1,632 | |||
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15. | Cash and Cash Equivalents |
This account consists of: |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Cash on hand and in banks (Note 28) | 3,300 | 4,164 | ||||||
Temporary cash investments (Note 28) | 35,019 | 29,520 | ||||||
38,319 | 33,684 | |||||||
16. | Trade and Other Receivables |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Corporate subscribers (Notes 24 and 28) | 9,106 | 9,188 | ||||||
Retail subscribers (Note 28) | 8,026 | 8,993 | ||||||
Foreign administrations (Note 28) | 4,353 | 5,916 | ||||||
Domestic carriers (Notes 24 and 28) | 1,267 | 877 | ||||||
Dealers, agents and others (Notes 24 and 28) | 3,927 | 3,271 | ||||||
26,679 | 28,245 | |||||||
Less allowance for doubtful accounts | 11,950 | 12,336 | ||||||
14,729 | 15,909 | |||||||
Dealers, | ||||||||||||||||||||||||
Corporate | Retail | Foreign | Domestic | Agents and | ||||||||||||||||||||
Total | Subscribers | Subscribers | Administrations | Carriers | Others | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
December 31, 2009 | ||||||||||||||||||||||||
Balance at beginning of year | 12,336 | 6,323 | 5,089 | 439 | 174 | 311 | ||||||||||||||||||
Provisions for the year (Notes 3 and 5) | 2,335 | 670 | 1,512 | 18 | 35 | 100 | ||||||||||||||||||
Business combinations (Note 13) | 513 | 36 | 454 | — | — | 23 | ||||||||||||||||||
Reversals | (46 | ) | (18 | ) | (9 | ) | (13 | ) | (6 | ) | — | |||||||||||||
Write-offs | (3,212 | ) | (1,178 | ) | (1,657 | ) | (216 | ) | (157 | ) | (4 | ) | ||||||||||||
Translation and other adjustments | 24 | 844 | (909 | ) | 61 | 37 | (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 | |||||||||||||||||||
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Dealers, | ||||||||||||||||||||||||
Corporate | Retail | Foreign | Domestic | Agents and | ||||||||||||||||||||
Total | Subscribers | Subscribers | Administrations | Carriers | Others | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Gross amount of receivables individually impaired, before deducting any impairment allowance | 9,624 | 6,256 | 2,595 | 289 | 83 | 401 | ||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Balance at beginning of year | 12,855 | 5,875 | 4,318 | 1,047 | 381 | 1,234 | ||||||||||||||||||
Provisions for the year (Notes 3, 4 and 5) | 1,079 | 98 | 850 | 85 | 26 | 20 | ||||||||||||||||||
Reversals | (16 | ) | — | — | (2 | ) | (13 | ) | (1 | ) | ||||||||||||||
Write-offs | (1,693 | ) | (314 | ) | (189 | ) | (645 | ) | (142 | ) | (403 | ) | ||||||||||||
Translation and other adjustments | 111 | 664 | 110 | (46 | ) | (78 | ) | (539 | ) | |||||||||||||||
Balance at end of year | 12,336 | 6,323 | 5,089 | 439 | 174 | 311 | ||||||||||||||||||
Individual impairment | 11,636 | 6,056 | 4,656 | 439 | 174 | 311 | ||||||||||||||||||
Collective impairment | 700 | 267 | 433 | — | — | — | ||||||||||||||||||
12,336 | 6,323 | 5,089 | 439 | 174 | 311 | |||||||||||||||||||
Gross amount of receivables individually impaired, before deducting any impairment allowance | 11,708 | 6,128 | 4,656 | 439 | 174 | 311 | ||||||||||||||||||
17. | Inventories and Supplies |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Spare parts and supplies: | ||||||||
At net realizable value | 982 | 966 | ||||||
At cost | 1,998 | 1,933 | ||||||
Terminal and cellular phone units: | ||||||||
At net realizable value | 652 | 936 | ||||||
At cost | 981 | 1,098 | ||||||
Others: | ||||||||
At net realizable value | 531 | 167 | ||||||
At cost | 534 | 167 | ||||||
Total inventories at the lower of cost or net realizable value (Note 28) | 2,165 | 2,069 | ||||||
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Cost of sales | 4,714 | 4,380 | 4,778 | |||||||||
Repairs and maintenance | 429 | 549 | 409 | |||||||||
Write-down of inventories and supplies (Notes 3 and 5) | 389 | 242 | 243 | |||||||||
5,532 | 5,171 | 5,430 | ||||||||||
18. | Prepayments |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Prepaid taxes | 7,768 | 6,178 | ||||||
Prepaid benefit costs (Notes 3 and 25) | 5,414 | — | ||||||
Prepaid rent – net (Notes 3, 5 and 26) | 208 | 31 | ||||||
Prepaid insurance (Note 24) | 109 | 161 | ||||||
Prepaid fees and licenses | 44 | 100 | ||||||
Other prepayments | 218 | 195 | ||||||
13,761 | 6,665 | |||||||
Less current portion of prepayments (Note 28) | 5,098 | 4,164 | ||||||
Noncurrent portion of prepayments (Note 28) | 8,663 | 2,501 | ||||||
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19. | Equity |
Preferred Stock – | ||||||||||||||||||||||||
Php10 par value per share | ||||||||||||||||||||||||
Series | Total | Common Stock – | ||||||||||||||||||||||
A to EE | IV | Preferred | Php5 par value per share | |||||||||||||||||||||
No. of Shares | Stock | Amount | No. of Shares | Amount | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Authorized | 823 | Php | 8,230 | 234 | Php | 1,170 | ||||||||||||||||||
Issued | ||||||||||||||||||||||||
Balance as at January 1, 2007 | 406 | 36 | 442 | Php | 4,424 | 188 | Php | 942 | ||||||||||||||||
Issuance | — | — | — | 1 | — | — | ||||||||||||||||||
Conversion | (1 | ) | — | (1 | ) | (8 | ) | — | 8 | |||||||||||||||
Balance as at December 31, 2007 | 405 | 36 | 441 | Php | 4,417 | 188 | Php | 943 | ||||||||||||||||
Balance as at January 1, 2008 | 405 | 36 | 441 | Php | 4,417 | 188 | Php | 943 | ||||||||||||||||
Issuance | — | — | — | 1 | — | 1 | ||||||||||||||||||
Conversion | — | — | — | (3 | ) | 1 | 3 | |||||||||||||||||
Balance as at December 31, 2008 | 405 | 36 | 441 | Php | 4,415 | 189 | Php | 947 | ||||||||||||||||
Balance as at January 1, 2009 | 405 | 36 | 441 | Php | 4,415 | 189 | Php | 947 | ||||||||||||||||
Issuance | — | — | — | 2 | — | — | ||||||||||||||||||
Conversion | — | — | — | (1 | ) | — | — | |||||||||||||||||
Balance as at December 31, 2009 | 405 | 36 | 441 | Php | 4,416 | 189 | Php | 947 | ||||||||||||||||
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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 | Php | 4.675 | — | ||||||||||||||
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 | Php | 0.001103 per day | — | |||||||||||||||
Charged to income | — | |||||||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 27, 2009 | February 26, 2009 | March 31, 2009 | Php | 1.00 | 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 | ||||||||||||||||||||
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Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
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 | Php | 70.00 | 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 onAugust23, 2009 were entitled to this final dividend. | |
** | Onlytheholders of Series VI Convertible Preferred Stock whose shares were originally issued on November 8, 2002 and mandatorily converted on November 9, 2009 were entitled to this final dividend. | |
*** | Dividends were declared based on total amount paid up. |
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 | Php | 4.675 | — | ||||||||||||||
*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 | Php | 1.00 | 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 | Php | 68.00 | 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 were entitled to these final dividends. | |
** | Dividends were declared based on total amount paid up. |
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Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
Preferred Stock Subject to Mandatory Redemption | ||||||||||||||||||||
Series V | March 6, 2007 | March 20, 2007 | April 15, 2007 | Php | 4.675 | — | ||||||||||||||
June 12, 2007 | June 28, 2007 | July 15, 2007 | 4.675 | — | ||||||||||||||||
September 14, 2007 | September 28, 2007 | October 15, 2007 | 4.675 | — | ||||||||||||||||
December 1, 2007 | December 21, 2007 | January 15, 2008 | 4.675 | — | ||||||||||||||||
Series VI | March 6, 2007 | March 20, 2007 | April 15, 2007 | US$ | 0.09925 | 4 | ||||||||||||||
June 12, 2007 | June 28, 2007 | July 15, 2007 | 0.09925 | 3 | ||||||||||||||||
September 14, 2007 | September 28, 2007 | October 15, 2007 | 0.09925 | 3 | ||||||||||||||||
December 1, 2007 | December 21, 2007 | January 15, 2008 | 0.09925 | 3 | ||||||||||||||||
Charged to income | 13 | |||||||||||||||||||
10% Cumulative Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 30, 2007 | February 28, 2007 | March 30, 2007 | Php | 1.00 | 17 | ||||||||||||||
Series DD | January 31, 2007 | February 15, 2007 | February 28, 2007 | 1.00 | 2 | |||||||||||||||
Series EE | March 27, 2007 | April 26, 2007 | May 31, 2007 | 1.00 | — | |||||||||||||||
Series A, I, R, W, AA and BB | July 10, 2007 | August 1, 2007 | August 31, 2007 | 1.00 | 129 | |||||||||||||||
Series B, F, Q, V and Z | August 7, 2007 | September 3, 2007 | September 28, 2007 | 1.00 | 91 | |||||||||||||||
Series E, K, O and U | September 14, 2007 | October 4, 2007 | October 31, 2007 | 1.00 | 44 | |||||||||||||||
Series C, D, J, T and X | September 14, 2007 | October 14, 2007 | November 27, 2007 | 1.00 | 57 | |||||||||||||||
Series G, N, P and S | November 6, 2007 | December 6, 2007 | December 28, 2007 | 1.00 | 27 | |||||||||||||||
Series H, L, M and Y | December 1, 2007 | December 28, 2007 | January 31, 2008 | 1.00 | 41 | |||||||||||||||
408 | ||||||||||||||||||||
Cumulative Non-Convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV* | January 30, 2007 | February 23, 2007 | March 15, 2007 | Php | — | 12 | ||||||||||||||
May 8, 2007 | May 25, 2007 | June 15, 2007 | — | 13 | ||||||||||||||||
July 10, 2007 | August 9, 2007 | September 15, 2007 | — | 12 | ||||||||||||||||
November 6, 2007 | November 23, 2007 | December 15, 2007 | — | 12 | ||||||||||||||||
49 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 6, 2007 | March 20, 2007 | April 20, 2007 | Php | 50.00 | 9,429 | ||||||||||||||
August 7, 2007 | August 24, 2007 | September 24, 2007 | 60.00 | 11,322 | ||||||||||||||||
Special Dividend | August 7, 2007 | August 24, 2007 | September 24, 2007 | 40.00 | 7,548 | |||||||||||||||
28,299 | ||||||||||||||||||||
Charged to retained earnings | 28,756 | |||||||||||||||||||
* | Dividends are declared based on total amount paid up. |
Date | Amount | |||||||||||||||||||
Class | Approved | Record | Payable | Per Share | Total | |||||||||||||||
(in million pesos) | ||||||||||||||||||||
10% Convertible Preferred Stock | ||||||||||||||||||||
Series CC | January 26, 2010 | February 25, 2010 | March 31, 2010 | 1.00 | 17 | |||||||||||||||
Series DD | January 26, 2010 | February 11, 2010 | February 26, 2010 | Php | 1.00 | 3 | ||||||||||||||
Series EE | March 26, 2010 | April 30, 2010 | May 31, 2010 | 1.00 | — | |||||||||||||||
20 | ||||||||||||||||||||
Cumulative Non-Convertible Redeemable Preferred Stock | ||||||||||||||||||||
Series IV* | January 26, 2010 | February 19, 2010 | March 15, 2010 | Php | — | 12 | ||||||||||||||
May 4, 2010 | May 21, 2010 | June 15, 2010 | — | 12 | ||||||||||||||||
24 | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
Regular Dividend | March 2, 2010 | March 17, 2010 | April 20, 2010 | Php | 76.00 | 14,196 | ||||||||||||||
Special Dividend | March 2, 2010 | March 17, 2010 | April 20, 2010 | 65.00 | 12,142 | |||||||||||||||
26,338 | ||||||||||||||||||||
Charged to retained earnings | 26,382 | |||||||||||||||||||
* | Dividends are declared based on total amount paid up. |
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20. | Interest-bearing Financial Liabilities |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Long-term portion of interest-bearing financial liabilities: | ||||||||
Long-term debt (Notes 4, 5, 9, 23, 26 and 28) | 86,066 | 58,899 | ||||||
Obligations under finance lease (Notes 4, 5, 23, 26 and 28) | 13 | 11 | ||||||
86,079 | 58,910 | |||||||
Current portion of interest-bearing financial liabilities: | ||||||||
Notes payable (Notes 4, 5, 23, 26 and 28) | 2,279 | 553 | ||||||
Long-term debt maturing within one year (Notes 4, 5, 9, 23, 26 and 28) | 10,384 | 14,459 | ||||||
Obligations under finance lease maturing within one year (Notes 4, 5, 26 and 28) | 51 | 59 | ||||||
Preferred stock subject to mandatory redemption (Notes 4, 5, 26 and 28) | — | 9 | ||||||
12,714 | 15,080 | |||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Long-term debt (Note 28) | 3,858 | 4,576 | ||||||
Obligation under finance lease | 3 | 1 | ||||||
Unamortized debt discount at end of year | 3,861 | 4,577 | ||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Unamortized debt discount at beginning of year | 4,577 | 4,538 | ||||||
Additions during the year | 182 | 154 | ||||||
Revaluations during the year | 22 | 706 | ||||||
Accretion during the year included as part of “Financing costs – Accretion on financial liabilities” (Note 5) | (920 | ) | (806 | ) | ||||
Settlements and conversions during the year | — | (15 | ) | |||||
Unamortized debt discount at end of year | 3,861 | 4,577 | ||||||
Description | Interest Rates | 2009 | 2008 | |||||||||||||||
(in millions) | ||||||||||||||||||
U.S. Dollar Debts: | ||||||||||||||||||
Export Credit Agencies-Supported Loans: | ||||||||||||||||||
Kreditanstalt für Wiederaufbau, or KfW | 5.65% and US$ LIBOR + 0.65% - 2.5% in 2009 and 5.65% - 7.58% and US$ LIBOR + 0.55% - 2.5% in 2008 | US$ | 31 | Php | 1,454 | US$ | 74 | Php | 3,540 | |||||||||
Finnvera, Plc, or Finnvera | US$ LIBOR + 0.05% - 1.35% in 2009 and US$ LIBOR + 0.05% in 2008 | 58 | 2,681 | 30 | 1,420 | |||||||||||||
Exportkreditnamnden, or EKN | 3.79% in 2009 and 3.79% - 6.6% and US$ LIBOR + 0.15% - 0.65% in 2008 | 18 | 860 | 7 | 351 | |||||||||||||
107 | 4,995 | 111 | 5,311 |
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Description | Interest Rates | 2009 | 2008 | |||||||||||||||
(in millions) | ||||||||||||||||||
Fixed Rate Notes | 8.35% - 11.375% in 2009 and 2008 | 385 | 17,876 | 560 | 26,693 | |||||||||||||
Term Loans: | ||||||||||||||||||
Debt Exchange Facility | 2.25% in 2009 and 2.25% and US$ LIBOR + 1% in 2008 | 209 | 9,725 | 196 | 9,357 | |||||||||||||
GSM Network Expansion Facilities | 4.49% - 4.70% and US$ LIBOR + 0.42% - 1.85% in 2009 and 4.49% - 4.70% and US$ LIBOR + 0.42% - 0.815% in 2008 | 157 | 7,274 | 183 | 8,698 | |||||||||||||
Others | 6% and swap rate + 2.79% and US$ LIBOR + 0.42% - 0.50% in 2009 and 6% - 8.9% and US$ LIBOR + 0.40% - 0.50% in 2008 | 118 | 5,484 | 141 | 6,694 | |||||||||||||
Satellite Acquisition Loans | US$ LIBOR + 1.75% to 2.75% in 2009 and 2008 | — | — | 13 | 610 | |||||||||||||
US$ | 976 | 45,354 | US$ | 1,204 | 57,363 | |||||||||||||
Philippine Peso Debts: | ||||||||||||||||||
Corporate Notes | 5.625% - 9.1038% and PDST-F + 1.25% in 2009 and 5.625% - 8.4346% in 2008 | 24,863 | 9,921 | |||||||||||||||
Term Loans: | ||||||||||||||||||
Unsecured Term Loans | 6.125% - 8.7792%; MART1 + 0.75% and PDST-F + 1% - 1.50% in 2009 and 6.125%; MART 1 + 0.75% and PDST-F + 1% - 1.50% in 2008 | 26,088 | 6,070 | |||||||||||||||
Secured Term Loans | PDST-F + 5.70% + Bank's cost of funds; PDST-F + 1.375% and AUB's prime rate in 2009 and 7.09% and MART1 + 5.70% in 2008 | 145 | 4 | |||||||||||||||
51,096 | 15,995 | |||||||||||||||||
Total long-term debt | 96,450 | 73,358 | ||||||||||||||||
Less portion maturing within one year (Note 28) | 10,384 | 14,459 | ||||||||||||||||
Noncurrent portion of long-term (Note 28) | Php | 86,066 | Php | 58,899 | ||||||||||||||
U.S. Dollar Debt | Php Debt | Total | ||||||||||||||
Year | In U.S. Dollar | In Php | In Php | In Php | ||||||||||||
(in millions) | ||||||||||||||||
2010 | 149 | 6,939 | 3,594 | 10,533 | ||||||||||||
2011 | 94 | 4,342 | 7,899 | 12,241 | ||||||||||||
2012 | 224 | 10,421 | 9,627 | 20,048 | ||||||||||||
2013 | 49 | 2,297 | 9,028 | 11,325 | ||||||||||||
2014 and onwards | 541 | 25,102 | 21,059 | 46,161 | ||||||||||||
1,057 | 49,101 | 51,207 | 100,308 | |||||||||||||
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• | US$23 million provided in connection with the US$149 million refinancing facility discussed below; and | ||
• | US$8 million provided for the 15% downpayment portion and credit facilities without guarantee/insurance cover from the export credit agencies, of which US$5 million was in connection with the US$149 million refinancing facility discussed in the following paragraphs. |
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Principal Amount | Interest Rate | Maturity Date | 2009 | 2008 | ||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
US$245,399,000 | 8.350 | % | March 6, 2017 | US$ | 242 | Php | 11,256 | US$ | 291 | Php | 13,896 | |||||||||||||
US$145,789,000 | 11.375 | % | May 15, 2012 | 143 | 6,620 | 155 | 7,380 | |||||||||||||||||
US$113,786,000 | 10.500 | % | April 15, 2009 | — | — | 114 | 5,417 | |||||||||||||||||
US$ | 385 | Php | 17,876 | US$ | 560 | Php | 26,693 | |||||||||||||||||
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Year | (in million pesos) | |||
2010 | 53 | |||
2011 | 6 | |||
2012 | 5 | |||
2013 and onwards | 3 | |||
Total minimum finance lease payments (Note 26) | 67 | |||
Less amount representing interest | 3 | |||
Present value of net minimum finance lease payments (Notes 3 and 28) | 64 | |||
Less obligations under finance lease maturing within one year (Notes 9 and 28) | 51 | |||
Long-term portion of obligations under finance lease (Notes 9 and 28) | 13 | |||
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2009 | 2008 | |||||||||||||||||||||||
Series V | Series VI | Total | Series V | Series VI | Total | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Balance at beginning of year | 2 | 7 | 9 | 49 | 966 | 1,015 | ||||||||||||||||||
Conversion (Note 29) | (2 | ) | (7 | ) | (9 | ) | (50 | ) | (1,027 | ) | (1,077 | ) | ||||||||||||
Accretion | — | — | — | 3 | 36 | 39 | ||||||||||||||||||
Revaluation | — | — | — | — | 32 | 32 | ||||||||||||||||||
Balance at end of year (Notes 26 and 28) | — | — | — | 2 | 7 | 9 | ||||||||||||||||||
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21. | Deferred Credits and Other Noncurrent Liabilities |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Accrual of capital expenditures under long-term financing | 11,966 | 8,650 | ||||||
Provision for asset retirement obligations (Notes 3 and 9) | 1,204 | 1,100 | ||||||
Contingent consideration for business acquisitions – net of current portion (Notes 13, 14 and 23) | 1,193 | 593 | ||||||
Unearned revenues (Note 23) | 66 | 190 | ||||||
Others | 9 | 49 | ||||||
14,438 | 10,582 | |||||||
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Provision for asset retirement obligations at beginning of year | 1,100 | 952 | ||||||
Accretion expenses for the year | 94 | 85 | ||||||
Additional liability recognized during the year (Note 29) | 17 | 70 | ||||||
Settlement of obligations | (7 | ) | (7 | ) | ||||
Provision for asset retirement obligations at end of year (Note 3) | 1,204 | 1,100 | ||||||
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2009 | 2008 | |||||||||||||||
U.S. Dollar | Php | U.S. Dollar | Php | |||||||||||||
(in millions) | ||||||||||||||||
Balance at beginning of year | 15 | 720 | 25 | 1,048 | ||||||||||||
Business combinations (Note 13) | 8 | 389 | (4 | ) | (162 | ) | ||||||||||
Accretion for the year | 3 | 142 | 3 | 137 | ||||||||||||
Payments | — | (13 | ) | (9 | ) | (379 | ) | |||||||||
Translation | — | (31 | ) | — | 76 | |||||||||||
Balance at end of year | 26 | 1,207 | 15 | 720 | ||||||||||||
Less current portion of contingent consideration for business acquisitions (Note 23) | — | 14 | 3 | 127 | ||||||||||||
Noncurrent portion of contingent consideration for business acquisitions | 26 | 1,193 | 12 | 593 | ||||||||||||
22. | Accounts Payable |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Suppliers and contractors (Notes 26 and 28) | 14,975 | 14,131 | ||||||
Carriers (Notes 26 and 28) | 1,937 | 1,780 | ||||||
Taxes (Notes 27 and 28) | 1,894 | 1,970 | ||||||
Related parties (Notes 24, 26 and 28) | 233 | 120 | ||||||
Others | 562 | 267 | ||||||
19,601 | 18,268 | |||||||
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23. | Accrued Expenses and Other Current Liabilities |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Accrued utilities and related expenses (Notes 24, 26 and 28) | 17,549 | 13,504 | ||||||
Accrued employee benefits (Notes 3, 25, 26 and 28) | 8,074 | 2,928 | ||||||
Unearned revenues (Note 21) | 4,588 | 4,249 | ||||||
Accrued taxes and related expenses (Notes 26 and 27) | 1,941 | 1,398 | ||||||
Accrued interests and other related costs (Notes 20, 26 and 28) | 1,167 | 1,212 | ||||||
Installment payable for purchase of equity investment (Note 13) | 65 | — | ||||||
Current portion of contingent consideration for business acquisitions (Notes 13, 14 and 21) | 14 | 127 | ||||||
Others (Note 10) | 2,048 | 963 | ||||||
35,446 | 24,381 | |||||||
24. | Related Party Transactions |
a. | Air Time Purchase Agreement between PLDT and AIL and Related Agreements |
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b. | Agreements between PLDT and certain subsidiaries with Meralco |
c. | Transactions with Major Stockholders, Directors and Officers |
1. | Cooperation Agreement with First Pacific and certain affiliates, or the FP Parties, NTT Communications and NTT DoCoMo |
• | 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. |
• | 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. |
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• | 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 W-CDMA 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 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. |
• | 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 |
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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 |
3. | Advisory Service Agreement between NTT DoCoMo and PLDT |
4. | Other 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; |
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• | 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. |
5. | Agreements between Smart and Asia Link B.V., or ALBV |
6. | Agreements Relating to Insurance Companies |
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Short-term employee benefits | 593 | 498 | 549 | |||||||||
Share-based payments (Note 25) | 418 | 233 | 299 | |||||||||
Post-employment benefits (Note 25) | 33 | 24 | 58 | |||||||||
Total compensation paid to key officers of the PLDT Group | 1,044 | 755 | 906 | |||||||||
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25. | Share-based Payments and Employee Benefits |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Balance at beginning of year | 18,341 | 26,758 | ||||||
Exercised shares | (18,340 | ) | (8,417 | ) | ||||
Forfeiture | (1 | ) | — | |||||
Balance at end of year | — | 18,341 | ||||||
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2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Change in present value of defined benefit obligations: | ||||||||||||
Present value of defined benefit obligations at beginning of year | 10,917 | 10,160 | 13,314 | |||||||||
Interest costs | 1,193 | 834 | 996 | |||||||||
Current service costs | 643 | 600 | 777 | |||||||||
Actuarial losses (gains) on obligations | 4,720 | (101 | ) | (4,788 | ) | |||||||
Liabilities of newly acquired subsidiaries | 19 | — | — | |||||||||
Actual benefits paid | (93 | ) | (576 | ) | (566 | ) | ||||||
Curtailment | — | — | 427 | |||||||||
Present value of defined benefit obligations at end of year | 17,399 | 10,917 | 10,160 | |||||||||
Change in plan assets: | ||||||||||||
Fair value of plan assets at beginning of year | 7,168 | 8,519 | 5,768 | |||||||||
Actual contributions | 8,866 | 914 | 1,515 | |||||||||
Expected return on plan assets | 673 | 865 | 644 | |||||||||
Actual benefits paid | (93 | ) | (576 | ) | (566 | ) | ||||||
Actuarial gains (losses) on plan assets | 3,366 | (2,554 | ) | 1,158 | ||||||||
Fair value of plan assets at end of year | 19,980 | 7,168 | 8,519 | |||||||||
Unfunded (surplus) status – net | (2,581 | ) | 3,749 | 1,641 | ||||||||
Unrecognized net actuarial gains (losses) (Note 3) | (2,474 | ) | (1,126 | ) | 1,344 | |||||||
(5,055 | ) | 2,623 | 2,985 | |||||||||
Accrued benefit costs (Note 3) | 359 | 2,623 | 2,985 | |||||||||
Prepaid benefit costs (Notes 3 and 18) | 5,414 | — | — | |||||||||
Components of net periodic benefit costs: | ||||||||||||
Interest costs | 1,193 | 834 | 996 | |||||||||
Current service costs | 643 | 600 | 777 | |||||||||
Net actuarial losses (gains) recognized for the year | (3 | ) | (11 | ) | 78 | |||||||
Expected return on plan assets | (673 | ) | (865 | ) | (644 | ) | ||||||
Curtailment loss | — | — | 427 | |||||||||
Amortizations of unrecognized net transition obligation | — | — | 1 | |||||||||
Net periodic benefit costs (Notes 3 and 5) | 1,160 | 558 | 1,635 | |||||||||
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2009 | 2008 | 2007 | ||||||||||
Average remaining working years of covered employee | 18 | 20 | 21 | |||||||||
Expected rate of return on plan assets | 12 | % | 9 | % | 10 | % | ||||||
Discount rate | 9 | % | 11 | % | 8 | % | ||||||
Rate of increase in compensation | 9 | % | 10 | % | 7 | % |
2009 | 2008 | 2007 | ||||||||||
Investments in listed and unlisted equity securities | 78 | % | 51 | % | 60 | % | ||||||
Investments in debt and fixed income securities | 9 | % | 27 | % | 21 | % | ||||||
Investments in temporary placements | 7 | % | 8 | % | 5 | % | ||||||
Investments in real estate | 5 | % | 9 | % | 8 | % | ||||||
Investments in mutual funds | 1 | % | 5 | % | 6 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
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2009 | 2008 | 2007 | ||||||||||
Investments in debt and fixed income securities | 61 | % | 68 | % | 57 | % | ||||||
Investments in listed and unlisted equity securities | 34 | % | 23 | % | 35 | % | ||||||
Others | 5 | % | 9 | % | 8 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Expense recognized for defined benefit plans | 1,160 | 558 | 1,635 | |||||||||
Expense recognized for defined contribution plans | 146 | 167 | 138 | |||||||||
Total expense recognized for consolidated pension benefit costs (Notes 3 and 5) | 1,306 | 725 | 1,773 | |||||||||
26. | Contractual Obligations and Commercial Commitments |
Payments Due by Period | ||||||||||||||||||||
More | ||||||||||||||||||||
Less than | than 5 | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | years | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
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 | — | — | — |
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Payments Due by Period | ||||||||||||||||||||
Less than | More than 5 | |||||||||||||||||||
Total | 1 year | 1-3 years | 3-5 years | years | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
Others | 4,085 | 2,892 | 1,193 | — | — | |||||||||||||||
Total contractual obligations | 202,929 | 53,478 | 74,161 | 40,172 | 35,118 | |||||||||||||||
December 31, 2008 | ||||||||||||||||||||
Debt(1): | 99,915 | 8,201 | 31,500 | 26,744 | 33,470 | |||||||||||||||
Principal | 78,486 | 7,629 | 19,916 | 21,978 | 28,963 | |||||||||||||||
Interest | 21,429 | 572 | 11,584 | 4,766 | 4,507 | |||||||||||||||
Lease obligations: | 7,235 | 2,727 | 1,608 | 1,265 | 1,635 | |||||||||||||||
Operating lease | 7,164 | 2,667 | 1,601 | 1,261 | 1,635 | |||||||||||||||
Finance lease | 71 | 60 | 7 | 4 | — | |||||||||||||||
Unconditional purchase obligations(2) | 762 | 24 | 167 | 286 | 285 | |||||||||||||||
Other obligations: | 50,815 | 33,162 | 11,630 | 1,816 | 4,207 | |||||||||||||||
Mandatory conversion and purchase of shares | 9 | 9 | — | — | — | |||||||||||||||
Derivative financial liabilities(3): | 6,207 | 108 | 2,003 | 1,768 | 2,328 | |||||||||||||||
Long-term currency swaps | 6,099 | — | 2,003 | 1,768 | 2,328 | |||||||||||||||
Forward foreign exchange contracts | 69 | 69 | — | — | — | |||||||||||||||
Long-term foreign currency options | 39 | 39 | — | — | — | |||||||||||||||
Various trade and other obligations: | 44,599 | 33,045 | 9,627 | 48 | 1,879 | |||||||||||||||
Suppliers and contractors | 22,781 | 14,131 | 8,650 | — | — | |||||||||||||||
Utilities and related expenses | 11,376 | 11,346 | 27 | 1 | 2 | |||||||||||||||
Employee benefits | 2,925 | 2,925 | — | — | — | |||||||||||||||
Customers’ deposits | 2,251 | — | 327 | 47 | 1,877 | |||||||||||||||
Carriers | 1,780 | 1,780 | — | — | — | |||||||||||||||
Dividends | 1,379 | 1,379 | — | — | — | |||||||||||||||
Others | 2,107 | 1,484 | 623 | — | — | |||||||||||||||
Total contractual obligations | 158,727 | 44,114 | 44,905 | 30,111 | 39,597 | |||||||||||||||
(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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27. | Provisions and Contingencies |
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28. | Financial Assets and Liabilities |
Designated | ||||||||||||||||||||||||||||||||||||
at fair | ||||||||||||||||||||||||||||||||||||
value | Available- | Liabilities | Total | Non- | ||||||||||||||||||||||||||||||||
Loans | Held-to- | through | for-sale | carried at | financial | financial | ||||||||||||||||||||||||||||||
and | maturity | profit or | Held-for- | financial | amortized | assets and | assets and | |||||||||||||||||||||||||||||
receivables | investments | loss | trading | assets | cost | liabilities | liabilities | Total | ||||||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||||||
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 — net | 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 | — | — | — | — | — | 28,687 | 28,687 | 6,759 | 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 | — | 162,252 | 165,003 | 16,020 | 181,023 | |||||||||||||||||||||||||||
Net assets (liabilities) | 57,235 | 462 | — | (2,259 | ) | 134 | (162,252 | ) | (106,680 | ) | 205,805 | 99,125 | ||||||||||||||||||||||||
Assets as at December 31, 2008 | ||||||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||||||
Property, plant and equipment | — | — | — | — | — | — | — | 160,326 | 160,326 | |||||||||||||||||||||||||||
Investments in associates and joint ventures | — | — | — | — | — | — | — | 1,174 | 1,174 | |||||||||||||||||||||||||||
Available-for-sale financial assets | — | — | — | — | 131 | — | 131 | — | 131 | |||||||||||||||||||||||||||
Investment in debt securities — net of current portion | — | 442 | 193 | — | — | — | 635 | — | 635 | |||||||||||||||||||||||||||
Investment properties | — | — | — | — | — | — | — | 617 | 617 | |||||||||||||||||||||||||||
Goodwill and intangible assets | — | — | — | — | — | — | — | 10,450 | 10,450 | |||||||||||||||||||||||||||
Deferred income tax assets — net | — | — | — | — | — | — | — | 9,605 | 9,605 | |||||||||||||||||||||||||||
Prepayments — net of current portion | — | — | — | — | — | — | — | 2,501 | 2,501 |
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Designated | ||||||||||||||||||||||||||||||||||||
at fair | ||||||||||||||||||||||||||||||||||||
value | Available- | Liabilities | Total | Non- | ||||||||||||||||||||||||||||||||
Loans | Held-to- | through | for-sale | carried at | financial | financial | ||||||||||||||||||||||||||||||
and | maturity | profit or | Held-for- | financial | amortized | assets and | assets and | |||||||||||||||||||||||||||||
receivables | investments | loss | trading | assets | cost | liabilities | liabilities | Total | ||||||||||||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||||||||||||||
Advances and refundable deposits — net of current portion | 840 | — | — | — | — | — | 840 | 246 | 1,086 | |||||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 33,684 | — | — | — | — | — | 33,684 | — | 33,684 | |||||||||||||||||||||||||||
Short-term investments | 5,964 | — | — | 706 | — | — | 6,670 | — | 6,670 | |||||||||||||||||||||||||||
Current portion of investment in debt securities | — | 1,656 | — | — | — | — | 1,656 | — | 1,656 | |||||||||||||||||||||||||||
Trade and other receivables — net | 15,909 | — | — | — | — | — | 15,909 | — | 15,909 | |||||||||||||||||||||||||||
Inventories and supplies | — | — | — | — | — | — | — | 2,069 | 2,069 | |||||||||||||||||||||||||||
Derivative financial assets | — | — | — | 56 | — | — | 56 | — | 56 | |||||||||||||||||||||||||||
Current portion of prepayments | — | — | — | — | — | — | — | 4,164 | 4,164 | |||||||||||||||||||||||||||
Current portion of advances and refundable deposits | — | — | — | — | — | — | — | 1,825 | 1,825 | |||||||||||||||||||||||||||
Total assets | 56,397 | 2,098 | 193 | 762 | 131 | — | 59,581 | 192,977 | 252,558 | |||||||||||||||||||||||||||
Liabilities as at December 31, 2008 | ||||||||||||||||||||||||||||||||||||
Noncurrent: | ||||||||||||||||||||||||||||||||||||
Interest-bearing financial liabilities — net of current portion | — | — | — | — | — | 58,910 | 58,910 | — | 58,910 | |||||||||||||||||||||||||||
Deferred income tax liabilities — net | — | — | — | — | — | — | — | 1,288 | 1,288 | |||||||||||||||||||||||||||
Derivative financial liabilities | — | — | — | 1,761 | — | — | 1,761 | — | 1,761 | |||||||||||||||||||||||||||
Pension and other employee benefits | — | — | — | — | — | — | — | 5,467 | 5,467 | |||||||||||||||||||||||||||
Customers’ deposits | — | — | — | — | — | 2,251 | 2,251 | — | 2,251 | |||||||||||||||||||||||||||
Deferred credits and other noncurrent liabilities | — | — | — | — | — | 9,273 | 9,273 | 1,309 | 10,582 | |||||||||||||||||||||||||||
Current: | ||||||||||||||||||||||||||||||||||||
Accounts payable | — | — | — | — | — | 16,294 | 16,294 | 1,974 | 18,268 | |||||||||||||||||||||||||||
Accrued expenses and other current liabilities | — | — | — | — | — | 18,612 | 18,612 | 5,769 | 24,381 | |||||||||||||||||||||||||||
Derivative financial liabilities | — | — | — | 87 | — | — | 87 | — | 87 | |||||||||||||||||||||||||||
Provision for assessments | — | — | — | — | — | — | — | 1,555 | 1,555 | |||||||||||||||||||||||||||
Current portion of interest-bearing financial liabilities | — | — | — | — | — | 15,080 | 15,080 | — | 15,080 | |||||||||||||||||||||||||||
Dividends payable | — | — | — | — | — | 1,379 | 1,379 | — | 1,379 | |||||||||||||||||||||||||||
Income tax payable | — | — | — | — | — | — | — | 4,580 | 4,580 | |||||||||||||||||||||||||||
Total liabilities | — | — | — | 1,848 | — | 121,799 | 123,647 | 21,942 | 145,589 | |||||||||||||||||||||||||||
Net assets (liabilities) | 56,397 | 2,098 | 193 | (1,086 | ) | 131 | (121,799 | ) | (64,066 | ) | 171,035 | 106,969 | ||||||||||||||||||||||||
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Carrying Value | Fair Value | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in million pesos) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Available-for-sale financial assets: | ||||||||||||||||
Listed equity securities | 68 | 69 | 68 | 69 | ||||||||||||
Unlisted equity securities | 66 | 62 | 66 | 62 | ||||||||||||
Investment in debt securities — net of current portion | 462 | 635 | 474 | 629 | ||||||||||||
Advances and refundable deposits — net of current portion | 842 | 840 | 732 | 728 | ||||||||||||
Total noncurrent financial assets | 1,438 | 1,606 | 1,340 | 1,488 | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash on hand and in banks | 3,300 | 4,164 | 3,300 | 4,164 | ||||||||||||
Temporary cash investments | 35,019 | 29,520 | 35,019 | 29,520 | ||||||||||||
Short-term investments | 3,824 | 6,670 | 3,824 | 6,670 | ||||||||||||
Current portion of investment in debt securities | — | 1,656 | — | 1,656 | ||||||||||||
Trade and other receivables — net: | ||||||||||||||||
Foreign administrations | 4,064 | 5,477 | 4,064 | 5,477 | ||||||||||||
Retail subscribers | 3,546 | 3,904 | 3,546 | 3,904 | ||||||||||||
Corporate subscribers | 2,429 | 2,865 | 2,429 | 2,865 | ||||||||||||
Domestic carriers | 1,184 | 703 | 1,184 | 703 | ||||||||||||
Dealers, agents and others | 3,506 | 2,960 | 3,506 | 2,960 | ||||||||||||
Derivative financial assets: | ||||||||||||||||
Bifurcated embedded derivatives | 6 | 2 | 6 | 2 | ||||||||||||
Foreign currency options | — | 38 | — | 38 | ||||||||||||
Forward foreign exchange options | — | 16 | — | 16 | ||||||||||||
Current portion of advances and refundable deposits | 7 | — | 7 | — | ||||||||||||
Total current financial assets | 56,885 | 57,975 | 56,885 | 57,975 | ||||||||||||
Total Financial Assets | 58,323 | 59,581 | 58,225 | 59,463 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities: | ||||||||||||||||
Long-term debt — net of current portion | 86,066 | 58,899 | 88,383 | 57,058 | ||||||||||||
Obligations under finance lease | 13 | 11 | 12 | 11 | ||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Long-term currency swap | 2,751 | 1,761 | 2,751 | 1,761 | ||||||||||||
Customers’ deposits | 2,166 | 2,251 | 1,375 | 1,476 | ||||||||||||
Deferred credits and other noncurrent liabilities | 13,159 | 9,273 | 11,629 | 7,959 | ||||||||||||
Total noncurrent financial liabilities | 104,155 | 72,195 | 104,150 | 68,265 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable: | ||||||||||||||||
Suppliers and contractors | 14,975 | 14,131 | 14,975 | 14,131 | ||||||||||||
Carriers | 1,937 | 1,780 | 1,937 | 1,780 | ||||||||||||
Related parties | 233 | 120 | 233 | 120 | ||||||||||||
Others | 553 | 263 | 553 | 263 | ||||||||||||
Accrued expenses and other current liabilities: | ||||||||||||||||
Utilities and related expenses | 17,388 | 13,385 | 17,388 | 13,385 | ||||||||||||
Employee benefits | 8,071 | 2,925 | 8,071 | 2,925 | ||||||||||||
Interests and other related costs | 1,167 | 1,212 | 1,167 | 1,212 | ||||||||||||
Others | 2,061 | 1,090 | 2,061 | 1,090 | ||||||||||||
Derivative financial liabilities: | ||||||||||||||||
Foreign currency options | — | 44 | — | 44 | ||||||||||||
Forward foreign exchange contracts | — | 31 | — | 31 | ||||||||||||
Bifurcated embedded derivatives | — | 11 | — | 11 | ||||||||||||
Bifurcated equity call options | — | 1 | — | 1 |
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Carrying Value | Fair Value | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in million pesos) | ||||||||||||||||
Interest-bearing financial liabilities: | ||||||||||||||||
Notes payable | 2,279 | 553 | 2,279 | 553 | ||||||||||||
Current portion of long-term debt | 10,384 | 14,459 | 10,384 | 14,459 | ||||||||||||
Obligations under finance lease | 51 | 59 | 51 | 59 | ||||||||||||
Preferred stock subject to mandatory redemption | — | 9 | — | 9 | ||||||||||||
Dividends payable | 1,749 | 1,379 | 1,749 | 1,379 | ||||||||||||
Total current financial liabilities | 60,848 | 51,452 | 60,848 | 51,452 | ||||||||||||
Total Financial Liabilities | 165,003 | 123,647 | 164,998 | 119,717 | ||||||||||||
2009 | 2008 | |||||||||||||||||||||||
Level 1(1) | Level 2(2) | Total | Level 1(1) | Level 2(2) | Total | |||||||||||||||||||
(in million pesos) | ||||||||||||||||||||||||
Noncurrent Financial Asset | ||||||||||||||||||||||||
Available-for-sale financial assets — Listed equity securities | 68 | — | 68 | 69 | — | 69 | ||||||||||||||||||
Investment in debt securities | — | — | — | 193 | — | 193 | ||||||||||||||||||
Current Financial Assets | ||||||||||||||||||||||||
Short-term investments | 486 | — | 486 | 706 | — | 706 | ||||||||||||||||||
Derivative financial assets | — | 6 | 6 | — | 56 | 56 | ||||||||||||||||||
Total | 554 | 6 | 560 | 968 | 56 | 1,024 | ||||||||||||||||||
Noncurrent Financial Liability | ||||||||||||||||||||||||
Derivative financial liabilities | — | 2,751 | 2,751 | — | 1,761 | 1,761 | ||||||||||||||||||
Current Financial Liability | ||||||||||||||||||||||||
Derivative financial liabilities | — | — | — | — | 87 | 87 | ||||||||||||||||||
Total | — | 2,751 | 2,751 | — | 1,848 | 1,848 | ||||||||||||||||||
(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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2009 | 2008 | |||||||||||||||||||
Mark-to- | Mark-to- | |||||||||||||||||||
market Gains | market Gains | |||||||||||||||||||
Maturity | Notional | (Losses) | Notional | (Losses) | ||||||||||||||||
(in millions) | ||||||||||||||||||||
PLDT | ||||||||||||||||||||
Currency swaps | 2017 | US$ | 245 | Php | (1,803 | ) | US$ | 295 | Php | (1,197 | ) | |||||||||
2012 | 146 | (948 | ) | 159 | (564 | ) | ||||||||||||||
Foreign currency sold call options | 2009 | — | — | 57 | (1) | 10 | ||||||||||||||
Foreign currency bought call options | 2009 | — | — | 57 | (16 | ) | ||||||||||||||
Forward foreign exchange contracts | 2009 | — | — | 57 | (31 | ) | ||||||||||||||
Bifurcated equity call options | 2009 | — | — | — | (1 | ) | ||||||||||||||
(2,751 | ) | (1,799 | ) | |||||||||||||||||
Smart | ||||||||||||||||||||
Bifurcated embedded derivatives | 2010 | — | 2 | 3 | (10 | ) | ||||||||||||||
— | 2 | (10 | ) | |||||||||||||||||
ePLDT | ||||||||||||||||||||
Forward foreign exchange contracts | 2009 | — | — | 5 | 16 | |||||||||||||||
Bifurcated embedded derivatives | 2012 | 1 | 4 | 2 | 1 | |||||||||||||||
4 | 17 | |||||||||||||||||||
Net liabilities | Php | (2,745 | ) | Php | (1,792 | ) | ||||||||||||||
(1) | Foreign currency sold call options based on the same notional amount as the foreign currency bought call options. |
2009 | 2008 | |||||||
(in million pesos) | ||||||||
Presented as: | ||||||||
Current assets | 6 | 56 | ||||||
Noncurrent liabilities | (2,751 | ) | (1,761 | ) | ||||
Current liabilities | — | (87 | ) | |||||
Net liabilities | (2,745 | ) | (1,792 | ) | ||||
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Net mark-to-market losses at end of year | (2,745 | ) | (1,792 | ) | (7,027 | ) | ||||||
Net mark-to-market losses at beginning of year | (1,792 | ) | (7,027 | ) | (6,499 | ) | ||||||
Net change | (953 | ) | 5,235 | (528 | ) | |||||||
Settlements, accretion and conversion | 546 | (2,367 | ) | (622 | ) | |||||||
Hedge cost | (599 | ) | (819 | ) | (1,125 | ) | ||||||
Net losses on cash flow hedges charged to cumulative translation adjustments | — | 662 | (570 | ) | ||||||||
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 | (4 | ) | ||||||||
Net gains (losses) on derivative financial instruments (Note 4) | (1,006 | ) | 3,115 | (2,849 | ) | |||||||
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Note 20 — Interest-bearing Financial Liabilities. Each share of Series VI Convertible Preferred Stock is convertible at any time at the option of the holder into one share of PLDT’s common stock. On the date immediately following the seventh anniversary of the issue date of the Series VI Convertible Preferred Stock, the remaining outstanding shares under this series will be mandatorily converted into shares of PLDT’s common stock. For 30 days thereafter, the holders of these mandatorily converted shares of PLDT’s common stock have the option to sell such shares of PLDT’s common stock back to PLDT for US$36.13. On June 5, 2008 and November 9, 2009, a total of 341 thousand shares of the Series VI Convertible Preferred Stock were converted to PLDT common stock. As at December 31, 2009, there are no embedded call options. As at December 31, 2008, the negative fair market value of these embedded call options amounted to Php1 million.
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2009 | 2008 | |||||||||||||||
U.S. Dollar | Php(1) | U.S. Dollar | Php(2) | |||||||||||||
(in millions) | ||||||||||||||||
Noncurrent Financial Assets | ||||||||||||||||
Note receivable | 2 | 81 | — | — | ||||||||||||
Advances and refundable deposits | — | 7 | — | — | ||||||||||||
Total noncurrent financial assets | 2 | 88 | — | — | ||||||||||||
Current Financial Assets | ||||||||||||||||
Cash and cash equivalents | 140 | 6,496 | 101 | 4,794 | ||||||||||||
Short-term investments | 47 | 2,164 | 21 | 986 | ||||||||||||
Trade and other receivables — net | 206 | 9,573 | 207 | 9,880 | ||||||||||||
Derivative financial assets | — | 6 | 1 | 56 | ||||||||||||
Total current financial assets | 393 | 18,239 | 330 | 15,716 | ||||||||||||
Total Financial Assets | 395 | 18,327 | 330 | 15,716 | ||||||||||||
Noncurrent Financial Liabilities | ||||||||||||||||
Interest-bearing financial liabilities — net of current portion | 837 | 38,871 | 925 | 44,064 | ||||||||||||
Derivative financial liabilities | 59 | 2,751 | 37 | 1,761 | ||||||||||||
Total noncurrent financial liabilities | 896 | 41,622 | 962 | 45,825 | ||||||||||||
Current Financial Liabilities | ||||||||||||||||
Accounts payable | 155 | 7,180 | 143 | 6,820 | ||||||||||||
Accrued expenses and other current liabilities | 95 | 4,409 | 93 | 4,447 | ||||||||||||
Derivative financial liabilities | — | — | 2 | 87 | ||||||||||||
Current portion of interest-bearing financial liabilities | 155 | 7,220 | 301 | 14,331 | ||||||||||||
Total current financial liabilities | 405 | 18,809 | 539 | 25,685 | ||||||||||||
Total Financial Liabilities | 1,301 | 60,431 | 1,501 | 71,510 | ||||||||||||
(1) | 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. | |
(2) | The exchange rate used to translate the U.S. dollar amounts into Philippine peso was Php47.65 to US$1.00, the peso-dollar exchange rate as quoted through the Philippine Dealing System as at December 31, 2008. |
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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 | 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 + | US$LIBOR + | US$LIBOR + | US$LIBOR + | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
0.05% to 2.5% | 0.42% to 1.85%; | 0.42% to 1.85%; | 0.42% to 1.85%; | |||||||||||||||||||||||||||||||||||||||||
swap rate + | swap rate + | swap rate + | ||||||||||||||||||||||||||||||||||||||||||
2.79% | 2.79% | 2.79% | ||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | — | 185 | 81 | 107 | — | 373 | 17,349 | 27 | 17,322 | 373 | 17,322 | |||||||||||||||||||||||||||||||||
Interest rate | — | MART 1 + | PDST-F + | PDST-F + | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
0.75%; | 1.0% to 1.50%; | 1.0% to 1.50% | ||||||||||||||||||||||||||||||||||||||||||
PDST-F + | AUB’s prime rate | |||||||||||||||||||||||||||||||||||||||||||
1.0% to 1.5%; AUB’s prime rate | ||||||||||||||||||||||||||||||||||||||||||||
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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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 | 26 | — | — | — | — | 26 | 1,258 | — | 1,258 | 26 | 1,258 | |||||||||||||||||||||||||||||||||
Interest rate | 0.10% to 4.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 56 | — | — | — | — | 56 | 2,682 | — | 2,682 | 56 | 2,682 | |||||||||||||||||||||||||||||||||
Interest rate | 0.25% to 3.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Temporary Cash Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 74 | — | — | — | — | 74 | 3,400 | — | 3,400 | 74 | 3,400 | |||||||||||||||||||||||||||||||||
Interest rate | 0.30% to 7.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 567 | — | — | — | — | 567 | 26,120 | — | 26,120 | 567 | 26,120 | |||||||||||||||||||||||||||||||||
Interest rate | 2% to 7.50% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Investments | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 21 | — | — | — | — | 21 | 985 | — | 985 | 21 | 985 | |||||||||||||||||||||||||||||||||
Interest rate | 3.29% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | 119 | — | — | — | — | 119 | 5,685 | — | 5,685 | 119 | 5,685 | |||||||||||||||||||||||||||||||||
Interest rate | 6.69% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Investment in Debt Securities | ||||||||||||||||||||||||||||||||||||||||||||
Philippine Peso | 35 | — | 4 | 9 | — | 48 | 2,291 | — | 2,291 | 48 | 2,285 | |||||||||||||||||||||||||||||||||
Interest rate | 6.3194% | — | 6.125% | 6.875% to 7% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
898 | — | 4 | 9 | — | 911 | 42,421 | — | 42,421 | 911 | 42,415 | ||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Fixed Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar Notes | 114 | — | — | 159 | 295 | 568 | 27,061 | 368 | 26,693 | 559 | 26,607 | |||||||||||||||||||||||||||||||||
Interest rate | 10.50% | — | — | 11.375% | 8.35% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
U.S. Dollar Fixed Loans | 22 | 50 | 11 | 3 | 280 | 366 | 17,444 | 4,046 | 13,398 | 252 | 12,030 | |||||||||||||||||||||||||||||||||
Interest rate | 4.49% to 6% | 3.79% to 4.70% | 3.79% to 4.70% | 3.79% | 2.25% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 3 | 1 | 182 | 33 | 219 | 10,420 | 79 | 10,341 | 209 | 9,955 | |||||||||||||||||||||||||||||||||
Interest rate | — | 6.50% to 8.4346% | 5.625% to 8.4346% | 5.625% to 8.4346% | 6.125% to 6.50% | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Variable Rate | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 13 | 215 | 59 | 77 | — | 364 | 17,339 | 67 | 17,272 | 363 | 17,272 | |||||||||||||||||||||||||||||||||
Interest rate | US$LIBOR + 1.75% to 2.75% | US$LIBOR + 0.42% to 2.50% | US$LIBOR + 0.42% to 0.815% | US$LIBOR + 0.42% to 0.75% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Philippine Peso | — | 47 | 32 | 40 | — | 119 | 5,670 | 16 | 5,654 | 119 | 5,653 | |||||||||||||||||||||||||||||||||
Interest rate | — | MART 1 + 0.75% to 5.70%; PDST-F + 1.0% to 1.50% | MART 1 + 0.75%; PDST-F + 1.0% to 1.50% | PDST-F + 1.0% to 1.50% | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Short-term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Dollar | 12 | — | — | — | — | 12 | 553 | — | 553 | 12 | 553 | |||||||||||||||||||||||||||||||||
Interest rate | 5.25% to 5.30% | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
161 | 315 | 103 | 461 | 608 | 1,648 | 78,487 | 4,576 | 73,911 | 1,514 | 72,070 | ||||||||||||||||||||||||||||||||||
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Gross Maximum Exposure(1) | Net Maximum Exposure(2) | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
(in million pesos) | ||||||||||||||||
Loans and receivables: | ||||||||||||||||
Advances and refundable deposits | 849 | 840 | 848 | 840 | ||||||||||||
Cash and cash equivalents | 38,319 | 33,684 | 38,101 | 33,621 | ||||||||||||
Short-term investments | 3,338 | 5,964 | 3,338 | 5,963 | ||||||||||||
Foreign administrations | 4,064 | 5,477 | 4,011 | 5,477 | ||||||||||||
Retail subscribers | 3,546 | 3,904 | 3,505 | 3,877 | ||||||||||||
Corporate subscribers | 2,429 | 2,865 | 2,328 | 2,709 | ||||||||||||
Domestic carriers | 1,184 | 703 | 1,184 | 703 | ||||||||||||
Dealers, agents and others | 3,506 | 2,960 | 3,506 | 2,958 | ||||||||||||
Held-to-maturity investments: | ||||||||||||||||
Investment in debt securities | 462 | 2,098 | 462 | 2,098 | ||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||
Investment in debt securities | — | 193 | — | 193 | ||||||||||||
Available-for-sale financial assets | 134 | 131 | 134 | 131 | ||||||||||||
Held-for-trading: | ||||||||||||||||
Short-term investments | 486 | 706 | 486 | 706 | ||||||||||||
Bifurcated embedded derivatives | 6 | 2 | 6 | 2 | ||||||||||||
Foreign currency options | — | 38 | — | 38 | ||||||||||||
Forward foreign exchange contracts | — | 16 | — | 16 | ||||||||||||
Total | 58,323 | 59,581 | 57,909 | 59,332 | ||||||||||||
(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 or other credit enhancements or offsetting arrangements or deposit insurance. |
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Neither past due | Past due but | |||||||||||||||||||
nor impaired | not | |||||||||||||||||||
Total | Class A(1) | Class B(2) | impaired | Impaired | ||||||||||||||||
(in million pesos) | ||||||||||||||||||||
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 | — | — | |||||||||||||||
Held-for-trading(3): | ||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | |||||||||||||||
Total | 70,273 | 48,385 | 3,291 | 6,647 | 11,950 | |||||||||||||||
December 31, 2008 | ||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||
Advances and refundable deposits | 840 | 703 | 137 | — | — | |||||||||||||||
Cash and cash equivalents | 33,684 | 32,979 | 705 | — | — | |||||||||||||||
Short-term investments | 5,964 | 5,680 | 284 | — | — | |||||||||||||||
Corporate subscribers | 9,188 | 858 | 272 | 1,663 | 6,395 | |||||||||||||||
Retail subscribers | 8,993 | 1,457 | 550 | 1,897 | 5,089 | |||||||||||||||
Foreign administrations | 5,916 | 2,602 | 956 | 1,919 | 439 | |||||||||||||||
Domestic carriers | 877 | 84 | 3 | 616 | 174 | |||||||||||||||
Dealers, agents and others | 3,271 | 2,114 | 444 | 402 | 311 | |||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||
Investment in debt securities | 2,098 | 2,098 | — | — | — | |||||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||||||
Investment in debt securities | 193 | 193 | — | — | — | |||||||||||||||
Available-for-sale financial assets | 131 | 103 | 28 | — | — | |||||||||||||||
Held-for-trading(3): | ||||||||||||||||||||
Short-term investments | 706 | 706 | — | — | — | |||||||||||||||
Forward foreign currency options | 38 | 38 | — | — | — | |||||||||||||||
Forward foreign exchange contracts | 16 | 16 | — | — | — | |||||||||||||||
Bifurcated embedded derivatives | 2 | 2 | — | — | — | |||||||||||||||
Total | 71,917 | 49,633 | 3,379 | 6,497 | 12,408 | |||||||||||||||
(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, 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 | — | — | — | — | ||||||||||||||||||
Held-for-trading: | ||||||||||||||||||||||||
Short-term investments | 486 | 486 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 6 | 6 | — | — | — | — | ||||||||||||||||||
Total | 70,273 | 51,676 | 3,730 | 1,101 | 1,816 | 11,950 | ||||||||||||||||||
December 31, 2008 | ||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Advances and refundable deposits | 840 | 840 | — | — | — | — | ||||||||||||||||||
Cash and cash equivalents | 33,684 | 33,684 | — | — | — | — | ||||||||||||||||||
Short-term investments | 5,964 | 5,964 | — | — | — | — | ||||||||||||||||||
Corporate subscribers | 9,188 | 1,130 | 1,024 | 313 | 326 | 6,395 | ||||||||||||||||||
Retail subscribers | 8,993 | 2,007 | 1,338 | 266 | 293 | 5,089 | ||||||||||||||||||
Foreign administrations | 5,916 | 3,558 | 1,043 | 550 | 326 | 439 | ||||||||||||||||||
Domestic carriers | 877 | 87 | 80 | 87 | 449 | 174 | ||||||||||||||||||
Dealers, agents and others | 3,271 | 2,558 | 48 | 9 | 345 | 311 | ||||||||||||||||||
Held-to-maturity investments: | ||||||||||||||||||||||||
Investment in debt securities | 2,098 | 2,098 | — | — | — | — | ||||||||||||||||||
Designated at fair value through profit or loss: | ||||||||||||||||||||||||
Investment in debt securities | 193 | 193 | — | — | — | — | ||||||||||||||||||
Available-for-sale financial assets | 131 | 131 | — | — | — | — | ||||||||||||||||||
Held-for-trading: | ||||||||||||||||||||||||
Short-term investments | 706 | 706 | — | — | — | — | ||||||||||||||||||
Forward foreign currency options | 38 | 38 | — | — | — | — | ||||||||||||||||||
Forward foreign exchange contracts | 16 | 16 | — | — | — | — | ||||||||||||||||||
Bifurcated embedded derivatives | 2 | 2 | — | — | — | — | ||||||||||||||||||
Total | 71,917 | 53,012 | 3,533 | 1,225 | 1,739 | 12,408 | ||||||||||||||||||
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2009 | 2008 | |||||||
(in million pesos) | ||||||||
Long-term debt, including current portion (Note 20) | 96,450 | 73,358 | ||||||
Notes payable (Note 20) | 2,279 | 553 | ||||||
Total consolidated debt | 98,729 | 73,911 | ||||||
Cash and cash equivalents (Note 15) | (38,319 | ) | (33,684 | ) | ||||
Short-term investments | (3,824 | ) | (6,670 | ) | ||||
Net consolidated debt | 56,586 | 33,557 | ||||||
Equity attributable to equity holders of PLDT | 98,575 | 105,531 | ||||||
Net consolidated debt to equity ratio | 57 | % | 32 | % | ||||
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29. | Cash Flow Information |
2009 | 2008 | 2007 | ||||||||||
(in million pesos) | ||||||||||||
Non-cash financing activities: | ||||||||||||
Recognition of asset retirement obligations (Note 21) | 17 | 70 | 48 | |||||||||
Conversion of preferred stock subject to mandatory redemption (Note 20) | 9 | 1,077 | 313 |
30. | Subsequent Events |
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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 June 28, 2005) (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in June 2006) | |||
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) | By-Laws (as amended on June 28, 2005) (incorporated by reference to PLDT’s Form 20-F as filed with the Securities and Exchange Commission in June 2006) | |||
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 Piltel, Piltel (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 |
158