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ABS-CBN Corporation

Sgt. Esguerra Avenue, Quezon City, Philippines

27 April 2012

Philippine Stock Exchange, Inc. Attn: Ms. Janet A. Encarnacion Head, Disclosure Department 3rd Floor, Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue, Makati City

Subject: Submmission of the Annual Report for the fiscal year ended December 31, 2011

Gentlemen / Ladies: We are submitting SEC 17-A (Annual Report) for the fiscal year ended December 31, 2011.

Very truly yours,

Paul Michael V. Villanueva Compliance Officer for Corporate Governance

COVER SHEET
1 8 0 3
SEC Registration Number

A B S - C B N - C B N D

C O R P O R A T I O N

(

f o r m e r

l

y

A B S A N

B R O A D C A S T I N G I D I A R I E S

C O R P O R A T

I O N )

S U B S

(Company’s Full Name)

S G T . M O .

E S G U E R R A I G N A C I A C I T Y

A V E

.

C O R N E R

S T .

Q U E Z O N

(Business Address: No. Street City/Town/Province)

Rolando P. Valdueza
(Contact Person)

415-2272
(Company Telephone Number)

1 2
Month

3 1
Day

1 7 A
(Form Type)

0 6
Month

2 1
Day

(Fiscal Year)

(Annual Meeting)

(Secondary License Type, If Applicable)

Dept. Requiring this Doc.

Amended Articles Number/Section Total Amount of Borrowings

6,062
Total No. of Stockholders

P12.8 billion =
Domestic To be accomplished by SEC Personnel concerned

$1.0 million
Foreign

File Number

LCU

Document ID

Cashier

STAMPS Remarks: Please use BLACK ink for scanning purposes.

SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES

1. For the fiscal year ended December 31, 2011 2. SEC Identification Number 1803 3. BIR Tax Identification No. 301-000-406-761V

4. Exact name of issuer as specified in its charter: ABS-CBN CORPORATION AND SUBSIDIARIES 5. Philippines Province, Country or other jurisdiction of incorporation or organization 6. (SEC Use Only) Industry Classification Code:

7. ABS-CBN Broadcasting Center, Sgt. Esguerra Ave cor Mo Ignacia St., Quezon City 1100 Address of principal office 8. (632) 924-41-01 to 22 / 415-2272 Issuer's telephone number, including area code 9. Not applicable Former name, former address, and former fiscal year, if changed since last report. 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding 779,584,602 as at December 31, 2011 Php12.5 billion

Title of Each Class Common Stock, Php1.00 par value

Short-term & Long-term debt (current & non-current) 11. Are any or all of these securities listed on a Stock Exchange? Yes [] No [ ]

If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange Common Stock

12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The

Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports); Yes [] No [ ]

(b) has been subject to such filing requirements for the past ninety (90) days. Yes [] No [ ]

TABLE OF CONTENTS

PART I – BUSINESS AND GENERAL INFORMATION Item 1. Business Item 2. Properties Item 3. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders PART II -- OPERATIONAL AND FINANCIAL INFORMATION Item 5. Market for Issuer’s Common Equity and Related Stockholder Matters Item 6. Management’s Discussion and Analysis or Plan of Operation Item 7. Financial Statements Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure PART III – CONTROL AND COMPENSATION INFORMATION Item 9. Directors and Executive Officers of the Issuer Item 10. Executive Compensation Item 11. Security Ownership of Certain Beneficial Owners and Management Item 12. Certain Relationships and Related Transactions PART IV – CORPORATE GOVERNANCE Item 13. Corporate Governance PART V – EXHIBITS AND SCHEDULES Item 14. Exhibits and Reports on SEC Form 17-C SIGNATURES

PART I - BUSINESS AND GENERAL INFORMATION Item 1. Business Business Overview ABS-CBN Corporation (“ABS-CBN” or the “Company”) is the Philippines’ leading information and entertainment multimedia conglomerate. The Company is primarily involved in television and radio broadcasting, as well as in the production of television and radio programming for domestic and international audiences and other related businesses. The Company produces a wide variety of engaging, world-class entertainment programs in multiple genres and balanced, credible news programs that are aired on free-to-air television via its Very High Frequency (VHF) TV network, Channel 2, and its Ultra High Frequency (UHF) TV network, Studio 23, along with a vast regional network of TV stations nationwide. The Company’s VHF television network, anchored by Channel 2, its flagship station in Mega Manila, and several owned and operated television stations and affiliated stations throughout the country, is the highest-rating and most expansive television network in the country. The Company also owns and operates Studio 23, the leading UHF channel, with a vast network of UHF stations nationwide. Studio 23 complements Channel 2’s mass-based programming through its airing of popular foreign series and local sports programming. The Company is also one of the leading radio broadcasters, operating 18 AM and FM radio stations throughout the key cities of the Philippines. ABS-CBN’s anchor radio stations in Manila, DZMM on the AM band and DWRR on the FM band, are among the most-listened to in Mega Manila. In addition, ABS-CBN, through its subsidiaries, Sarimanok News Network, Inc. and Creative Programs, Inc., also provides news and entertainment programming for 9 channels on cable TV – ABS-CBN News Channel or ANC, Cinema One, Lifestyle Network, Myx, Balls, Velvet, Hero, and DZMM Teleradyo. The Company owns the leading film and music production and distribution outfits in the country, Star Cinema and Star Records, and also has business interests in content development and production, merchandising and licensing, cable and satellite television services, mobile and online multimedia services, glossy magazine publishing, video and audio post production, overseas telecommunication services, money remittance, cargo forwarding, property management and food and restaurant services, all of which complement and enhance the Company’s strength in content production and distribution. ABS-CBN brings its content to worldwide audiences via cable, satellite, online and mobile, through its various international subsidiaries and affiliates, and its flagship channel, The Filipino Channel (TFC). TFC is available in most major territories with a significant Filipino populace such as the United States, the Middle East, Europe, Australia, Canada and Japan. With direct ties to more than 2 million viewers outside the Philippines, ABS-CBN Global also offers services vital to the overseas Filipino – long-distance telecoms, money remittance and cargo forwarding. As of end-2011, ABS-CBN Global accounts for 17% of the Company’s top line. ABS-CBN also holds an interest in the country’s largest cable TV network, SkyCable. Cornering over half of the total pay TV subscribers in the country, SkyCable represents a major content distribution platform for the Company. Aside from providing postpaid and prepaid cable TV services, SkyCable also offers SkyBroadband, the fastest residential broadband internet service in the country, and SkyVoice, the most affordable long-distance telecommunication package available. Throughout the years, the Company has evolved from a purely broadcasting business into a thriving multimedia content and distribution conglomerate that continues to be in the service of the Filipino. ABS-CBN has diversified its revenue sources; from relying mostly on airtime advertising revenue, the Company now sources about 40% of its sales direct from its consumers in the form of subscription and other services and goods. ABS-CBN’s common shares and Philippine Depositary Receipts are traded in the Philippine Stock Exchange. Historical Background

Building on our core strength in content creation. we will ensure our continued relevance by distributing our content in the widest array of platforms that technology will allow. It has been considered to be the catalyst for the re-emergence of the local cinema industry. the local film industry’s unofficial benchmark for a blockbuster hit. through relentless effort. anywhere. ABS-CBN ceased operations as the government forcibly took control of the Company. ABS-CBN achieved many firsts since it started the television industry in the country in 1953. as we deliver greater value to our customers. . AFPI produced 16 film. the medium used to access our content – our core ability to create quality content that touches. produces films primarily for the domestic market and has already penetrated the international scene. However. acquired ABS and on February 1. was organized primarily for radio broadcasting. We are driven to pioneer and innovate because we know that we help more Filipinos discover themselves and connect to one another.ABS-CBN traces its roots from Bolinao Electronics Corporation (BEC). Our audience will be able to reach us anytime at any place in any medium. 6 of which grossed upwards of Php100 million. international distribution. Recovery after 14 years of absence was difficult as resources were scarce. partners. the production process. (AFPI) or more popularly known as Star Cinema. Business Strategy Transforming lives by changing the media landscape is both ABS-CBN’s vision and passion. ABS-CBN resumed commercial operations in 1986 after the People Power or EDSA revolution. Inc. which was once floundering due to the proliferation of piracy. On September 24. inspires and empowers our viewers must remain constant. the operations of ABS and CBN were integrated and BEC changed its corporate name to ABS-CBN Broadcasting Corporation. the Company expanded and ventured into complementary businesses in cable TV. and shareholders. The key elements to our business strategy are: Anytime. In 1957. In ABS-CBN. mobile services. We will continue building on our core strength in content creation. In 1952. is the country’s leading film producer and distributor. ABS-CBN Global Ltd. Inc. We will consciously operate more efficiently and cost-effectively. and magazine publishing among others. BEC adopted the business name Alto Broadcasting Corporation (ABS) and began setting up the country’s first television broadcast by 1953. ABS-CBN recaptured leadership in the Philippine television and radio industries by 1988. of the Lopez family. Nevertheless. with the imposition of martial law in September 1972. we are firmly committed to pursuing excellence. established in 1946 as an assembler of radio transmitting equipment. a 100%-owned subsidiary of ABS-CBN. 1956. During the 1990s and the early part of the new millennium. in any device or medium. Sixteen of AFPI’s films comprise the list of the country’s top 20 highest local movie grosses of all time. As our audience demand greater control over how and when they will consume our content. AFPI. Subsidiaries and Affiliates ABS-CBN Film Productions. Chronicle Broadcasting Network (CBN). We will derive the most synergies possible between our content and distribution businesses. ABS-CBN Film Productions. including 9 of the top 10. having conducted several sold-out international screenings. owned by Don Eugenio Lopez Sr. Maintain a strong fiscal position and bring value to our stakeholders. In 2011. We open pathways to opportunities and we bring people a step closer to their dreams. While everything around us changes – the technology. clients. 1967. Don Eugenio Lopez Sr.

Cinema One. As of end-2011.4 million viewers in over 40 countries across 4 continents worldwide. one of the world’s largest social networks. both immigrants and temporary workers. join promos. marking ABS-CBN’s entry into the internet space as a distribution platform for its content. While each cable channel addresses the information and entertainment needs of a specific niche target. including Multiply. In July 2005. ABSi initially undertook the development of PinoyCentral. Inc. brings high-quality Filipino movies to every household. revolutionized music video consumption. Australia. ABS-CBN Publishing. technology and mobile partner. Europe. cementing ABSi’s place among the top mobile content providers in the country. Inc. ABS-CBN incorporated ABS-CBN Interactive. ABS-CBN Interactive. ABSi developed a slew of mobile products. CPI’s cable channels collectively captures all the demographic markets vital to advertisers. where ABSi is an exclusive marketing. celebrity. among others. ABS-CBN Publishing (API) completes the Company’s tri-media coverage with 13 glossy magazine titles. Realizing the emergence of new media technologies. API’s glossy magazine titles serve niche upscale interests. each delivering superior cable programming anchored on various genres. DirecTV will pay license fees to ABS-CBN and to ABS-CBN International. Internet Protocol TV [IPTV]. leveraging on ABS-CBN’s content properties. gossip and entertainment. the Middle East. Under the deal. TFCNow!. inviting viewers to sing along as the lyrics are shown on screen. (ABSi) in January 1999 to manage the Company’s new media ventures and strategies. ABSi also developed the Company’s online video streaming service. ABS-CBN. Inc. while Balls promises fun and thrill to active upscale males with its sports and irreverent content. ABS-CBN Global reaches over 2. Myx. to culinary arts. through ABS-CBN Global’s subsidiary. TFC is targeted specifically at overseas Filipinos. Creative Programs. an online portal for Filipino web content. and keep in touch with their favorite celebrities. signed an affiliation agreement with DirecTV. ASB-CBN International. cable. ABSi’s mobile value-added service (VAS) products broke new ground. . anchored by one of the country’s leading fashion and lifestyle magazine. ABSi ensures that ABS-CBN remains relevant among the internet population through its primary websites. TFC is available in various formats (DTH. Established in 1992. (CPI) manages and operates the Company’s 7 cable channel offerings. In return. which garnered international recognition for its innovativeness. Hero.ABS-CBN pioneered international content distribution when it launched the country’s first international direct-to-home (DTH) and cable channel service through ABS-CBN Global’s The Filipino Channel (TFC). vote for their favorite reality show contestant. delivers excitement to the youth as they go through their journey for self expansion and awareness. parenting and interior design.com. one of the leading DTH system providers in the United States. ABSi also went into the gaming business. abs-cbn. from the development of mobile games tied up to ABS-CBN content to the licensing of popular international role-playing and casual games. Canada. Inc. and Japan. among others. the highest rating cable channel and the premier Filipino movie channel. the number one animè channel. ABSi pioneered mobile and TV tie-ups in the Philippines. enabling the mobile phone user to send in their feedback on ABS-CBN programs. As the Company’s link to the online space.com and abs-cbnnews. Inc. Launched in 1994. Riding the wave of increased mobile phone and short message service (SMS) usage in the Philippines. and through the various social networking communities. ranging from fashion and lifestyle. Each magazine title leverages on ABS-CBN’s content and enhances the Company’s other content and distribution properties. DirecTV has the exclusive right to distribute the TFC package on its DTH platform. the leading music channel. Upscale females find the Lifestyle Network and Velvet as indispensable companions for empowerment in their busy and demanding environment. Creative Programs. Metro. mobile and online through TFCNow) in all territories where there is a significant market of overseas Filipinos such as the United States.

Star Songs. business. Inc. (Star Records) / Star Songs. ANC is also available worldwide via the TFC package of ABS-CBN Global. strengthening its hold as the country’s number 1 cable channel. It introduced the first and only real triple-play service in the market in Metro Manila with Sky Bundle Plan 1099. Studio 23. which handles the Company’s music publishing and composing requirements. programs. Sky Cable ensures that every family’s entertainment needs will be met. available anywhere. information and communication technologies. It expanded Cinema One’s offering with Asian films dubbed in Filipino. The bundle included cable TV. one of the top names in the league. through tent pole events like MYXMo!. Studio 23 was launched to serve the upscale market. It also held the biggest UFC event featuring George St. .top-rated US series like 90210. revitalized its mix with new and more popular titles. In 1996. and teleseryes. 23% of existing subscribers acquired their Digiboxes. It launched Sharon at Home in the Lifestyle Network. Sky Cable Corporation (“Sky Cable”) is the country’s largest cable TV service provider. Foreign shows and movies were also made available on video-on-demand format. Launched in 1996. Hero. Studio 23 began its first broadcast in Mega Manila. an Internet connection subscription that offers speeds of up to 112 mbps. MYX SlamJam and the MYX Music Awards. as well as a la carte programming on top of its three cable TV packages. which resulted in an improvement of 5% in monthly revenues. was incorporated the following year.CPI successfully delivered an enriched cable viewing experience with new features. Star Recording Inc. is the only 24/7 Filipino cable news channel in the country. which drew a record number of viewers. America’s Next Top Model and Keeping Up with the Kardashians. In Cebu. minimized the adverse impact of cable TV pilferage. / ABS-CBN News Channel ABS-CBN News Channel. With pay TV in its infancy in the country during the mid-1990s. anytime. Movies on Demand. Balls! broadcasted the 2010 FIFA World Cup including the exciting and finals match between Spain and the Netherlands. was established in 1995 to address the Company’s growing need for a recording outfit for its multi-talented artists. broadband. In 2010. Inc. segments and milestone live events in 2010. Star Recording. Further. a market clamoring for foreign content. travel and sports programming. Sky Cable’s recent move to digitize its cable services opened new opportunities for programming and pricing flexibility. or more popularly known as ANC. The many combinations of Sky product innovations and pricing schemes being offered to subscribers gave them freedom to choose the package that best suited them. it further reinforced MYX’s hold on the young males and standing as the most-watched music channel Sarimanok News Network. Sky Cable Corporation Founded in 1990. which gave the Filipino home the best combination of entertainment. Lastly. ANC also produces a variety of lifestyle. and at the same time. which featured another facet of the local superstar Sharon Cuneta. beginning 2010. a revolutionary online access to entertainment. Now offering both postpaid and prepaid packages. cornering over half of the total pay TV market. ANC brings the news that matter most to Filipinos around the world. 71% of our total number of subscribers went digital. Pierre. meanwhile. Sky broadband subscribers had the fortune to catch up on missed episodes of their favorite ABS-CBN shows via iWantv in the convenience of their desktops or laptops. In Davao. Inc. Velvet revamped the lineup to be more youth oriented as it aired. The continued move towards digitization and towards an enhanced viewing experience for its customers resulted in the increased rollout of Digiboxes in Metro Manila to 75% of Sky Cable pay-TV subscribers from 52% in 2009. Inc. and Live TV. Sky Cable also launched the Sky Broadband Ultra High Speed. and Internet phone. Besides daily newscasts. iWantv. on the other hand. featured TV on Demand. with ABS-CBN shows. a result of low-priced products we introduced to improve penetration rates. a market that ABS-CBN needed to serve.

post production Music publishing 100. Inc. The driving philosophy underpinning the Company’s business is to be of service to the Filipino people. ABS-CBN’s audience and stakeholders expect and rightly deserve nothing less. Lost. coinciding with ABS-CBN’s 55th year in television. o Bayan Microfinance. was incorporated in 1989 to address the plight of the disadvantaged and to ensure that solicited help are properly allotted and utilized. o Bantay Bata (Child Watch). A national child-caring program that offers a 24/7 hotline. most notable of which is the reforestation and protection of the La Mesa Watershed. AFI has been in the forefront of disaster response. Star Recording. Rescued children are assured of proper nurturing and care through AFI’s Children’s Village. and supplemental feeding. ABS-CBN Foundation. Buffy. Inc.0 . CSI. Since its inception. legal/medical/educational assistance. Studio 23 brought to the Philippines many global programming hits such as Dawson’s Creek. which delivered the latest seasons and episodes of the most popular US series as they are aired in the US) and events that brought large gatherings and impressive participation figures. A pioneer in educational television. 23 November 1995 07 August 1996 100. Inc. It was eventually spun-off as a separate nonstock. It is aimed to rescue children from abusive environments and promote the welfare and rights of children. (AFI). Smallville. Studio 23 has gradually re-focused its programming to capture the elusive urban youth market with programs such as the UAAP and NCAA games and popular US shows. Alias. Star Songs. gimmicks such as the revolutionary FUSE’d (or Fresh US Episodes.0 Roadrunner Network. Bayanijuan was launched in 2008. ABS-CBN’s enviable position of being in media opens up opportunities to render public service.Studio 23 easily became known as the country’s “free cable” channel. AFI has 5 flagship programs: o E-Media. non-profit organization. AFI recognized the need for a holistic approach in providing disaster relief and rehabilitation to victims. Inc. the only remaining patch of forest in the Metro Manila area and a major source of potable water. Survivor. home visits. (Star Records) 03 September 1992 02 February 1995 Print publishing Audio and video production and distribution Services .0 100. among others. the Amazing Race. 2011): COMPANY DATE OF INCORPORATION PRINCIPAL ACTIVITIES OWNERSHIP INTEREST Philippine Subsidiaries and Affiliates (Direct Wholly-Owned and Majority Owned) ABS-CBN Publishing. Over the years. in 2000. typhoons and volcanic eruptions. Bantay Kalikasan promotes the cause of the environment through proper disposal of industrial products such as batteries and the reestablishment of nature havens across the country. Bayan Microfinance was established as a program to provide financial assistance to promising micro-enterprises. AFI saw the need to provide livelihood assistance and opportunities to poor but enterprising countrymen. established in one of the suburbs of Metro Manila. ABS-CBN Bayan Foundation. Inc. and Grey’s Anatomy. non-profit entity. Given the sociopolitical context of the Philippines. a non-stock. o Bantay Kalikasan (Nature Watch). Launched in 1998. o Sagip Kapamilya. ABS-CBN Foundation Inc.0 100. Desperate Housewives. The following table lists down the Company’s active subsidiaries and affiliates (as of December 31. E-Media produces and distributes programming geared toward helping the country’s public schools improve their quality of education. to synergize and fully utilize the different programs of AFI in rebuilding each Filipino community one at a time. Inc. With the Philippines prone to natural calamities such as earthquakes.

0 thru ABS-CBN Interactive. USA 03 January 2002 Cayman Islands Holding company Cable and satellite programming services Telecommunications 100. Inc. Inc. Inc. 70. Inc.0 100. with Branch Offices at the following countries: 1. USA ABS-CBN Telecom North America. Inc. Inc. Inc.0 thru ABS-CBN Publishing. 07 August 2000 Services – money remittance ABS-CBN Multimedia. 25 August 2004 Digital electronic distribution Holding company Telecommunication content Columbus Technologies (CTI) Multi-Media Telephony.0 thru ABS-CBN International 100.0 thru ABS-CBN Global Hungary Kft 100.0 .Sarimanok News Network.0 thru Sapientis 66.0 Creative Programs. ABS-CBN Film Productions. Inc.0 100. ABS-CBN Global Cargo Corporation 23 January 2001 25 March 2003 09 October 2003 Services -restaurant and food Movie production Real estate 100. subsidiary of CTI Culinary Publications.0 ABS-CBN Interactive. 24 October 2000 100.0 04 November 2009 Non-vessel common carrier operations Holding company 100. Inc. ABS-CBN Integrated and Strategic Property Holdings. 100. 2.0 Sapientis Holdings Corporation 29 June 2009 100. 23 June 1998 Content development programming services and 100. The Big Dipper Digital Content & Design. 29 December 2011 29 December 2011 International Subsidiaries ABS-CBN International 22 March 1979 California.interactive media Digital film archiving and central library of content licensing and transmission Content development programming services Content development programming services and 100. Inc. Philippines Taiwan 19 April 1995 California. Inc.0 100. 29 January 1999 30 June 2000 Services . ABS-CBN Global Ltd. Inc.5 thru Sapientis.7 thru Sky Vision Corporation 100. 100. Inc. 24 October 2000 and 100. 17 May 1996 Print publishing E-Money Plus.0 Philippine Subsidiaries and Affiliates (Indirect Wholly-Owned and Majority Owned) Sky Cable Corporation 06 June 1990 Cable television services 56.0 Studio 23. Inc.0 thru ABS-CBN Global Ltd.0 TV Food Chefs. Inc.

Ltd.0 thru ABS-CBN Middle East FZ-LLC 100. Ltd. Ltd.0. 2. 100. Australia 22 March 2006 Japan 08 March 2007 Canada 03 July 2008 Singapore Cable and satellite programming services Cable and satellite programming services Cable and satellite programming services Corporate support and administrative services for various international ABS-CBN subsidiaries and affiliates Holding company 100.0 thru ABS-CBN Global Hungary Kft 100. Italy Spain 08 May 2003 United Kingdom Cable and satellite programming services ABS-CBN Australia Pty. ABS-CBN Canada Remittance Inc. Canada COMPANY Philippine Affiliates Lopez. UAE ABS-CBN Europe Ltd.0 owned by Lopez. cable . Inc.0 thru ABS-CBN International 100.0 ABS-CBN Japan. ABS-CBN Middle East LLC 29 April 2002 Dubai. Inc.V. 18.0 Holding company 100. (with Branch Office in Luxembourg) ABS-CBN Global Netherlands B.0 thru ABS-CBN International 100. thru ABS-CBN Hungary ABS-CBN Global Remittance.0 thru ABS-CBN International 100.0 thru ABS-CBN Europe Ltd. USA 2010 . with Branch Offices at the following countries: 1.0 thru ABS-CBN Global. 18 April 1991 Investing in ventures related to cable television. Inc. ABS-CBN Canada ULC (formerly The Filipino Channel Canada ULC) ABS-CBN Shared Service Center PTE.0 thru ABS-CBN Global. 09 February 2009 Hungary 19 May 2009 Netherlands 18 November 2009 California. 70. Inc.8 owned by ABS-CBN.0 owned by Lopez. Kingdom United 100. First Philippine Corporation Sky Vision Corporation Holdings DATE OF INCORPORATION PRINCIPAL ACTIVITIES OWNERSHIP INTEREST Holding company 30 June 1961 Holding company Parent of ABS-CBN 43. (with Regional Operating Headquarters in the Philippines) ABS-CBN Global Hungary Kft. subsidiary of ABS-CBN Europe 100. Services-money remittance Services-money remittance 2011. Services – money remittance ABS-CBN Europe Remittance Inc.ABS-CBN Middle East FZ-LLC 29 April 2002 Dubai. UAE Cable and satellite programming services Trading 100. 100. Ltd 18 May 2004 Victoria. cable communications.0 .

The major free-to-air broadcasting networks in the country. and their respective performance in National Urban Philippines household ratings and audience share for 2011.systems.5% 0. outdoor advertising and cable television channels.2% 2% 1% . as well as with home video exhibition. are as follows: National Urban Philippines (2011) RTG% ABS-CBN Corporation National Broadcasting Network Associated Broadcasting Company GMA Network Inc. Inc. ABS-CBN Bayan Foundation. ABS-CBN 2 NBN 4 ABC 5 / TV5 GMA 7 10. 07 December2001 7. radio 49.2 owned by Lopez. Inc. Inc. such as radio. Cavite and Bulacan). The Company's television broadcasting networks compete for advertising revenues. 05 July 1989 18 January 2000 24 March 2006 Charitable institution Charitable institution Charitable institution Competition Free-to-Air Television There are currently 11 commercial television stations – those which derive the majority of their revenues from the sale of advertising and airtime – in Mega Manila (which includes Metro Manila and parts of the nearby provinces of Rizal. their corresponding Mega Manila channels.6% 0.1% 3. The Company's television stations also compete with other advertising media. Inc. the acquisition of popular programming and for the services of recognized talent and qualified personnel.1% SHR% 35% * 13% 34% NETWORK CALLSIGN / FREQUENCY GMA NewsTV Intercontinental Broadcasting Corporation IBC 13 0. and film distribution Lopez Holdings Corporation (formerly Benpres Holdings Corporation) Bayan Telecommunications Holdings Corporation AMCARA Broadcasting Network.9% 10. 15 October 1993 Holding company 88. with 7 on VHF and 4 on UHF. the Internet and home computer usage. Laguna.0 12 April 1994 Television and broadcasting Holding company Beyond Cable Holdings. 71 Dreams Foundation. Inc. 08 June 1993 Holding company Inc. 56. Inc.0 Non-Stock Corporations ABS-CBN Foundation. television media and shopping networks. newspapers.3 owned by Lopez. Inc.

9 in the FM band.1% 1. The Company faces competition for distribution of its programming from other producers of Filipino programming. where MPB will manage and operate the channel’s entertainment programming. particularly in Southeast Asia.05% SBN 21 / ETC Studio 23 NET 25 RJTV 29 / 2nd Avenue 0. GMA Network. increasingly. variety shows. runs in the hundreds of thousands of hours combined. movies. acquired a 75% stake in ABC Development Corporation. and the like. a Malaysian company. In October 2009.Southern Broadcasting Network ABS-CBN Broadcasting Corporation Eagle Broadcasting Corporation RJ Broadcasting Corporation *Less than 0. DZMM on the AM band and 101. Mediaquest Holdings Inc.0% * 4% 0% 0% The Company principally competes with 9 commercial free-to-air television stations in Mega Manila. reality shows. Moreover. documentaries. ABS-CBN’s content library of in-house produced drama series. Inc. although there have been plans to privatize RPN 9 and IBC 13.2% 0. (“GMA 7” or “GMA Network”) which owns and operates GMA 7. For such program services. Africa.0% 0. ABS-CBN also competes with other programming providers for channel space and compensation for carriage from cable television operators and other multi-channel distributors.. . China. including the prices charged for the programming and the quality. SBN 21 and RJTV 29. Programming ABS-CBN is a growing supplier of Filipino content for television and cable channels both in the Philippines and. The Company’s radio network competes with other radio broadcasting entities for advertising revenues and for the services of recognized talent and qualified personnel. Competition in acquiring foreign-produced programming and films has also been greater than in the previous years. the Company also has exclusive broadcast licenses for numerous popular foreign-acquired programs and movies. RPN 9 and IBC 13 are owned and operated by the Philippine government. In-house produced content have been and are still currently aired in numerous countries around the world. The three channels are currently airing Solar-produced and acquired programs and use the respective callsigns: Solar TV. Solar Entertainment Corporation. ETC and 2nd Avenue. operator of TV5. such as Manila Broadcasting Company. a unit of the Beneficial Trust Fund of the Philippine Long Distance Telephone Company (PLDT). throughout the world. In August 2008. and Eastern Europe. Bombo Radyo. entered into blocktime agreements with RPN 9. cassette tapes and digital music players. and had a separate agreement to acquire MPB Primedia. a Filipino company primarily in the business of cable programming. competes with over 2 dozen radio stations in each band in Mega Manila. MPB’s Philippine unit. Beginning 2008. NBN 4. distributors select programming based on various considerations. quantity and variety of programming. The Company competes with other Philippine broadcast entities and pan-regional cable programming producers in acquiring broadcast rights to popular foreign TV shows and films. The Company's radio stations also compete with other advertising media and other forms of entertainment. including the channels of its major competitor. and Radio Mindanao Network. including music products such as CDs. The Company’s other regional/provincial radio stations (2 in the AM band and 14 in the FM band) also compete with the regional radio stations of major radio broadcasting companies. Radio The Company’s flagship radio stations. ABC 5 was re-launched as TV5 after it entered into a blocktime agreement with Media Prima Berhad (MPB).

and online games that the Company provides through ABSi. telecommunications companies. published by its subsidiary API. which are essential to the success of a feature film. directly competes for viewer attention and subscriptions with other providers of entertainment.International Cable and Satellite Services The Company's DTH satellite subscription service in the United States presently competes with other satellite television and cable systems. jingles. and for film rights and scripts. Europe. Star Cinema also competes with other forms of entertainment and leisure time activities such as DVDs. or more commonly known as Star Cinema. Cable Programming and Television Operations Sky Cable. the Company faces competition from Internet service providers. its distribution and marketing. through its Sky Cable network. competes for the services of recognized creative talents. The Company also faces direct competition in terms of Filipino programming. Disney. national broadcast networks. Internet and Interactive Services With regard to the mobile VAS products. Dreamworks. churn out more than 50 glossy magazine titles combined each month. online game distributors. digital advertising solutions. Competition for advertising is based on circulation levels. The number of films released by the Company's competitors in any given period may create an oversupply of product in the market. Canada and Japan. Likewise. The Company also competes in the acquisition of the services of artists and other talents. GMA Network has already launched a second international cable channel. broadcast television stations and DTH satellite companies. mobile content providers. including other Filipino studios. AFPI. Success in the Philippine movie business depends on the quality of the film. In 2005. Piracy also takes a considerable chunk of the Company’s earnings potential. The Company likewise competes with other feature film producers. GMA Pinoy TV. . and the public’s response to the movie. compete with other similar service providers and other entertainment means of the Filipino communities in these areas. reader demographics and advertising rates. such as in the Middle East. Film Production and Distribution The production and distribution of feature films is a highly competitive business in the Philippines. and other internet and mobile related content and service providers. musical scores and other musicrelated content with other local and foreign music publishers and independent composers and lyricists. news and information. including other cable television systems. as well as other forms of entertainment. video cassettes and computer games. and Warner Brothers. Philippine-based publishers. GMA Life TV. competes for readership and advertising revenues with other magazines of similar format and with other forms of print and non-print media. Magazine Publishing Each of the Company's glossy magazine publications. Piracy and illegal downloads of the Company’s music content properties also adversely impact the Company’s music production and distribution business. Australia. the Company’s other TFC products in other territories. Music Production and Distribution The Company competes in the production and distribution of songs. both artists and production staff. which may reduce the Company's share of gross box office admissions. and regional and local broadcast stations. such as Summit Media and Mega Magazine and Publications. GMA Network launched its own Filipino cable channel in the United States. smaller independent producers and major foreign studios such as Warner Brothers.

Production and acquisition for cable programs. and video distribution. concessions. ABS-CBN. programs or events produced by third parties are aired through the networks of ABS-CBN and its subsidiaries under blocktime agreements or coverage and broadcast agreements entered into with such third party-producers. Need for any governmental approval of principal products or services . franchises. Authors and Publishers. the quantity. TV. digital music. royalty Republic Act No. Inc. The licenses to distribute the foreign programs and foreign and local feature films grant ABS-CBN and its subsidiaries the right to distribute said programs and films on free TV. 1995. trademarks. also provides programming for 9 cable channels. Inc. Such programs comprise approximately 15% of the programming of ABS-CBN 2. the collecting societies in the Philippines. signal reception. with limited ancillary rights. publishers and recording companies. Important competitive factors include fees charged for basic and premium services. The franchise is for a term of 25 years. Patents. satellite or whatever means including the use of new technologies in television and radio systems.Cable television systems also face strong competition from all media for advertising revenues. manufactures. for the songs and albums it produces. such as ring-tones. quality and variety of the programming offered. Music Licenses ABS-CBN and its subsidiaries enter into agreements for the synchronization and use of music in its films and programs with the composers. and satellite in the Philippines and in territories wherein The Filipino Channel is distributed. through its subsidiaries SNN and CPI. that are downloaded on mobile and online applications. approved on March 30. These licenses for TV rights have an average term of 2 to 3 years. (FILSCAP) and the Music and Video Performance. mechanical and distribution rights agreements with composers. Star Records has various licensing. ABS-CBN also has agreements with the Filipino Society of Composers. ABSi also has such similar agreements for its musical products. cable. The Company also faces competition with other cable channels in terms of cable carriage among the numerous pay TV providers in the country. The existing agreements with FILSCAP and MVP include the subsidiaries of ABS-CBN. and close to 90% for all CPI cable channels collectively. as the case may be. approximately 65% of the content of Studio 23. (MVP). and the effectiveness of marketing efforts. Aside from licenses. in November 2007). Sky Films. are highly competitive. Third Party-Owned foreign and local film and programs aired through the networks ABS-CBN and its subsidiaries have licenses from foreign and local program and feature film owners to distribute the same through its networks. (which was merged into ABS-CBN Film Productions Inc. publishers and recording companies. The licenses for foreign films have an average term of 10 to 15 years. These cable channels compete for viewership with other local cable programmers and pan-regional cable channels. granted the Company the franchise to operate TV and radio broadcasting stations in the Philippines through microwave. licenses. Inc. ABS-CBN is required to secure from the National Telecommunications Commission (NTC) appropriate permits and licenses for its stations and any frequency in the TV or radio spectrum. also have the license to distribute local and foreign feature films in the Philippines for theatrical. customer service. distributes or sells in the local market. Fees for public performance rights of the music in films and programs outside the Philippines are paid to the relevant collecting societies in the territories where the films and programs are exhibited. ABS-CBN and its wholly-owned subsidiary. 7966. for the public performance rights of music contained in such films or programs produced by ABS-CBN. as well as the selling of airtime for advertising.

The NTC also regulates the bandwidth allocation used by the different broadcasting companies through the grant of temporary permits and licenses to operate television and radio stations. it does not have the power to review the acts and resolutions of the NTC. Among its specific functions is the granting of provisional authorities and certificates of public conveniences to own and operate a broadcasting station within the Philippines. the Movie and Television Review and Classification Board (MTRCB). The NTC is the government agency which regulates the broadcasting industry. The 1987 Philippine Constitution provides that “ownership and management of mass media shall be limited to citizens of the Philippines. 2014. a broadcaster must also follow rules and industry standards promulgated by the Kapisanan ng mga Brodkaster sa Pilipinas (KBP). the Company is highly regulated by the Philippine Government.The principal law governing the broadcasting industry is the 1936 Commonwealth Act. Costs and effect of compliance with environmental laws Whenever required. covering the period from August 1. ABS-CBN management recognizes two labor unions. Air Transportation Office. including companies engaged in television and radio broadcasting as well as to prevent excessive competition. the Department of Transportation and Communication (DOTC). As a result. while the CBA for the rank and file employees. allows the Company to engage in the television and radio broadcasting business. Risks Relating to the Company . The MTRCB classifies television programs based on their content. and the Department of Labor and Employment. and other regulatory agencies. for the installation and operation of proposed broadcast stations nationwide. or to corporations. The Supervisory Union represents approximately 6% of the total regular employees of ABS-CBN. The DOTC formulates general and specific policies on the broadcasting industry. No. clearances or exemptions from the Department of Environment and Natural Resources. the Company applies for and secures proper permits. Employees and agreements of labor contracts. including duration The number of employees and talents of ABS-CBN was 3. including the showing of indecent and excessively violent scenes on television. 2010. covering the period December 11. The government departments and agencies that administer the laws governing the broadcasting industry and content are the National Telecommunications Commission (NTC). as amended. The OMB issues permits to television stations or networks engaged in the exhibition and distribution of programs in video format. Article XVI). 2011 to December 10.904 as of December 31. The Company’s Congressional Franchise. The collective bargaining agreement (CBA) for the supervisory union was renewed last August 13. In addition to the restrictions imposed by the government agencies. 2010 until July 31. there were no costs related to the effect of compliance with environmental laws. 146. otherwise known as the Public Service Act. Department of Health. It formulates policies and guidelines for the operations of its members and enforces programming and advertising rules. This Act seeks to protect the public against unreasonable charges and inefficient service by public utilities. one for the supervisory employees and another for the rank and file employees. 2011. while 24% of belong to the Rank & File Union. Although the DOTC exercises supervision and control over the NTC. For the past 3 years. 2013. the Optical Media Board (OMB). renewed in 1995 for a term of 25 years. cooperatives or associations wholly-owned and managed by such citizens” (Section 11. of which the Company is a member. The KBP is a self-regulating trade organization consisting of television and radio operators.

With the Company having made substantial investments in upgrading its production. The ELJCC houses the corporate offices of the Company and its subsidiaries engaged in related businesses. Strategy formulation and decision-making always take into account these potential risks and the Company ensures that it takes all the steps necessary to minimize. ABS-CBN ensures that it has the proper control systems in place. Properties The properties of the Company consist of production. Sy as Chief Risk Management Officer. broadcasting. and Manila Radio groups. ABS-CBN’s Board of Directors and management are mindful of the potential impact of various risks to the Company’s ability to operate a viable business. the advertising industry. reputational. the Board of Directors of the Company approved the appointment of Mr. Star Magic. which currently houses the Company’s TV Production. Also. The broadcast center also houses the Company’s 650-foot transmitter tower and other broadcast facilities and equipment. adopted global best practices. operating.000 square meters. Aside from the corporate offices. the Pinoy Dream Academy performance area. and to the extent possible. the building also has 3 television soundstages. has been particularly sensitive to the general condition of the economy. Also in March 2010. 3 sound recording studios and other television production facilities. The Company’s Technical Operations Center and several studios and soundstages are also located in the main building. the ability of consumers to pay for the Company’s services or goods depends on their disposable income at any given time. financial. Item 2. majority of which are owned by the Company. the Company’s business may be affected by the economic condition of the country and of the territories where it conducts its business. Digital Consumer Devices. Consequently. and other risks. Johnny C. vision and direction for enterprise risk management by establishing and implementing an integrated risk management framework to cover all aspects of risks across the Company’s organization. The Risk Management Committee formed in March 2010 assumes the responsibility of oversight for Enterprise Risk Management. and to collect subscription fees from its subscribers. The building has a gross floor area of approximately 100. to sell various goods and services. which houses several studios and the Company’s talent management group. relative to other industries. The ground floor is leased to various businesses including banks. Local and Regional Properties .000 square meters and total office space of approximately 58. the newest of which is a modern 15-story building known as the Eugenio Lopez Jr. coffee shops and restaurants. to identify and assess. broadcasting and transmission equipment in recent years. retail stores. analyze and mitigate market.The Company’s results of operations may be negatively affected by adverse economic conditions in the Philippines and abroad since its operations depend on its ability to sell airtime for advertising. The Design and Talent Center. most notably the Pinoy Big Brother house. and improve the Company’s risk management readiness. News and Current Affairs. currently used by some of the Company’s divisions. and the JUSMAG compound. transmission and office facilities. Historically. community. Regional Network. which was completed in 1968. The broadcast center also houses the Company’s other buildings and properties: o The main building. Communications Center (ELJCC). such risks. As Chief Risk Management Officer. o ABS-CBN also owns several properties within close proximity to the broadcast center. Esguerra Avenue in Quezon City. Broadcast operations are principally conducted in the 44. taking over from the Audit Committee.000 square meter ABS-CBN Broadcasting Center located at Sgt. reporting directly to the Board of Directors. if not eliminate. the Company does not anticipate any major increase in capital expenditures for the acquisition or the development of any property in the near future. concurrent with his responsibilities as Head. regulatory. The broadcast center is comprised of several buildings. he will provide the overall leadership. the Pinoy Dream Academy dormitory.

Catanduanes Masbate. Ilocos Sur Bulua. Negros Occ. Isabela Tuguegarao. Bukidnon Shrine Hills. Originating stations have the capacity to produce and broadcast their own programs and to air advertising locally. Pagadian City Surigao City Jolo. Mt. QC Mt. *owned by Amcara. The following table sets forth the location and use of ABS-CBN’s television and radio stations as of December 31. Western Samar Puerto Princesa. Guimaras Mt. ** Affiliate UHF TV STATIONS STATION CH LOCATION (Transmitter Site) CH 9 12 10 10 7 LOCATION (Transmitter Site) Mt. Relay stations can only re-transmit broadcasts from originating stations. Affiliate stations are not owned by the Company. Murcia. Corp..ABS-CBN also owns real estate properties in various parts of the country. Jude Thaddeus Inst. of Tech** 36 Sulu Tawi-Tawi Broadcasting Corporation** 37 Calbayog Comm. Benguet Iligan City Butuan City San Nicolas. Sulu Calbayog City. Santos City Zamboanga City Naga City Mt. Ignacia St. Corp. Zambales Tabaco. Cebu City Mt. Tomas. Cagayan de Oro San Jose.** MIT-RTVN** CH 2 3 4 2 4 3 3 11 2 12 2 3 5 3 4 11 7 4 12 10 10 9 11 13 10 7 9 11 4 11 7 10 7 LOCATION (Transmitter Site) Mo. Rather. Sorsogon Kalibo. Matina. Olongapo City Jordan. Co. Batangas Jagna. Bukidnon Davao General Santos Zamboanga Naga Tacloban Dumaguete Isabela Tuguegarao Cotabato Baguio Iligan Butuan Ilocos Norte Legaspi Olongapo Iloilo* Batangas Bohol Mt. Santiago City. Tacloban City Valencia. Legaspi Upper Mabayuan. Bariw. Palpalan. Cagayan Cotabato City Mt. Negros Or. Masbate Ozamis City VHF TV STATIONS STATION 34 MIT-RTVN** 35 St. Busay. Mt. Amuyao. Davao City Brgy. 2011: VHF TV STATIONS STATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Manila Cebu Bacolod Mt. Naga-naga. Diliman. Bohol Mt. Bctg. Lagao. Aklan Bantay. Occidental Mindoro Virac. Palawan . Province Botolan. Kitanglad. Province Zambales Albay Sorsogon Aklan Ilocos Sur Cagayan de Oro Occidental Mindoro Catanduanes Masbate Comm. they are typically independently owned by local Filipino business people and are contracted to re-broadcast the Company’s originating signals during specified time blocks for negotiated fixed fees. Bctg. Banoy. Albay Sorsogon. Sto. 38 Palawan Bctg. Kanlandog. Ilocos Norte Mt. Kitanglad. Gen.

Iloilo City* 11 Zamboanga**** 23 Zamboanga City* 12 Gen. Cotabato 26 Pagadian*** 24 Pagadian City 27 Palawan**** 23 P. S. Quezon 35 Lipa City **** 38 Lipa City. Palimpinon. Benguet* 5 Naga**** 24 Naga City* 6 Batangas**** 36 Mt. Batangas* 7 Baguio** 32 Mt. Bariw.****owned by Amcara FM RADIO STATIONS STATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Manila Cebu Bacolod Davao Baguio Legaspi Naga Laoag Dagupan Iloilo Tacloban Cagayan De Oro Cotabato Gen.9 93. Valencia.1 101. Kanlandog. Santos**** 36 General Santos City* 13 Tacloban*** 24 Mt. Cebu City Mt. Bulacan 38 San Fernando. Princesa. Pampanga** 46 San Fernando. Cotabato 20 Rizal*** 40 Jala-Jala.5 101.3 91. Negros Occ. Cagayan de Oro City Cotabato City Lagao. Sto.9 95. Laguna 40 Cabanatuan** 30 Cabanatuan. Santos FREQ (MHz) 101.1 Manila** 23 Metro Manila 2 Cebu**** 23 Mt. Palawan 28 Surigao*** 23 Surigao City 29 Roxas City**** 21 Roxas City 30 Baler**** 22 Baler.1 92. Davao City* 4 Dagupan**** 30 Sto. Tomas (Baguio)* 8 Laoag**** 23 San Nicolas.3 91. Camarines Norte 32 Kalibo**** 23 Aklan 33 Dipolog**** 42 Dipolog City 34 Lucena City**** 24 Lucena City. Sto. Murcia. Antipolo City Mt.7 CALL SIGN DWRR DYLS DYOO DXRR DZRR DWRD DWAC DWEL DWEC DYMC DYTC DXEC DXPS DXBC LOCATION Lopez Center. Rizal 21 Legaspi*** 23 Legaspi City 22 Olongapo**** 24 Olongapo City* 23 Iligan **** 26 Iligan City* 24 Butuan*** 22 Butuan City 25 Cotabato*** 23 N. **owned by ABS-CBN. Ilocos Sur * co-located with VHF TV Stations .*** with pending application with the NTC. Banoy. Naga-Naga.9 97. Matina. Santos City .1 103. Laoag* 9 Bacolod**** 22 Bacolod City* 10 Iloilo** 38 La Paz. Tomas.5 94. Busay. Ilocos Norte Dagupan City Iloilo City Tacloban City Bulua.1 94. Negros Oriental* 16 Botolan**** 23 Botolan. Bohol 19 Marbel. Koronadal**** 24 Marbel. Busay. Aurora 31 Camarines Norte**** 23 Daet.1 93. Nueva Ecija 41 Ilocos Sur** 34 Bantay. Zambales* 17 Isabela **** 23 Santiago City* 18 Bohol*** 40 Jagna. Shrine Hill. Pampanga 39 San Pablo** 46 San Pablo. Legaspi Naga City San Nicolas. Benguet Mt. Cebu City* 3 Davao**** 21 Matina Hills.5 95. Tacloban 14 Cagayan De Oro**** 23 Cagayan de Oro City* 15 Dumaguete**** 24 Mt. Tomas. Davao City Mt. Batangas 36 Tarlac** 34 Tarlac City 37 San Miguel** 34 San Miguel. Gen.

in connection with the same events covered by the case against AGB Nielsen. The trial court dismissed the complaint. Inc. Ma. . et al" The Company also has a pending civil case for libel against it filed by GMA Network. the following legal proceedings involving the Company were the subject of news reports. and therefore generated public interest but Management is nevertheless of the opinion that should there be any adverse judgment based on these claims. The case was docketed as Q-07-61665 and was raffled before the Regional Trial Court of Quezon City. before the Regional Trial Court of Pasig. ABS-CBN Broadcasting Corporation. GMA's total claim against the Company is Fifteen Million Pesos (P15. Santos-Concio and Ms. Ma. GMA has completed presentation of its evidence and the admission of its documentary evidence is pending resolution with the trial court. exclusive of interest and cost.00). docketed as Criminal Case No. but the case remains pending as regards certain other officers of the Company. Vidanes. Davao City Puerto Princesa Item 3. Bulacan Pardo. Ms.000. Branch 80. Rosario Santos-Concio and then Managing Director for TV Production. The case was filed in 03 January 2008 and docketed as Q-08-61735.” The Company has a pending case against AGB Nielsen for injunction and breach of contract in connection with the alleged infiltration of panel homes in various areas in the country.000.7 99. Inc. et al. is pending before the Regional Trial Court of Quezon City. arose from the incident that transpired during the anniversary celebration of Wowowee. this will not materially affect the Company’s financial position and results of operations: “ABS-CBN Broadcasting Corporation vs.15 16 Zamboanga Palawan 98. “People of the Phils.” This case. where a stampede resulted in the deaths of 71 people and multiple injuries to about 200 others. Legal Proceedings For the past 5 years. vs. the Company is not a party in any legal proceedings which involves a claim for damages in an amount. The Company appealed from the dismissal of the complaint by filing a petition for certiorari with the Court of Appeals and the petition is pending. 138027. Santos-Concio. The Court also ordered the Department of Justice to complete the preliminary investigation on the possible liability of local government officials of the City of Pasig and the police and suspended the proceedings pending the completion of the investigation. Complaints for reckless imprudence resulting in multiple homicide and multiple physical injuries were filed against certain officers of the Company including its President and Chief Operating Officer. Cebu City Matina. Ms. The Court has dismissed the complaint as against accused Ms. Vidanes. Branch 261. While not deemed material legal proceedings based on the amount of the claims involved. exceeding 10% of the current assets of the Company. Socorro V.9 DXFH DYCU Zamboanga City Puerto Princesa AM RADIO STATIONS STATION 1 2 3 4 Manila Cebu Davao Palawan FREQ (MHz) 630 1512 1296 765 CALL SIGN DZMM DYAB DXAB DYAP LOCATION Obando. “GMA Network.. AGB Nielsen Media Research (Philippines). vs. Inc. Branch 76.

Unknown to the accused. for the production and airing of “Willing Willie”.. “Wilfredo Revillame vs. Branch 84.”. Atty. docketed as CA-GR Sp. The case was docketed as Civil Case No. The mediation conference has been terminated and pre-trial is set on 9 May 2012. The Court of Appeals granted the petition.” docketed as CA-GR Sp. The Court denied the motion to dismiss and quash Information and ordered the arraignment of the remaining accused.500. Upon the inhibition of the presiding judge of Branch 84.00). The petition remains pending. When the Court denied defendants’ Motion to Defer Proceedings. Wilproductions. . Makati. ABS-CBN Broadcasting Corporation“ This is a civil action for rescission of contract and damages filed by Wilfredo Revillame against the Company in connection with the former's talent contract with the Company. No. the case was re-raffled to and is now pending with Branch 217. and damages. which it created. ABC Development Corporation and Ray Espinosa in his capacity as President of ABC” This is a complaint for copyright infringement filed by the Company against Revillame. produced and broadcast. ABS-CBN Corporation vs. Willie Revillame. 120337. and dismissed the suit copyright infringement case on the ground of forum-shopping. “ABS-CBN Corporation vs. the accused filed a Motion for Reconsideration of the denial of the motions to dismiss and quash Information and Reinvestigation on the ground that they were not given a chance to participate in the preliminary investigation against the local government officials of the City of Pasig. Reynaldo Fong and other John and/or Jane Does. Wilfredo Revillame aka Willie Revillame. The Company filed a counterclaim for breach of contract. Branch 66. et al. The motion is still pending.400. they filed a petition for Certiorari before the Court of Appeals. The Company has filed a Motion for Reconsideration which remains pending.000. The Motion for Reconsideration was denied. In the meantime. et al. The accused also filed a Motion to Inhibit the presiding judge and Motion for Partial Reconsideration regarding the denial of the Motion for Reinvestigation. The Accused filed a petition for certiorari with the Court of Appeals to appeal the denial of the Motions to Dismiss and Quash Information..Due to the failure to promptly conduct the preliminary investigation. Romeo Monfort. in violation of the Company’s copyright over the show “Wowowee”. Suarez.000. Wilproductions. injunction. The Company is asking for One Hundred Two Million Four Hundred Thousand Pesos (P102. the Department of Justice has since conducted a preliminary investigation against the local government officials of the City of Pasig and dismissed the charges against them.00) as actual and compensatory damages and other consequential damages. Revillame filed a Motion to Dismiss on the ground that the Company is guilty of forum-shopping. They refused to enter any plea and the Court entered a plea of not guilty for them. Villarosa and ABS-CBN Corporation. The case was docketed as Civil Case No. 117063. vs. The accused were arraigned on 29 June 2011. entitled “ABC Development Corporation and Ray Espinosa vs. ABC Development Corporation and Ray Espinosa. the accused filed the Omnibus Motion for the dismissal of case for violation of their right to speedy disposition of cases and to quash the Information because the facts charged do not constitute an offense. No. the mediation conference was conducted and a settlement was reached with twelve (12) private complainants. The petition is entitled “Almaden. Q-10-67770 and original raffled to Regional Trial Court. 10-1155 and is pending with the Regional Trial Court.. However. Revillame's total claim against the Company is Eleven Million Five Hundred Thousand Pesos (P11. Inc.

2009 March 11. 2004 April 20. Item 4. 2004 March 28. Stock Dividend (Per Share) No stock dividend since 1996 Cash Dividend (Per Share) Amount (in Pesos) Php0. Under said loan agreements. This case was filed with the Office of the City Prosecutor of Quezon City and was docketed as XV-03-INV-11I-07-532 The suit was dismissed. and (e) the total amount of the cash dividends does not exceed 50% of the Company’s net income after taxes for the fiscal year preceding the declaration. 2007 March 26. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. G (16)-09314/NSMKT2 which Revillame submitted in the trial court. (b) all financial covenants set forth therein are satisfied. 2001 August 10. 2007 April 30. 2008 May 29.45 Php0. 2012 . Dividends The declaration and payment of dividends are subject to certain conditions under the Company’s existing long term loan agreements with various banks and other lenders (see Note 19 of the accompanying notes to the Company’s audited consolidated financial statements). (c) certain financial ratios are met and such payment will not result in the violation of the required financial ratios under the loan agreements. 2010 April 19. 2004 May 15. 2011 April 25. 2012 Payment Date May 25. 2008 May 5.This is a suit for use of a falsified document in a judicial proceeding and falsification of AIPC Bond No. 2012 Record Date April 25. 2011 March 30. The common shares (PSE: ABS) closed at Php37. 2001 July 21.OPERATIONAL AND FINANCIAL INFORMATION Item 5. 2008 March 25.64 Php0.80 Declaration Date March 28.10 Php0. 2007 May 27.30 on March 30. Common shares may be exchanged for PDRs and vice versa.11 Php2. 2010 March 25. Market for Issuer’s Common Equity and Related Stockholder Matters The Company’s common shares have been listed on the Philippine Stock Exchange (PSE) since 1992.90 Php1.60 Php0. 2011 May 22. PART II .75 while the PDRs (PSE: ABSP) closed at Php38. the Company may declare and pay dividends provided: (a) all payments (including pre-payments) due on said loan and premiums on insurance of assets are current and updated.825 Php0. The Company has appealed the dismissal of the suit with the Department of Justice. 2012. (d) no event of default as provided in the loan agreements shall exist or occur as a result of such payment. 2009 April 29. 2009 March 31. 2010 March 4. Its Philippine Depositary Receipts (PDRs) were listed in 1999. 2001 July 24.

607 312.000 168. Sub-total Top 20 Stockholders Others Total Stockholders Name Citizenship Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino Record / Beneficial Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record Record No.05% 0.584.062.High and Low Share Prices ABS High 2012 First Quarter 2011 First Quarter Second Quarter Third Quarter Fourth Quarter 2010 First Quarter Second Quarter Third Quarter Fourth Quarter ABSP High Low Low 37.00 44. 2012. Top 20 Stockholders as of March 31.05% 0.03% 0. 2011 was 6.250 162.08% 1. Inc.10% 0.00 High 31.75 47.700 129. Ching Phil.03% 0.000 247.00 38.486 386.000 764.00 40. Garcia La Suerte Cigar & Cigarette Factory Alberto G.500 780.08% 0.50 38.50 38.614.00 41. Corporation Antonino T.50 40.92% 100.50 56.02% 0.000 337.50 34.820 859.04% 0.11% 0.584.50 56.207 205.24% 40.50 40. Aquino &/Or Evelina S.08% 0. Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Lopez.02% 0. Lopez Majograjo Dev.02% 0. Mendoza &/Or Jeanie Mendoza Mimi Chua Manuel M. Aquino Leoncio N.00% .50 High 30. Cheng Cynthia D.50 29. Communication Satellite Corporation Tiong Keng Ching ACRIS Corporation Federico M. the Top 20 stockholders of ABS-CBN own an aggregate of 764.970.50 45. 2011 were 779.190 417. Chungunco Jr. of Shares 446.602.00 28.231.50 42.02% 0.346 226.470 126.04% 0.480.04% 0.00 The number of shareholders of record as of December 31. Inc.186 140.03% 0.02% 98.500 252.90 44.00 40.500 325.185 779.00 36.02% 0. 2012 As of March 31.00 30.270 340. PCD Nominee Corporation (Filipino) Ching Tiong Keng Abs-Cbn Foundation.00 56.60 Low 25.417 or 98. Eugenio Lopez III Creme Investment Corporation Fg Holdings Charlotte C.417 14.03% 0.390 146.995 651.50 Low 26.90 28.08% of outstanding common shares.00 56.614. Common shares outstanding as of December 31.50 43.30 47.00 29.90 44.602 Percentage 57.

Representatives of SGV & Co. Cerrado as the engagement partner.891. the external auditors are discussed in Section 7 of the Company’s Manual of Corporate Governance filed with the Commission on September 2.255. . for the current year and for the most recently completed fiscal year are expected to be present at the Annual Stockholders’ Meeting.080.). Velayo & Company (SGV & Co. Item 6.Employee Stock Option Plan The Company had an employee stock option plan (ESOP) which covered 1. The aggregate fees billed to ABS-CBN and its subsidiaries for each of the last 2 fiscal years for professional services rendered by the external auditor are as follows: 2011 Audit Fees Non-Audit Fees 23. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.605 12.403. Information on Independent Accountant and other Related Matters The principal accountants and external auditors of the Company is the accounting firm of SyCip.500 shares at 95% of offer price during the initial public offering. In 2002. 2011. all the shares acquired by the Company covering this ESOP.877.764 The audit committee’s approval policies and procedures for the above services from SGV & Co. Shares offered under the Plan have been fully paid and issued since 1995. Management’s Discussion and Analysis or Plan of Operation The Management Discussion and Analysis of Financial Condition and the Results of Operation for the past three fiscal years are attached hereto as Annex A. On March 29. The audit committee pre-approves all audit and non-audit services as these are proposed or endorsed before these services are performed by our independent auditor. the Board of Directors approved another ESOP covering 6.306 shares. 2002. has been the Company’s Independent Public Accountants for the last 5 years. there are no more outstanding ESOP.605 4.. with Mr. There was no event in the past 5 years where SGV & Co.862 2010 21. is being recommended for re-election at the scheduled Annual Stockholders’ Meeting on June 21. Aldrin M. Collections were made in 48 semi-monthly installments without interest through payroll deductions. and the Company had any disagreement with regard to any matter relating to accounting principles or practices. SGV & Co. were exercised by the employees. 2012. The Company has engaged SGV & Co. financial statement disclosure or auditing scope or procedure..647. for the audit of the Company’s books in 2010. The accounting firm of SGV & Co. Gorres. As of December 31. 2000.

turned over the reins of the company to the younger Mr. Jr. through its Chairman. Director of Sky Vision Corporation. Mr.. 2012: Eugenio L. Mr. Financial Statements The Statement of Management’s Responsibility for Financial Statements prepared in accordance with SRC Rule 68 as amended. Item 8. The following directors have held their current positions in their respective companies for more than 5 years unless otherwise indicated. who had been President since 1993 and Director since 1986. Lopez. The nominees will serve as directors of the Company for one year from date of election. They were formally nominated by a shareholder of the Company. The Company has adopted the SRC Rule 38 (Requirements on Nomination and Election of Independent Directors) and compliance therewith has been made. Lopez Presentacion L. is attached hereto as Annex B. Lopez Manuel M. Below is a summary of the nominees’ qualifications: Eugenio L. Lopez Salvador G. Directors and Executive Officers of the Issuer Board of Directors The following are expected to be nominated as members of the Board of Directors for the ensuing year during the Company’s Annual Stockholders’ Meeting on June 21. 11 is also included in Annex B. The Schedule for Determination of Retained Earnings available for Dividend Declaration prepared in accordance SEC Memorandum Circular No. He has a .1. Mendoza (Independent Director) Javier J. Psinakis Federico R. He was recently elected as a Director of First Gen Corporation. Lopez III graduated with a Bachelor of Arts degree in Political Science from Bowdoin College. Lopez III. Lopez III also serves as Vice Chairman of Bayan Telecommunications. He is also the Chairman and CEO of the Lopez Communications Group (CommGroup).Item 7. Rosario Santos-Concio Oscar M. 2011 prepared in accordance with SRC Rule 68. together with BayanTel and SkyCable. Lopez. and Director/Treasurer of Lopez Holdings Corporation. Calero (Independent Director) All of the above nominees are incumbent directors. Lopez III Augusto Almeda-Lopez Ma. Lopez III formed in 1997 to oversee the development and implementation of convergence projects for ABS-CBN. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in and disagreements with accountants on accounting and financial disclosure during the two most recent fiscal years or subsequent interim period. as amended and Rule 68. Lopez III was elected Chairman of the Company’s Board of Directors in 1997 when his father. Lopez Inc. Garcia Justice Vicente V. PART III . Oscar M. Filipino. Also in Annex B are the Company’s Audited Financial Statements as of December 31. age 60 Chairman of the Board of Directors and Chief Executive Officer Mr. Tirona Federico M. Mr. the management committee that Mr.CONTROL AND COMPENSATION INFORMATION Item 9. He joined the Company in 1986 as Finance Director before he became General Manager in 1988.. the late Eugenio “Geny” Lopez.

Lopez III is a recipient of various Philippine broadcasting industry awards. Mr. Santos-Concio hosts ABS-CBN Channel 2’s longest-running drama anthology Maalaala Mo Kaya. Mr. Psinakis.Masters degree in Business Administration from Harvard Business School. Santos-Concio also completed the Advanced Management Program at Harvard Business School in 2007. Itim. Lopez. First Philippine Solar Corporation. cum laude in 1951. Energy Development Corporation. Almeda-Lopez is also the Vice-Chairman of First Philippine Holdings Corporation. ADTEL Inc. Rosario Santos-Concio. and is the recipient of many cinema and broadcast industry-related awards over the years. Bayan Telecommunications Inc. First Gen Renewables Inc. He also serves as Chairman Emeritus and Chief Strategic Officer of the First Philippine Holdings Corporation (FPHC). He is also the Chairman and Chief Executive Officer of First Gen and Energy Development Corporation. Ms. Sales. Oscar M. and Sky Vision Corporation. and First Philippine Industrial Corporation. He is an alumnus of De La Salle College and Ateneo de Manila. including toll road construction. Ms. and Production. First Gen Hydro Power Corporation. He is also Vice Chairman of Rockwell Land.. and service industries.. He is Chairman and Chief Executive Officer of First Philippine Holdings Corporation. and electronics manufacturing. Inc. She is a member of the Board of Trustees of the Eugenio Lopez Foundation. Paul’s College in Manila with a Communications Arts degree. Lopez. age 51 Board Member Mr. she leads the Executive Committee and all subsidiary and division heads report to her. President and Chief Executive Officer of FG Luzon. Inc. Ms. Scholastica's College. age 77 Board Member Ms. Lopez is a Director of the Company since 1999. Ms. He has served as Vice Chairman of the Company since 1989. Filipino. Ms. Presentacion L. Psinakis is the founder and President of Griffin Sierra Travel. and also serves as director of the following companies: Lopez Inc. and Bauang Private Power Corporation. He also serves as the Chairman of ACRIS Corporation and ADTEL. age 82 Board Member Mr. Filipino. the institution where he also earned his Bachelor of Arts degree. Regal Films and Vision Exponents. Federico R. Santos-Concio began her career in the Company as a Television Production Consultant in 1987 after working as a line producer for BanCom. Ma. annual programming strategy and customer development targets of the Company. Lopez has led FPHC’s efforts in other businesses aside from energy and power. Lopez has served as Director of ABS-CBN since 1966. Mr. Lopez is the Chairman of First Philec. Augusto Almeda-Lopez. She was also in charge of achieving profit margins. Mr. while he serves as a Director of various companies in the telecommunications. Inc. She is also known as an award-winning actress and an accomplished film and TV producer. namely First Philippine Industrial Corporation. is a graduate of the University of the Philippines College of Law class 1952 and he finished an Advanced Management Program course at Harvard University in 1969. Vanguard Films. FG Bukidnon Power Corporation. manufacturing. First Gen and Energy Development Corporation. President and Chief Operating Officer Ms. Australia for her work in the film. Ms. He also serves as director. Filipino. Filipino. First Private Power Corporation. industrial park and real estate development. and Philippine Commercial Capital Inc. Filipino.. Oscar M. As President and COO.. First Electro Dynamics Corporation. Mr. Santos-Concio graduated cum laude from St. Audiovision. Benpres Insurance Agency. age 57 Board Member. Almeda-Lopez joined ABS-CBN in 1962. age 84 Vice-Chairman Mr. nationwide ratings. Santos-Concio was Head of Channel 2 Mega Manila Management prior to her appointment as President and Chief Operating Officer where she brought greater synergy between Marketing. Psinakis has served as a Director of the Company since 1988. She took a Bachelor of Arts course in St. Lopez has a Masters degree in Public Administration from the Littauer School of Public Administration in Harvard University (1955). First Gen Geothermal Power Corporation. He is Chairman of First Philippine Industrial Park and First Sumiden Circuits. Philippine Electric Corporation. He is a member of the boards of First Philippine Holdings Corporation. Santos-Concio was hailed as Best Actress in the 1978 Asian Film Festival in Sydney. First Balflour. Inc. First Gen . Onscreen. and Chairman Emeritus of Lopez Holdings Corporation . She also worked as a Film Production Manager for the Experimental Cinema of the Philippines.

AlliedGen. He initially joined as the company’s Chief Finance Officer (CFO) in September 2005 and held this position until his appointment in his current position in 2010. age 57 Board Member Mr. Justice Vicente V. Lopez. Prime Terracota. He is the Vice Chairman of FPHC and is a director of among others. He has also been senior adviser for the International Foundation for Elections Systems since 1999. He is a fellow of the Australian Institute of Company Directors and the Institute of Corporate Directors. Calero.. He was chairman of Zenith Optemedia . age 69 Board Member Mr. he played a critical and strategic role as CFO of Maynilad Water Services. He was Chief Executive Officer of Meralco from July 2001 to June 2010. Mendoza. Tirona is the President and Chief Operating Officer of Lopez Holdings Corporation. First Gen Visayas Energy Inc.P. He attended the five-day Professional Directors' Program of the Institute of Corporate Directors. Garcia. he was Executive Vice President of GMA Network. effective effective July 28. Prior to his appointment as President. Before rejoining the Company in 1987. Tirona. Jr. He also taught political review and gave bar review classes at the University of the Philippines College of Law from 1978 to 1993. Javier J. FGLand. Filipino. age 75 Independent Director Mr. Federico M. Bayan Telecommunications . Calero is the Chairman of the Full Circle . particularly in implementing its rehabilitation plan. He attended the two-day Briefing on Corporate Good Governance Risk Management of the Knowledge Institute of SGV & Co. He is currently a director of Philam Asset Management. Angel Ong effective July 28. He also worked as a TV Sales Executive with ABSCBN in 1966 until Martial Law. FNPC. age 67 Board Member Mr. Inc. Inc. He is the chairman of Meralco . Tirona replaced Mr. Walter Thompson Company from 1958 to 2000 and became its Chairman and Chief Executive Officer in 1992. Rockwell Land. First Gen Premiere Energy Corporation. replaced Mr. He holds a Bachelor degree in Economics from the University of Ateneo de Manila and a Master of Business Administration from the same university. Lopez. First Gen Northern Energy Corporation. He was also an Associate Justice of the Court of Appeals from 1980 to 1993 and its Presiding Justice in 1994. Mr. Garcia was Executive Vice President and General Manager of ABS-CBN. Mr. He is a holder of a Bachelor of Science degree in Business Administration and attended the Program for Management Development at the Harvard Business School. managing its marketing and programming activities. Filipino. He has been with the said company since June 2004. He was connected with J. a member of the Publicis Group of Companies from November 2003 to 2005. In 2003. Garcia is a recipient of various Philippine broadcasting industry awards. of Lopez. a public relations company. He attended the . Salvador G. First Gen Prime Energy Corporation. Lopez is the Philippine Ambassador to Japan. and FGPipeline. Manuel M. Mr. He was conferred an LL. Unified Holdings Corporation. He was formerly a director and the CFO of Bayan. Lopez graduated from the University of Pennsylvania with a Bachelor of Arts degree in Economics and International Relations.Visayas Hydro Power Corporation. He obtained his Bachelor of Science degree in Commerce from De La Salle College in 1960. Mr. SkyCable and INDRA Philippines. Mr.. M. degree by Yale Law School in 1971 and was a visiting scholar at the Harvard Law School in the fall term in 1976. Mr. Lopez is the Chairman and Chief Executive Officer of Lopez Holdings Corporation. 2010. He is also President of First Philippine Conservation Inc. He was an Assistant Solicitor General from 1973 to 1980. age 79 Independent Director Justice Mendoza was an Associate Justice of the Supreme Court from 1994 to 2002. Inc. Garcia was President of ABS-CBN from 1998 to 2003. Lopez. Red Vulcan. Filipino. FGPC. First Gen Mindanao Hydro Power Corporation. FGHC. He has authored several law books and has written several articles published in law journals. Manuel L. Manuel M. 2010. cum laude in 1983. He attended the College of Business Administration at the University of the Philippines.College of Law in 1957 and was admitted to the Philippine Bar in 1958.. First Gen Energy Solutions Inc. FGP. He graduated from the U.

and was Finance Manager at the National Marine Corporation. Vidanes held the position of Managing Director for ABS-CBN TV Production from 2001 to 2008. Calero do not possess any of the disqualifications enumerated under Section II (5) of the Code of Corporate Governance and Section II (D) of SEC Memorandum Circular No. production and management of all TV Entertainment programs on ABS-CBN Channel 2. He also served as Sky Cable Regional Director for Visayas and Mindanao and later became Managing Director of Pilipino Cable Corporation. probity and assiduousness. Executive / Corporate Officers Rolando P. Ms. materially interfere with their exercise of independent judgment in carrying out their responsibilities as directors of the Company. he was Head of the Regional Network Group (RNG) of ABS-CBN since 2001. Tan was Head of TV Entertainment Production Development and Control of ABS-CBN. Vidanes obtained her degree of Bachelor of Arts in Communication Arts from the Ateneo de Manila University. She was responsible for the conceptualization. Florida C. whether by themselves or with other persons or through a firm of which they are partners or companies of which they are directors or substantial shareholders. Prior to her appointment. either personally or through their firms. or any of its related companies or any of its substantial shareholders. he made a mark by establishing focus on ratings and revenues. Filipino. Tan is a respected television veteran. Channel 2 Mega Manila Management Prior to her appointment as Head of Channel 2 Mega Manila in 2009. are college graduates and possess integrity. Socorro V. age 52 Chief Finance Officer Mr. Justice Mendoza. Justice Vicente V. Series of 2002. and Mr. comedy and drama. Tan. Independent Directors of the Board The Company’s Independent Directors. are independent of management and free from any business or other relationship which could. or could reasonably be perceived to. They are persons who. Mendoza and Mr. ABS-CBN TV Entertainment Production Ms. She began her career as a . (iii) are not acting as nominees or representatives of a substantial shareholder of the Company. Tan was appointed Managing Director of ABS-CBN TV Entertainment Production in 2009. Filipino. (iv) have not been employed in any executive capacity by the Company. any of its related companies or any of its substantial shareholders within the last two (2) years. He also institutionalized specific strategies to further strengthen local programming and ABS-CBN affinity with the local communities and improved operating efficiencies. Javier J. Calero: (i) are not directors or officers or substantial stockholders of the Company or its related companies or any of its substantial shareholders (other than as independent directors of any of the foregoing). variety. Valdueza. Vidanes. Mr. age 52 Managing Director. 16. Ms. Prior to his appointment as CFO. or any of its related companies or by any of its substantial shareholders within the last two (2) years. Before joining the Company in 1988 as Budget Officer.Harvard Business School Advance Management Program and is a candidate for a Masters of Business Economics Degree from the Center of Research and Communications. Valdueza was appointed Chief Finance Officer in 2008. with over 25 years of television production experience. Specifically. Justice Mendoza and Mr. he was an auditor with SGV & Co. apart from their fees as directors of the Company. age 50 Head. (v) are not retained as professional advisers by the Company. Ms. Filipino. She is responsible for the operations of all business units under TV Entertainment Production. officer or substantial shareholder of the Company. and (vii) do not own more than two percent of the shares of the Company and/or its related companies or any of its substantial shareholders. reality. As Head of RNG. game. Ma. (vi) have not engaged and do not engage in any transaction with the Company or with any of its related companies or with any of its substantial shareholders. other than transactions which are conducted at arms length and are immaterial. Valdueza took up BS Accounting at University of the East and graduated magna cum laude in 1981. Ms. She has been with ABS-CBN since 1986. (ii) are not relatives of any director. or any of its related companies or any of its substantial shareholders. starting as an Associate Producer and has since then been involved in the production of all types of programs – talk shows. Calero have at least one (1) share of the stock of the Company in their respective names.

He is a Famas Hall of Fame Awardee for winning 5 technical awards for Film Visual Effects. He was one of the first Sales Heads who was able to use his media/advertising background to successfully blend “science” with the selling skills of both teams. Since then.. Nepomuceno has worked in a broad range of . at the same time. Benitez joined the Company in 2006 as the Company’s Head of Channel 2 Sales. Analog and Digital Transmission. Bulaong. He was also formerly President and CEO of Zenith Optimedia. Jose Agustin C. Filipino. and President and CEO of Optimum Media. Musngi. His responsibility covers production. Under his leadership. Channel 2 Sales Mr. Bulaong heads the Technical Operations Division of ABS-CBN. age 46 Head. During his successful tenure in RNG Radio. Bennett was appointed Head of the Regional Network Group (RNG) in 2009. Filipino. 1 or No. He was formerly Sales Head of ABC Channel 5 and of GMA Channel 7. animation. He finished his MBA at the Ateneo de Manila University. Nepomuceno’s career spans close to 30 years in the field of human resources and organizational development with stints in brand management and sales. director. Bennett. age 47 Managing Director. age 53 Chief Human Resources and Organizational Development and Learning Officer Mr. Mr. He also became Managing Director of ABS-CBN News Channel from 2004 to 2005. He provides sales solutions to clients from a broad range of traditional and non-traditional media products. floor director. and Jollibee Foods Corporation. 2. He worked as a disc jockey in various radio stations for more than 15 years. where he was mainly responsible for winning the Smart AOR business. where he provided leadership to a media department that handled diverse clients such as San Miguel Corporation. vice president at SkyCable from 1997 to 1998. executive producer. Musngi graduated with a Business Administration degree from University of the East. and was instrumental in developing the Sales Units of both companies. Bennett realized breakthroughs in ratings wherein most of our AM and FM stations became No. distribution. Before joining ABS-CBN. Musngi started his media career as a staff announcer for DZYK-FM. Filipino. Mr. Procter & Gamble Distributing Philippines Inc. Benitez. Here he won for the agency the first-ever Agency of Record (AOR) assignment of P&G. writer.. Mr. a post-production facility for TV Commercials and Films. production chief – for Channel 13. Filipino. age 53 Head. bring in revenues to the Company. Before becoming involved in Broadcast Sales. He became station manager of DZMM and DWRR from 1988 to 1994. Nestle Philippines Inc. Johnson & Johnson Philippines Inc. For almost 2 decades.Production Assistant in 1982 for IBC Channel 13. helping the agency become a formidable force in the industry in a span of 3 months. GMA 7 and SBN 21.. Mr. Tan graduated cum laude with a degree in Broadcast Communications from the University of the Philippines in Diliman where she also taught TV Production and Writing from 1984 to 1988. assistant vice president for Manila Radio from 1994 to 1997. audiovisual presentation narrator and movie trailer announcer and hosted the multi-awarded entrepreneurial programs Radyo Negosyo on DZMM-AM radio and Kumikitang Kabuhayan on ABS-CBN Channel 2.. Mario Carlo P. Bulaong graduated from the University of the Philippines with a Bachelor's Degree in Mass Communication majoring in Broadcasting. Nestle’s independent media agency. Technical Production Operations Mr. He is tasked with establishing strategic long-term partnerships with agencies and advertiser clients by helping them build their businesses and. postproduction. Louis Benedict O. and Media Asset Management. Benitez was formerly Media Director and Vice President of Ace Saatchi and Saatchi. Peter A. and assistant vice president for ABS-CBN Sports from 1998 to 2002. she has handled various television production functions – associate producer. Nepomuceno. Mr. Raul Pedro G. Mr. the Luzon and Visayas Clusters transformed into profitable business units of the division and ratings in these areas continue to dominate the competition. This Smart win triggered a streak of 14 consecutive new business wins. Jr. Filipino. age 59 Managing Director. he was part of the team that managed RoadRunner Network. Regional Network Group Mr. Manila Radio and Sports The official voice-over announcer of ABS-CBN. he has been a commercial voice-over announcer. He was became Head of Manila Radio and Sports division in 2002. Ms. She joined ABS-CBN in 1993 as an executive producer. He passed the CPA board exams in 1973.

Tin also completed the Advanced Management Program at Harvard Business School in 2010 Atty. where she rose to become Associate Research Director in 1992. Corporate Communications Mr. dining and financial services. Mr. Corporate Planning and Investor Relations are also part of Vivian’s responsibilities. Inc. advocacy stalwart. He has had exposure to the banking. Robert G. She graduated magna cum laude with a Bachelor of Arts degree in Political Science and had her graduate studies on Applied Statistics. after having graduated from the College of Business Administration from the same university. He has worked with J. the social marketing and below-the-line arm of Campaigns and Grey. age 48 Head. (CAPRI). Ms. as its President. Academy for Educational Development (AED). In the 2002 and 2005 Catholic Mass Media Awards. he has spent 18 years in Campaigns Advocacy & PR. Center for Advertising Services in New York City. either as a consultant or employee. Today. After her stint in Trends-MBL. among others. Tin. which tackles and analyzes current events that impact on the Philippine business and life. Prior to joining ABS-CBN. Filipino. He was the president of the International Association of Business Communicators (IABC). Labayen. Uy. Her division provides consumer and market insights and information to support strategic and tactical business decisions for ABS-CBN and all its subsidiaries. age 51 Head. Filipino. sports and advocacy programs. data. particularly in media measurement and customized research. Mr. Vivian Y. Labayen spent 22 years in advertising prior to joining ABS-CBN in 2004. Tin heads the Research & Business Analysis Division of ABS-CBN. She was a director of AdBoard in 2005 and 2006 and was the President of the Marketing & Opinion Research Society of the Philippines (MORES) in 2004 and 2005. Ramon R. Creative Communication Management Mr. the media research division of ACNielsen Philippines. Mr. cable. marketing communications educator and journalist. Osorio is an active advertising and PR practitioner. Prior to joining ABS-CBN. He practiced law after passing the 1990 Bar Exams and eventually specialized in litigation and intellectual property law. He also served the advertising industry as President of the Creative Guild of the Philippines. He started as a copywriter and rose to the rank of Managing Partner and Executive Creative Director. he has serviced clients in the government and non-government sectors as well. Osorio. Filipino. his Division articulates the ABS-CBN vision of service to the Filipino through their work in promoting our company image and our entertainment. she moved on to ACNielsen Philippines where she became Director of Customized Research that handled top local and multinational companies in home care. Leonardo P. Maximilian T. age 50 Chief Research and Business Analysis Officer Ms. Osorio chaired the communication arts department of the University of Santo Tomas for 17 years and was the 2002 Agora Awardee for Outstanding Achievement in Marketing Education and The Outstanding Tomasian Alumni (TOTAL) Awardee for media. Tin has had extensive experience in market research. Ms. Osorio writes a weekly column in The Philippine Star. George Washington University. personal care. Osorio got his academic grounding at the University of Santo Tomas and the MBA program of the Ateneo de Manila Graduate School of Business. food. Ace Saatchi. Outside the private sector. pharmaceutical. Inc. Ms.industries with both local and global organizations. Mr. Special Projects and Licensing . He has always wanted to use his talents to champion the Filipino spirit that's why he joined ABS-CBN in 2004. fast moving consumer goods. Filipino. age 59 Head. telecoms. Uy earned his Bachelor of Laws degree from the University of the Philippines. Tin was formerly Executive Director of Nielsen Media Research. news. Walter Thompson. and is currently the IABC Regional Director for Asia-Pacific. transportation. DYR Alcantara and Campaigns. Nepomuceno is a graduate of the Ateneo de Manila University with a bachelor’s degree in Psychology. entitled Commonness. Katigbak. He likewise observed and trained at Johns Hopkins University in Maryland. all in Washington DC. both at the University of the Philippines. Commonness won as Best Business column. age 48 Chief Legal Counsel Atty. She began her career at Trends-MBL. Filipino. APCO and Porter Novelli. Philippine Chapter in 2003 and 2004. He joined ABS-CBN in February 2000 and has held his present position since July 2006. and BPO industries.

He is tasked to oversee proper management implementation of assigned key projects and corporate strategies that have direct impact in advancing the company's total business imperatives. and evaluation of mobile applications. Inc. she was likewise assigned to handle Star Records. Concurrent with her current position as ABS-CBN Film Production. Filipino. ABS-CBN Global Limited . He was an account director at Dentsu Young and Rubicam Malaysia for Colgate Palmolive Singapore and Malaysia. Luis Paolo M. an entertainment company. where he has worked extensively to expand the agency’s capability as a holistic communications organization that provide clients with the most effective communication and brand building programs. He joined ABS-CBN Interactive in 2000 as Business Development Manager for www. Ventosa graduated with a marketing degree from De La Salle University and was honored in 2004 by his alma mater as one of its alumni achievers for having made a significant contribution in the field of advertising. he will also have oversight on the Licensing Division. age 50 Managing Director. Santos holds more than 2 decades of experience in the local film industry having started as a production assistant for Vanguard Films in 1982. and regional account director at Leo Burnett in Singapore for McDonald’s Asia before returning to the Philippines in 1994. Santos. driving the group to reach its targets without fail year-on-year. Ms. he was officially designated as Managing Director for ABS-CBN Interactive. the chairman and the president of the Association of Accredited Advertising Agencies of the Philippines or 4A’s. age 40 Head. age 55 Chief Operating Officer. Filipino.. Prior to joining the Company. In 2006. He brings with him several years of experience in marketing. He was promoted to Director in 2002 and Assistant Vice President in 2004 as he began to provide strategic direction for his business unit. he took on the role of overall head for the company’s mobile and online business while practically co-managing its video-streaming operations. He was also responsible for directing the total marketing communications programs for clients whose brands are now leaders in their category. In 1995. Business Development Mr. Studio 23 Mr. Ventosa joined the Company in 2006 as Head of Corporate Marketing. director and producer before moving to the corporate side of the business in 1992. Antonio S. She joined the company as executive producer for its drama programs. Ms. His appointment to oversee the gaming business followed in August of 2005 and in December 2005. He was.pinoycentral. Mr. Lopez. Mr.com where he was able to establish strong partnerships and identified potential joint ventures with companies in the same industry. at one time. and a board director of AdBoard. He was appointed in 2009 as Managing Director of ABS-CBN’s Cable Channels and Print Media Group. and Star Records. having spent more than 2 decades honing his skills in understanding and driving strategic marketing communications considerations that build leadership brands. In addition to this. Ms. Cable Channels and Print Media Group and Concurrent Officer-in-Charge. She went on to become head of the movie division of Gryk Ortaleza. Pineda. ABS-CBN Film Productions Inc. Ventosa. Pineda is an alumnus of the Ateneo de Manila University and completed an executive management course in Kellogg University. Mr.’s Managing Director. Pineda was appointed Head of Business Development in 2009. Pineda has significantly contributed to the growth and success of the business unit. then a line producer for Regal Films in 1986 and the general manager of Vision Films in 1989. Rafael L. In 2005. Santos graduated cum laude in BS Hotel and Restaurant Management at the University of Santo Tomas. execution. the newly established marketing services company aligned with Leo Burnett. Inc. Katigbak was appointed Head of ABS-CBN's Special Projects and Licensing in 2008. she became the Managing Director of ABS-CBN Film Productions. He began the ABS-CBN Archives and concurrently worked in ABS-CBN Acquisitions prior to his assignment in Studio 23 as Head of Programming and Acquisitions. His work eventually included coordination with all ABS-CBN media platforms. He was also concurrent President of Arc Worldwide Philippines. Lourdes N. Santos was appointed Senior Vice-President of the Television Drama Division for the Company’s Entertainment Group in 2003. Mr. editor. Filipino. he was managing director of Leo Burnett Manila. conceptualization. Ma. Inc. starting out as writer. Katigbak has been with the company since 1987. Mr. He is the founding chairman of the Araw Values Awards. and was the director-in-charge of the first 4A’s Advertising Summit in 2002. Filipino.Former Studio 23 Managing Director. Inc. age 55 Managing Director. Inc.

Ms. He began his career as a financial analyst with First Pacific Capital Corp. ABS-CBN Interactive pioneered various digitals services such as mobile downloads. Mr. including the development and implementation of pioneering mobile services in the Philippines and abroad. age 50 Head. Carlo Katigbak. She also spearheaded various online and mobile ventures of the Company. he spent 12 years working as a systems analyst for Bell Atlantic. ABS-CBN Corporate Marketing Ms. Edson returned to television as part of the group that would launch Studio 23. Reyes is responsible for all newsgathering. she was the Managing Director of Carat Philippines and was Vice President of Universal McCann Philippines. He also obtained a degree in computer programming from Control Data Institute and completed the Stanford Business Executive Program for Executives in 2002. Filipino. She joined ABS-CBN in 1986 as a Production Assistant. Prior to joining ABS-CBN. Consuelo Nolasco-Lopez. Prior to this. Mr Katigbak also completed the Advanced Management Program at Harvard Business School in 2009. He has a Bachelor of Science Degree in Commerce Major in Accounting from the University of Santo Tomas. TFCNow. Bartolome brings with her more than 17 years of experience in integrated communications planning and media marketing. rose from the ranks to become Executive Producer and Head . He was then assigned to ABS-CBN Interactive as Managing Director in 1999. She is recognized locally and internationally for her innovative and cutting edge media solutions that have shaped the Philippine media landscape. and the launch of local music content through international online distribution channels. interactive TV. California. Katigbak has a Bachelor of Science in Management Engineering from the Ateneo de Manila University. Mr. Ms. ABS-CBN Global Manila Operations Mr. Filipino. he was invited to join SkyCable as Production Supervisor in 1992 and later served as Creative Director for both Programming and Marketing. Filipino . News and Current Affairs Ms. programs and campaigns to advertisers and media agencies. Provincial Operations and Finance. From segment producer/writer in Channel 2 in 1991. Bartolome graduated from the Ateneo de Manila University with a degree in Communication Arts. In 1998. Finance. Rosario S.Mr. online advertising and online video-on-demand.age 49 Head. Lopez assumed the position of Senior Vice President and Chief Operating Officer of ABS-CBN Global Limited in 2004. Prior to joining ABS-CBN Interactive. He brings with him 17 years of television experience from the ABS-CBN family. and Corporate Planning duties for SkyCable. Ms. age 42 Managing Director. Lopez handled Business Development. Filipino. He has strategic responsibility for its management and operations. Regina “Ging” E. She has over 20 years of solid experience as a broadcast journalist. Ma. and delivered impressive revenue growth during her tenure. She oversaw the expansion of ABS-CBN’s internationally-recognized online video-ondemand service. He concurrently serves as the Managing Director of ABS-CBN International in North America and has held this position since 1998. to becoming a key provider for broadband and communication services. Lopez was Head of International Business prior to her appointment as Managing Director of ABS-CBN Interactive in 2009. he served as the first Managing Director of Pilipino Cable Corporation which was a result of the merger between Sky Cable's provincial systems and Sun Cable. Nelson Edison M. Filipino. Ms. age 39 Managing Director. In 1996. in 1992. Bartolome will provide overall leadership in marketing the Company’s channels. USA. He joined SkyCable in 1994 as Corporate Finance Manager and has held various positions in Corporate Planning. content and strategic direction of the News and Current Affairs Division of ABS-CBN Corporation. age 41 Head. He graduated from the San Francisco State University with a Bachelor of Arts degree in Music. Reyes. Katigbak is spearheading the expansion of SkyCable’s business from being a national leader in the pay TV industry. Aguiflor was appointed ABS-CBN Global Manila Operations Head in 2008. Ma. Lopez graduated with a degree in Economics and French Studies from Mills College in Oakland. SkyCable As Managing Director. Aguiflor. Bartolome. ABS-CBN Interactive Ms. He started as the Information Technology Head of ABS-CBN International in North America in 1994. He returned to SkyCable as Managing Director in 2005.

he worked with Meralco for 20 years. 2003 at the subsidiary ABS CBN Interactive. in Philadelphia. long term corporate goals and objectives. Family Relationships Mr. She also handles the distribution of our local content to the global market. Oscar M. Lopez heads and exercises governance on all IT functions and activities which includes IT infrastructure and media systems management. Lopez. Filipino. Significant Employees . an Accredited Quality Assurance Reviewer and a Certified Internal Auditor. Lopez. Prior to joining the Company.Writer of the award-winning "The World Tonight" and other special events. USA. compliance and consulting audit services. Pennsylvania. contributing to the global content needs of ABS-CBN. he leads the Division in providing an independent and objective assessment and appraisal of the effectiveness of the Internal Control System throughout the organization through risk based operational. Lopez. age 49 Head. Reyes was ABS-CBN’S North America News Bureau Chief from 2002 to 2010. Lopez III and Mr. Lopez is the brother of Mrs. IT standards and strategies. information system and telecommunication related resources. medium. age 50 Head. a wholly owned subsidiary of Meralco engaged in the Telecommunications and Broadband business. Mr. As head of Internal Audit. he leads the company in developing corporate strategic plans and monitors the implementation of short. Concurrently. International Sales and Distribution and DTT Channels.S. he was with Globe Telecom for three years. and eventually. where he managed all ICT related assets of the Company covering all its computer. Before his appointment. age 39 Chief Information Officer As Chief Information Officer. long-term technology and strategic technical services. she was named by the Filipina Women’s Network as one of the 100 Most Influential Filipino Women in the U. Inc. Prior to joining ABS-CBN. A premier news personality in the Filipino community in the US. Dungo joined ABS-CBN in July 2008. Raymundo is an experienced media practitioner who helped shape the primetime programming of ABS-CBN through her pioneering work as an executive in Free TV and Cable TV industry for over two decades. Federico R. Federico R. (eMVI). He is a graduate of Menlo College in California with a degree in Business Administration. Lopez III and the father of Mr. Program Acquisitions. Filipino. Mr. Dungo is a Certified Public Accountant. In 2007. Camus. he was Vice President and Chief Information Officer of Manila Electric Company (Meralco). Reyes expanded the news operations of ABS-CBN in the US and Canada. Corporate Planning Mr. Eugenio L. He is the uncle of Mr. Ms. In 2011. age 51 Head. Filipino. He completed Executive MBA Program from the Asian Institute of Management. Higino Dungo. Raymundo joined the company in 1988. Psinakis and Manuel M. As head of Corporate Planning. he is the President and CEO of e-Meralco Ventures. Evelyn Raymundo. Mr. Lopez are first cousins. Director for News Production. Camus joined the company in May. a global designation for internal auditors. Prior to her appointment as Head of News and Current Affairs. Mr. Mark L. financial. Eugenio L. International Sales and Dsitribution and DTT Channels Ms. Camus obtained his MBA degree from the Wharton School at the University of Pennsylvania. CommGroup Internal Audit Mr. Presentacion L. In March. As Head of Program Acquisitions. ABS-CBN welcomed 3 new members to the Company’s Executive Committee: Below are their qualifications: Rafael L. 2009 he moved to the Parent Company. Filipino. she is in-charge of bringing in international programs that will suit the Philippine market.

973. commodities. Executive Compensation Information as to the aggregate compensation paid or accrued during the last 2 fiscal years and to be paid in the ensuing fiscal year to the Company’s chief executive and 5 other most highly compensated executive officers follow: SUMMARY COMPENSATION TABLE Annual Compensation Other Annual Compensation Name Chief executive and most highly compensated executive officers (in alphabetical order): Eugenio L. the Company is not aware of any order. judgment.190 154. the Company is not aware of any findings by a domestic or foreign court of competent jurisdiction (in a civil action).985 0 0 The directors each receive per diems amounting to P5.353 107. For the past 5 years. by any court of competent jurisdiction. barring.060. or control person of the Company in any type of business. the Company is not aware of any conviction by final judgment in a criminal proceeding. Endrinal Rolando P. There are no other arrangements for compensation either by way of payments for committee participation or consulting contracts. suspending.188 0 0 All managers and up as a group unnamed 2012E 2011 2010 1. Item 10. or otherwise limiting the involvement of a director.719 45. or decree not subsequently reversed.157 Bonus (P) 126. superseded.00 for their attendance to board meetings. or being subject to a pending criminal proceeding. securities. executive officer. or vacated.000. the Commission or comparable foreign body. person nominated to become a director. executive officer.035. executive officer.181 586. or control person has violated a securities or commodities law. person nominated to become a director. or control person.327. domestic or foreign. Santos-Concio Roldeo Theodore T. For the past 5 years. or control person of the Company is a party or of which any of their property is subject.762. person nominated to become a director. that any of its director.466.890. Involvement of Directors and Officers in Certain Legal Proceedings For the past 5 years.Lopez III (CEO) Ma.907. the Company is not aware of any bankruptcy proceedings filed by or against any business of which a director. Vidanes Year 2012E 2011 2010 Salary (P) 118. domestic or foreign. domestic or foreign. .913 1. permanently or temporarily enjoining.097. executive officer. or banking activities.059.456 97. For the past 5 years.796. Rosario N.831.The Company considers its entire work force as significant employees.472 451. Socorro V. Everyone is expected to work together as a team to achieve the Company’s goals and objectives. or a domestic or foreign exchange or electronic marketplace or self regulatory organization. person nominated to become a director. Valdueza Ma. of any of its director.

Psinakis.2033% of the Company’s total issued and outstanding capital stock.986. The 271. The PDRs are listed with the Philippine Stock Exchange. 2012: Title Of class Name and Address of Record Owner Name of Beneficial Owner and Relationship with Record Owner Lopez.607 57. 2012: As of March 31. and Eugenio Lopez III. 5/F Benpres Bldg. President and Chief Operating Officer Manuel M. Exchange Road cor Meralco Ave.Item 11. Inc. Manuel M. Rosario Santos-Concio Director. Security Ownership of Management as of March 31. Oscar M. is authorized to vote on behalf of ABS-CBN Holdings Corp.0000% 0.. Lopez Director Salvador G. Inc. Inc. equivalent to 0.585. The Board of Directors of ABS-CBN Holdings Corporation has the power to decide how ABS-CBN Holdings Corporation’s shares in ABS-CBN Corporation are to be voted. Lopez Director Presentacion L. 2012.820 40...’s shares in ABS-CBN Corporation are to be voted. Psinakis and Manuel M.0320% 0. Pasig City Common PCD Nominee Corporation G/F Makati Stock Exchange Bldg.) Citizenship No.605 1.700 shares beneficially owned by ABS-CBN Holdings Corporation form part of the 312.0003% 0. The Board of Directors of Lopez.231.833 63.0188% 0. Lopez. Inc. It has issued convertible notes covering the shares in the Company registered and beneficially owned by it in favor of Benpres Holdings Corporation. The shares in the Company registered and beneficially owned by it are covered by Philippine Depositary Receipts (PDRs) which gives the holder thereof the right to delivery or sale of the underlying share.038 shares of the Company.24% ABS-CBN Holdings Corp. Presentacion L.480. Security Ownership of Certain Beneficial Owners and Management Security Ownership of Certain Records and Beneficial Owners as of March 31. Tirona Director Filipino Filipino Filipino Filipino Filipino Filipino Filipino Filipino . of Shares Held Per cent Owned Common Lopez.988 1 146. Inc. Presentacion L. ABS-CBN Holdings Corporation is a participant of PCD. Chairman. (Manuel M.08% Lopez. and 50% by Oscar M. Inc.820 shares registered in the name of PCD. (Manuel M. Ayala Ave. Lopez.. is the holding company of the Lopez family. Lopez.) Filipino 312. ABS-CBN Holdings Corporation is owned 50% by Lopez. Psinakis Director Ma. Lopez.0000% Common Common Common Common Common Common Common Common Eugenio Lopez III Chairman and Chief Executive Officer Augusto Almeda-Lopez Vice-Chairman Oscar M. Makati City (PCD Nominee Corporation is not related to the Company) Filipino 446. the Company’s directors and senior officers owned an aggregate of 1.186 1 2 Percent Held 0. It is owned by the respective holding companies of the families of Eugenio Lopez. Title of Class Stockholder Name and Position Nature of Beneficial Ownership Direct Indirect Direct Direct Direct Direct Direct Direct Citizenship Number of Shares Held 651. Lopez.0835% 0.0000% 0.0082% 0. has the power to decide how Lopez Inc. Lopez Director Federico R. Chairman. is authorized to vote on behalf of Lopez.480. Jr. Lopez.191 249.

0011% Common Common Evelyn Javier Raul Pedro G. Furthermore.500 10. Nepomuceno Chief Human Resources and Organization and Development Learning Officer Vivian Tin Chief Research and Business Analysis Officer Direct Direct Direct Direct Direct Direct Filipino Filipino Filipino Filipino Filipino Filipino 269.038 0.2033% Changes in Control There have not been any arrangements that have resulted in a change in control of the Company during the period covered by this report.Common Common Common Common Common Common Federico M. nor is any material transaction presently proposed. Lopez Direct Direct Filipino Filipino 10. Certain Relationships and Related Transactions Relationships and Related Transactions / Agreements with Affiliates For a detailed discussion of ABS-CBN’s related party transactions.351 0.0346% 0.0000% 0.000 600 17.0062% 0. there had been no material transactions during the past 2 years.517 1 1 48. Katigbak Head. Digital Consumer Devices and Chief Risk Management Officer Martin L. executive officer of the Company. nor is any material transaction presently proposed.0013% 0. Except for transactions discussed in Notes 4 and 22 of the accompanying notes to the Company’s audited consolidated financial statements.0000% 0. Special Projects and Licensing Louis Benedict O.585. Bulaong Managing Director.g. Bennett Head.600 0. but with whom the registrants or its related parties have a relationship (e. ABS-CBN Technical Production Operations Leonardo P.987 0. between the Company and parties that fall outside the definition of “related parties” under PAS No.000 35. Regional Network Group Johnny C. Garcia Director Vicente Mendoza Independent Director Javier J. Valdueza Chief Finance Officer Ma.0000% Common Common Common Direct Direct Direct Filipino Filipino Filipino 52. Vidanes Head. Sy Head. former senior management of the Company or other parties who have some other former or current relationship with the . Item 12. to which the Company was or is to be a party in which any director.0013% 0.659 0. any relative or spouse of any such director or executive officer or owner of more than 10% of the Company’s voting securities had or is to have direct or indirect material interest. see Notes 4 and 22 of the accompanying notes to the Company’s audited consolidated financial statements. there had been no material transactions during the past 2 years.Calero Independent Director Rolando P.. The Company is not aware of the existence of any voting trust arrangement among the shareholders.0045% Common Direct Filipino 8.0025% Security Ownership of Directors and Management 1.0023% Common Direct Filipino 19. 24.0067% 0. Socorro V. or security holder of more than 10% of the Company’s voting securities.0001% 0. Channel 2 Mega Manila Management Mario Carlo P.000 15 0.

ABS-CBN’s commitment to adhere to best corporate governance practices was recognized for three consecutive years on May 26. It has issued convertible notes covering the shares in the Company registered and beneficially owned by it in favor of Lopez Holdings Corporation. policies and practices. Corporate Governance ABS-CBN recognizes the importance of corporate governance in enhancing the stakeholders’ interests in the Company and the Board of Directors commits itself to the principles of good corporate governance. Series of 2002 with a copy of the manual submitted to the Securities and Exchange Commission (“SEC”) in the same year. PART IV – CORPORATE GOVERNANCE Item 13. Oscar M. its Manual of Corporate Governance in compliance with SEC Memorandum Circular 2. is the registered owner of 57. the role of stakeholders. Through values cascading within the organization. Inc. 2011. Presentacion L. The ICD conducted the survey in partnership with the Philippine Stock Exchange (“PSE”). Parent Company Lopez. May 27. is the holding company of the Lopez family. The principles for corporate governance of ABS-CBN are contained in its Articles of Incorporation. They judged publicly-listed companies based on a questionnaire that measured corporate governance practices which include shareholder rights. Lopez. disclosure policies and transparency. treatment of shareholders. Resignation of Directors Because of Disagreement with Policies No director has resigned or declined to stand for re-election to the Board of Directors since the date of the last annual meeting of security holders of the Company because of a disagreement with the Company on matters relating to the Company’s operations. 2009 and 2008 Corporate Governance Scorecard. By-laws. ABS-CBN reaffirms its mission of being in the service of the Filipino. observing the highest standards of corporate governance and observing high ethical norms. which in the end must always remain consistent with this mission and goal of service.Company) that enables the parties to negotiate terms of material transactions that may not be availed from other. It is owned by the respective holding companies of the families of Eugenio Lopez. the SEC. As an organization.24% of the voting stock of the Company as of December 31. The SEC mandated the participation of publicly-listed companies in the survey. Lopez. The . The Board’s mission is to determine that the Corporation is managed in such a way to ensure this result while adhering to the laws and rules of jurisdictions in which it operates. 2011. Psinakis and Manuel M. more clearly independent parties on an arm's length basis. Jr. 2010 and April 22. The Mission of the ABS-CBN Board of Directors The ABS-CBN Board of Directors (the “Board”) represents the stakeholders’ interest in pursuing a successful business.. Inc. and the Ateneo School of Law. ICD further cited that the awarded companies were at par with corporate governance practices of companies in more advanced economies. a survey of corporate governance practices among 172 publicly-listed companies in the country. and board responsibility. the Company has identified the core values necessary to guide its leaders and employees in formulating and making business decisions. and espouses that there is no dichotomy between doing good business and practicing the right values. as amended. 2009 by the Institute of Corporate Directors (“ICD”) by naming the Company as one of the highest-scoring companies to garner a score of 90% or higher in the 2010. Lopez. including optimizing financial returns.

the Board has responsibility to the Company’s customers. Calero. In addition to fulfilling its obligations for increased stockholder value. and (vii) do not own more than 2% of the shares of the Company and/or its related companies or any of its substantial shareholders. (iii) are not acting as nominees or representatives of a substantial shareholder of the Company. Vice Chairman. whether by themselves or with other persons or through a firm of which they are partners or companies of which they are directors or substantial shareholders. The Board strives to regularly monitor the effectiveness of management’s decisions and the execution of the strategies. Salvador G. Maria Rosario Santos-Concio. Lopez. Federico M. In compliance with the SEC’s requirement to have independent directors with no material relationship with the Company comprising at least 20% of the Board. Augusto Almeda Lopez. Criteria for Independence for Independent Directors The Board assesses the independence of each director and of each individual nominated for election to the Board as an independent director. input in any policy formulation and discussion from directors who are employees is welcome and expected unless the issue involves an actual conflict of interest with such directors. For the year 2011. in fact as well as procedure. These directors are independent of management. Under the Manual of Corporate Governance. Justice Vicente Mendoza. or any of its related companies or any of its substantial shareholders. Federico R. Presentacion L. Oscar M. any of its related companies or any of its substantial shareholders within the last 2 years. either personally or through their firms.Board establishes the overall goals. these directors are Eugenio Lopez III. Mix of Directors There is a mix of executive. suppliers and the community. other than transactions which are conducted at arms length and are immaterial. 16. Lopez. officer or substantial shareholder of the Company. Psinakis. The final approval for the nominees as directors is determined by the full Board. Senior management executives other than the Chairman and Chief Executive Officer and the Chief Operating Officer attend Board meetings on a regular basis even though they are not members of the Board. Lopez. and Javier Calero. (ii) are not relatives of any director. the Board must review and conclude whether each nominee for independent director satisfies the requirements of the rules of the SEC. The Board of Directors The Board consists of 11 members. for screening its own members and in recommending them for election by the stockholders. and free from any relationship that may interfere with their judgment. (iv) have not been employed in any executive capacity by the Company. (v) are not retained as professional advisers by the Company. a independent directors (i) are not directors or officers or substantial stockholders of the Company or its related companies or any of its substantial shareholders (other than as independent directors of any of the foregoing). Board Performance . or any of its related companies or by any of its substantial shareholders within the last 2 years. As part of this analysis. The Chairman and Chief Executive Officer has direct input in the screening process. while the Board assumes decisions will be made by the independent directors. employees. the Board may elect directors to serve until the next annual meeting. (vi) have not engaged and do not engage in any transaction with the Company or with any of its related companies or with any of its substantial shareholders. Manuel M. non-executive and independent directors on the Board. Selection of Directors The Board itself is responsible. Calero and Justice Mendoza do not possess any of the disqualifications enumerated under Section II (5) of the Code of Corporate Governance and Section II (D) of SEC Memorandum Circular No. Tirona. Series of 2002. and Justice Mendoza — were elected. strategies and policies of the Company. Chairman and Chief Executive Officer. elected by shareholders during the last Annual Stockholders’ Meeting. two independent directors — Mr. On matters of corporate governance. the by-laws and the Manual of Corporate Governance. Mr. In case of vacancies in the Board between annual stockholder meetings. Garcia. or any of its related companies or any of its substantial shareholders.

to review the performance of the Company and its subsidiaries. It is composed of Federico M. 2011 Elected June 16. and is primarily a business strategy committee. Lopez Augusto Almeda Lopez Presentacion L. Calero 3 Justice Jose C. the Board had 11 regular meetings. The Compensation Committee reviews any recommendations on incentive schemes and issuance of stock options to employees. as well as any measures needed to fill such gaps. Lopez. Board Committees There are seven Board committees that have been established to address any issues requiring the directors’ attention. Calero. Tirona. as much as possible. Mendoza and Federico R. 2011 Resigned June 16. It is composed of Augusto Almeda Lopez.2011 Resigned June 16. Rosario Santos-Concio Oscar M. The Programming Committee deliberates on the programming issues and strategies of the network. budgets. Mendoza 2 Javier J. of Board Meetings Attended 11 9 10 9 10 2 6 9 11 6 6 4 2 Percentage of Attendance 100% 82% 91% 82% 100% 18% 55% 82% 100% 100% 100% 80% 40% 11 11 11 11 10 11 11 11 11 6 6 5 5 Attended Annual Stockholders’ Meeting? (Y/N) Y Y Y Y Y N N N Y Y Y Elected June 16. Vitug 4 Pedro N.000.The Board regularly meets monthly. . Mendoza and Augusto Almeda Lopez. Psinakis Manuel M. There are no other arrangements for remuneration either by way of payments for committee participation or consulting contracts. Garcia Salvador Tirona 1 Justice Vicente V. Rosario Santos-Concio and Javier J. Justice Vicente V. Lopez Federico R. Dy-Liacco 1 2 3 4 No. Justice Vicente V. set guidelines for management. It is composed of Salvador G. It oversees the replacement planning table of the organization. and discuss any various matters requiring Board attention and approval. The Succession Planning Committee ensures that there is a pipeline to key positions in the organization. 2011. and financial statements. Lopez III Ma. of Board Meetings Eugenio L. Ma. 2011 Compensation of Directors Members of the Board each receive per diems amounting to Php5. approve any pertinent plans. Board Attendance to Meetings in 2011 Total No. Any member of the Board may ask management to give special reports and analysis on certain issues. 2011 to December 31. From January 1. and identifies successors and gaps in succession. Lopez Federico M. Garcia.00 for their attendance to Board meetings. and that there are ready replacements for any key positions that are suddenly vacated.

The Group. It is composed of Salvador G. and assess the effectiveness of the Board’s processes and procedures in the election or replacement of directors. Audit Committee Report for 2011 The Audit Committee represents and assists the Board of Directors in fulfilling its oversight responsibilities as regards: • The integrity of the Company’s financial statements. frameworks. and establishing an effective follow-up system on related implementation. Federico M. Audit Internal Audit The Internal Audit Division provides independent assurance and advisory services to the Company's Board of Directors through its Audit Committee by evaluating the adequacy. and soundness of internal control environment. • • . Justice Vicente V. the Internal Audit Division presented to the Audit Committee audit status updates. their annual review of the Company’s financial statements and their independence in conducting other audit services. Mendoza. It is composed of Eugenio Lopez III. management of financial risks. Regular audits of the Company and its Subsidiaries are conducted based on a 3-year audit cycle and an annual audit plan approved by the Audit Committee. three certified internal auditors and a certified information systems auditor. and evaluates the company’s business conduct. It is composed of Javier J. examines internal control systems. analysis and recommendation of policies. Salvador G. Tirona and Justice Vicente V. The Nomination and Election Committee will review and evaluate the qualifications of all persons nominated to the Board and other appointments that require Board approval. and Justice Vicente M. Calero. threats and liabilities. and Justice Vicente V. strategies and systems to be used by the company to manage risks. and. Federico M. Mendoza and Javier J. Rosario Santos-Concio. the efficiency of financial reporting process. In March 2010. Calero.The Compensation Committee for the Chairman and the Chief Executive Officer is composed of Augusto Almeda Lopez. report to the Audit Committee. the Board approved the creation of two new committees to improve corporate governance: a Risk Management Committee and a Nomination and Election Committee. Garcia. The Internal Audit division also worked closely with the Company's Investor Relations and Corporate Planning group in preparing the Company’s responses to the 2008 . the Board of Directors created the Risk Management Committee to oversee the formulation and establishment of an enterprise-wide risk management system. effectiveness and efficiency of the Company's internal control system. including the review. Garcia. The Audit Committee reviews the financial reports and risks. Special audits are also undertaken as necessary. The qualifications and fees of the Company’s independent external auditors.2009 and 2010 Corporate Governance Scorecard for publicly listed companies where the company got high citations as earlier cited. which is composed of certified public accountants. Mendoza. Tirona. developing necessary recommendations for its improvement. In 2011. Mendoza. To highlight the importance of risk management among the Company’s strategic priorities. highlights and presentations on completed and on-going audit activities in accordance with the Audit Committee-approved internal audit plan. Ma. The independence and adequacy of internal audit functions and processes. oversees the audit process as well as the company’s compliance with laws.

The Audit Committee has reviewed the reports of the internal auditors and ensured. The Code covers all directors. the Audit Committee confirms for 2011 that: • • • An independent Director chairs the Audit Committee. The Compliance Officer also issues an annual certification on the compliance of the Board with the Company’s Corporate Governance Manual. and defines the roles of the different people involved in disciplinary action. or in which the employee or the company stands to gain unfairly from an arrangement.• The Company’s legal and regulatory compliance. Paul Michael V. Essential to the idea of good and ethical conduct is the upholding of common corporate and individual values. and anyone who acts in the name of ABS-CBN. Villanueva. In compliance with its Charter. through discussion with management and the internal auditors. internal auditors and external auditors within the context: that management is responsible for the Company’s financial statements and the related statements of financial condition and results of operations. the external auditor.  • - Compliance Officer The Company has appointed a Compliance Officer who is tasked to ensure the Company’s observance of corporate governance best practices and provide recommendations to the Board for continuous improvement towards full compliance and adoption of global best practices. and the grievance process. product and service providers. The Audit Committee has discussed and approved the overall scope and audit plans of the Internal Audit including the manpower resources and competencies necessary to carry out the audit as planned. Code of Conduct The Company also has a Code of Conduct. is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with the Philippine Financial Reporting Standards. that all the necessary corrective and relevant actions have been taken and implemented. The Code defines the behaviors that are acceptable or not acceptable within the organization. as approved by the Board of Directors. or procedure. The Compliance Officer is Mr. consultants. Quarterly meetings were held attended to by the members of the Committee. that SGV & Co. Jr. which are disseminated through a process of values cascading. and. relationship. the schedule of penalties for each offense according to its gravity. The roles and responsibilities of the Audit Committee are embodied in an Audit Committee Charter. It details the offenses versus the company’s or the person’s property. Risk Management . 2012. employees. The Company submitted to the SEC a certification of the Board’s compliance with the Company’s Corporate Governance Manual last January 25. Assisting in the dissemination and implementation of this Code of Conduct is the Ethics Committee. The Committee helps make decisions and clarify stands in cases of personal or professional conflict. The Audit Committee has reviewed and discussed the audited annual financial statements of the Company and its subsidiaries with the management.. which focuses on conflict-of-interest situations.

and EBITDA. ABS-CBN ensures that it has the proper control systems in place. ABS-CBN is compliant in submitting timely structured and non-structured reports and disclosure filing required by the SEC and the PSE. as a result of its operations. if not eliminate. Dealings in Securities ABS-CBN requires all members of the Board of Directors and principal officers to report any purchase. total liabilities and shareholders’ equity. and its Head of Investor Relations are always present at . Shareholder and Investor Relations ABS-CBN fully respects shareholder rights and complies with regulatory and legal requirements that enforce and ensure that such rights are respected. Johnny Sy as Chief Risk Management Officer. The Company’s corporate strategy formulation and business decision-making processes always take into account potential risks and the steps and costs necessary to minimize. analyze and mitigate market. transparent and timely information due shareholders. regulatory. the Audit Committee of the Board of Directors provided oversight on Enterprise Risk Management. and improve the Company’s risk management readiness. Head of Treasury and Compliance. ABS-CBN is subject to reporting requirements prescribed by regulatory authorities. Business segment information is likewise provided for major business categories and includes information such as revenues. The annual consolidated financial statements provide information on the financial condition and results of operations of the businesses of ABS-CBN and its subsidiaries. adopted global best practices. and other risks. capital expenditures and depreciation and amortization expenses. net income attributable to shareholders of ABS-CBN and minority interest. In 2009. and to the extent possible. revenues. These financial statements include detailed information on the total assets. costs and expenses. ABS-CBN’s Chief Finance Officer. ABS-CBN’s Investor Relations group also holds regular analyst and press briefings coincident with its quarterly and annual report submissions that further explain. These requirements include due and proper notification for general meetings and provision of adequate. Digital Consumer Devices. value to shareholders. sale or change in their shareholdings of the Company’s common shares or Philippine Depositary Receipts within five trading days. operating and net income. to identify and assess. In 2010 this responsibility was assumed by the newly created Risk Management Committee At the same time the Board of Directors of the Company approved the appointment of Mr. As Chief Risk Management Officer. he will provide the overall leadership. in compliance with the PSE’s requirement for such disclosure. As part of its stewardship responsibility and commitment to deliver optimum value to its stakeholders. assets and liabilities. community. reputational. Disclosures and Financial Reporting ABS-CBN’s financial statements comply with Philippine Accounting Standards and Philippine Financial Reporting Standards that in turn conform with International Accounting Standards. As a publicly listed corporation.ABS-CBN’s Board of Directors and management are mindful of the potential impact of various risks to the Company’s ability to deliver quality content across multiple platforms and consequently. vision and direction for enterprise risk management by establishing and implementing an integrated risk management framework to cover all aspects of risks across the Company’s organization. elaborate on and contextualize the Company’s operating performance and financial condition and results. To complement these disclosures. among others. operating income and income before tax. reporting directly to the Board of Directors. including the SEC and the PSE. earnings per share. concurrent with his responsibilities as Head. financial. such risks. operating.

business prospects and long-term plans.these investor. Head of Treasury and Compliance. financial information and reports and disclosures filed with the SEC and the PSE. In addition. ABS-CBN’s Chief Finance Officer. meet with representatives of institutional investors and investment funds upon request and at various investor conferences throughout the year for more intimate and detailed discussions about the Company’s businesses. Inquiries from institutional and individual investors received by regular or electronic mail are also duly acknowledged and addressed in a timely and transparent manner. analyst and press briefings to address any questions that may be raised concerning the Company’s operating and financial results. operating and financial results.abs-cbn. and its Head of Investor Relations. share price performance and dividend history. and investor relations contact information. ABS-CBN maintains an investor relations website that contains information on the history and businesses of the company.com . its Board of Directors and senior management executives. ABS-CBN’s Investor Relations website may be found on http://ir.

2011 May 12. 2011 March 30. 2011 April 15. 2011 May 12. 2011 August 13. and FY 2010 Briefing Presentation Materials Amendment to Previously Disclosed Press Release: ABS-CBN net income jumps 87% in 2010 to P3. 2011 March 10. 2012 Quarterly and Annual Reports / Financial Statements 17-A Full Year 2010 17-Q 1st Quarter of 2011 17-Q 2nd Quarter of 2011 17-Q 3rd Quarter of 2011 April 29. 2011 May 12. 2011 August 1. 2011 The President’s Report during the 2010 Annual Stockholders’ Meeting Results of the 2010 Stockholders’ Meeting Clarification of News Article:” ABS-CBN to build P6B sound stages Creation of Board of Advisors 1H 2011 Analysts’ and Press Briefing Schedule Press Release-1H2011 Financial Results and Briefing Presentation Materials Investment in Sapientis Holdings Corporation Press Release-9M2011 Financial Results and Briefing Presentation Materials Cash Dividend Declaration and Notice of Stockholders Meeting on June 21.2012 FY2011 Analysts’ and Press Briefing Schedule Press Release. 2011 November 14. 2011 August 25.2 billion. 2011 June 28. 2011 March 09. 2011 June 17. 2011 May 9.ABS-CBN and Lopez Holding Complete PDR Sale to STT Communications Definitive Information Statement for Annual Stockholders’ Meeting on June 16. 2011 May 23. Analysts' and Press Briefing on ABS-CBN's FY 2010 Financial and Operating Results ABS-CBN net income jumps 87% in 2010 to P3. 2011 June 16.2 billion Clarification of News Article: "ABS-CBN posts P3. 2011 Amended Press Release.2B net profit" 1Q 2011 Analysts’ and Press Briefing Schedule Notice of Annual Stockholders’ Meeting Press Release – ABS-CBN and Lopez Holdings Complete PDR Sale of STT Communications Press Release – 1Q 2011 Financial Results and Briefing Materials Preliminary Information Statement for Stockholders Meeting on June 16. 2011 April 01. Exhibits and Reports on SEC Form 17-C For the past 12 months. 2012 March 30. 2011 May 2. 2011 June 16. 2011 April 14. the Company has filed the following SEC Form 17-C reports and financial statements: EXHIBITS AND REPORTS FILED SEC Form 17-C Special Stockholders' Meeting on March 9. 2011 August 15. 2011 May 14. 2011 . 2011 November 14. 2011 Cash Dividend Declaration Results of Special Stockholders' Meeting Clarification of News Article: "ABS-CBN net P3B in 2010" Investors'. 2011 March 04.2012 April 13. 2011 May 12.FY2011 Financial Results and Briefing Presentation Materials DATE January 26.PART V – EXHIBITS AND SCHEDULES Item 14.2011 April 14.

1 billion from political advocacies and political advertisements in 2010.091) (13) (4. 2011 For the year ended December 31.252 2.200 17. 2011 28.420 6. P4. Minus the revenues of P3. consolidated revenues would have decreased by 4% year-on-year.178 8.552 23. Key Performance Indicators (Amounts in million Pesos) Consolidated Revenues Consolidated Advertising Revenues Consolidated Consumer Sales Operating and Other Expenses Net Income EBITDA Consolidated Revenues For 2011. The table below summarizes the key performance indicators for the period as discussed above.578 10.161) (19) 70 1 (1. ABS-CBN generated consolidated revenues of P28. P4.2 billion from advertising and consumer sales. consolidated revenues decreased by 4% year-on-year.515 3. Removing the effects of this one-time gain in 2011 and P3.291 21. Total operating and other expense in 2011 was at P22.2 billion from advertising revenues and consumer sales.837 2010 32. or a 21% decline year-on-year.739 10.1 billion or 13% lower year-on-year. Stripping the one-time gain in 2011 and discarding the P3.4 billion in 2011. Reported EBITDA reached P6. ABS-CBN Corporation (“ABS-CBN” or the “Company”) generated consolidated revenues of P28. inclusive of the P1.622 22.1 billion revenues generated from political advocacies and political advertisements in 2010.ANNEX A MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31.1 billion gain in sale of Sky Cable Philippine Depositary Receipts (PDRs).642 Variance Amount % (4. or a 5% decline year-on-year.3 billion. Minus the revenues of P3.8 billion for the full year 2011.805) (5) (24) (21) .1 billion revenues generated from political advocacies and political advertisements in 2010.1 billion from political advocacies and political advertisements in 2010. a 24% decline year-on-year. Reported net income was at P2. EBITDA would still be down by 14% year-on-year.1 billion or 13% lower year-on-year. The contribution of consumer sales to total revenues is higher at 38% from 33% a year ago. Advertising revenues contributed 62% of total consolidated revenues while consumer sales made up the balance of 38%.263) (758) (1. 2011. net income would still be down by 21% year-on-year.

739 10.836 4. and Maria La Del Barrio Consumer Sales Consumer sales for the year 2011 amounted to P10. Broadband service subscriptions increased 18% year-on-year. which grew 18% in 2011. TV Patrol. Pilipinas Got Talent (Sun). The increase is largely attributable to Sky Cable’s growth in revenues.622 2010 5. twenty one of the company’s shows were in the Top 20.091) (3. based on the Kantar National TV Ratings. The increase is also partly due to the increase in sales of other subsidiaries mainly ABS-CBN Film Productions. ABS-CBN maintained its national audience share and ratings leadership with prime-time audience share averaging 43% in 2011.161) (19) 92 (22) 70 (4.578 10. Nasaan Ka Elisa?. . Noah.331 1. My Binondo Girl.930 1.060 29.060) (1.622 28. Gomez’s Mutya. Rated K Handa Na Ba Kayo?.552 Variance Amount % (430) (8) 401 10 99 7 70 1 Sky Cable’s consolidated revenues for the year from cable TV and broadband services grew 10% year-onyear. Budoy.200 2010 21.455 10.1 billion from political advocacies and political advertisement in 2010. Wansapanataym.200 28. This decrease is attributable to a slowdown of advertising spending by corporates.552 32. advertising revenues decreased by 6% year-on-year. while subscriptions to Sky Cable’s post-paid TV offering grew by 8%.Consolidated Revenues (Amounts in million Pesos) Consolidated Advertising Revenues Consumer Sales Sale of Services Sale of Goods Consolidated Consumer Sales Consolidated Revenues Political Advocacies/Political Advertisements Consolidated Revenues Net of Political Advocacies/ Political Advertisements Advertising Revenues 2011 17.231 Variance Amount % (4. PabloS.356 10. Minsan Lang Kita Iibigin.031) 1 (5) 1 (13) (100) (4) Consolidated advertising revenues across all platforms and subsidiaries declined by 19% to P17. with a 13 percentage point lead over GMA’s.6 billion. 100 Days to Heaven. Ikaw ay Pag-ibig.6 billion. or a 1% increase year-on-year.’s Mara Clara.165 457 10. with the following occupying the Top 18 slots: Emil Cruz Jr. However.266 3.073 479 10. Imortal. For the full year 2011. Guns and Roses. minus the revenues of P3.Junior Master Chef Pinoy Edition (Sat).291 3. Pilipinas Got Talent (Sat). driven by a 7% growth in postpaid revenues and a 24% growth in broadband revenues. Maalaala Mo Kaya…. Consumer Sales (Amounts in million Pesos) ABS-CBN Global Sky Cable Other subsidiaries Consolidated Consumer Sales 2011 4.

0 billion or 25% to P9.252 2010 7. equipment rentals and service fees. from P45.683 1.ABS-CBN Global’s revenues declined year-on-year by 8% in peso terms or 4% in US dollar terms. and other expenses substantially higher. a co-production with Viva Films.515 Variance Amount % 1. Praybeyt Benjamin.263) (5) Non-cash production costs went up by 27% to P1. Cash production costs went up by P1. No Other Woman . and single digit growth in Asia-Pacific and Australia. Dalaw.370 2.835 6. Middle East.30 in 2011.272 6.3 billion. Double digit growth continued to be experienced in Canada. Production Costs (Amounts in million Pesos) Personnel Expenses and Talent Fees Facilities-Related Expenses Other Program Expenses Sub-total: Cash Production Costs Non-Cash Production Costs Consolidated Production Costs 2011 4.527 8. grossed P282 million.10 in 2010 down to P43. Europe and Japan.835 2010 3.593 25 377 27 1. .700 7.8 billion. 4 films more than in 2010.468 1. mostly from increases from talent fee adjustments.070 8.762) (454) (1.865 7. grossed P342 million. also a co-production with Viva Films. there was a decline in subscriber count in North America.80 appreciation of the Philippine peso exchange rate against the US dollar. Inc. Operating and Other Expenses Total operating and other expense in 2011 was at P22.061 1.164 1.45 million at the end of 2011.6 billion or 25% year-on-year.970 25 2011 9. Cost of Sales and Services Cost of sales and services declined by 5% or P370 million to P6. ABS-CBN Film Productions.101) (13) (1.513 1.774 9. Total Operating and Other Expenses (Amounts in million Pesos) Production Costs Cost of Sales and Services General and Administrative Expenses Other Expenses (Income) Consolidated Total Operating and Other Expenses Production Costs Total production costs rose by almost P2. ABS-CBN Global’s overall viewer count was an estimated 2. and from new programs that brought talent fees. or a 5% decline year-on-year. No Other Woman and Praybeyt Benjamin–topped P100 million in box office receipts.091 (1.865 Variance Amount % 857 24 481 29 255 20 1.397 7. earning blockbuster status by local standards. Catch Me I’m In Love . The stronger decline in peso terms was due to a 4% or P1.374) 22. released 16 films in 2011.7 billion.192 388 23. due to higher depreciation costs and amortization of program rights.970 25 (370) (5) (1. Six of them–Ang Tanging Ina Mo Last Na To. almost flat compared to the previous year. In The Name of Love .8 billion. However.

Removing the effects of this one-time gain in 2011 and P3.1 billion revenues generated from political advocacies and political advertisement in 2010. net income would still be down by 21% year-on-year. EBITDA would still be down by 14% year-on-year.ABS-CBN Global’s cost of sales declined 15% in peso terms declining faster than the 8% year-on-year reduction in its sale of goods and services.1 billion gain in sale of Sky Cable PDRs.192 Variance Amount (844) 8 (21) (82) (165) 3 (1.1 billion revenues generated from political advocacies and political advertisement in 2010.091 2010 4.700 2010 2.471 782 536 696 420 1.8 billion. slower than its 10% growth in gross revenue.680 2.627 790 515 614 255 1. Net Income The company generated a net income of P2. .1 billion year-on-year decline to P7.0 billion to P6. Cost of Sales and Services (Amounts in million Pesos) ABS-CBN Global Sky Cable Other Subsidiaries Consolidated Cost of Sales and Services General and Administrative Expenses Total General and Administrative Expenses (GAEX) posted a 13% or P1.4 billion for the year 2011.003 1.287 8.070 Variance Amount (406) 217 (181) (370) % (15) 8 (11) (5) % (19) 1 (4) (12) (39) (13) Cash GAEX went down by P1.290 7. a 24% decline year-on-year.101) 2011 2.786 1. Sky Cable’s cost of sales meanwhile. grew by 8% year-on-year. EBITDA Earnings before interest. These are all programmed expenditures to increase the company’s capacity to produce additional shows. Capital Expenditures Capital expenditures and program rights acquisitions for 2011 amounted to P4. P521 million or 14% higher year-on-year. inclusive of the P1.2 billion. Stripping the one-time gain in 2011 and removing the P3. depreciation and amortization (EBITDA) for the year was at P6.423 6.604 7. of which more than half is accounted for by personnel expenses.5 billion.1 billion. General and Administrative Expenses (Amounts in million Pesos) Personnel Expenses Contracted Services Facilities-Related Expenses Depreciation and amortization Provision for Doubtful Accounts Other Expenses Consolidated GAEX 2011 3. taxes.274 3. or a 21% decline year-on-year.

6 billion trade accounts receivables at the end of 2010.8 billion or 48% higher than the December 31.8 billion or 15% higher than total assets of P39. The company’s net debt-to-equity ratio improved at 0. Consolidated trade and other receivables stood at P8. Cash and cash equivalents of P8. Days sales outstanding of 83 days is 20 days more than the 63 days as at December 31. total consolidated assets stood at P44. 2010.6 billion is P2.8 billion. P2. .22x. P5.4 billion is P827 million or 15% higher than the P5.9 billion or 30% to P12.7 billion shareholders’ equity at the end of December 2010. 2010 balance. Total interest-bearing loans went up by P2. 2011. 2010.0 billion as at December 31. The company’s debt ratios remain well within the limits prescribed under its loan covenants.Balance Sheet Accounts As at December 31. as trade accounts receivables amounting to P6.5 billion compared with P9.19x compared with the ratio at the end of last year of 0. The corresponding increase in receivables and accretion of DSO are well anticipated with the removal of discount schemes on prompt payment.1 billion.6 billion or 15% higher than the P17.3 billion. P880 million or 12% higher than as at the end of 2010. Shareholders’ equity stood at P20.6 billion at the end of last year.

the contribution of consumer sales to total revenues is consequently lower at 32%.MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR 2010 ABS-CBN Corporation (“ABS-CBN” or the “Company”) generated unprecedented profits of P3. Advertising revenues accounted for 68% of consolidated revenues.276 102 (42) 60 7. Total expenses in 2010 grew by P3. stemming from higher production costs brought about by increased original programming that better suits our viewers changing needs.446 32.8 billion or 20% year-on-year to P23.463 9. 2010.7 billion recorded in 2009 primarily from the surge of political ads in the first half of the year and later sustained by the growth momentum in recurring advertising revenues in the second half of the year. Net of revenues from political advertisements and political advocacies. Consolidated revenues for the year reached an exceptional level of P32.2 billion in 2010. the contribution share of consumer sales would be at 36%.865 521 10. 33% or P2.4 billion. .6 billion.3 in 2010 reaching P21. Net income for 2010 jumped 87% to P3. Consolidated Revenues (Amounts in million Pesos) Consolidated Advertising Revenues Consumer Sales Sale of Services Sale of Goods Consolidated Consumer Sales Consolidated Revenues Political Advertisements/Political Advocacies Consolidated Revenues Net of Political Advertisement / Political Advocacies Consolidated 2010 21. almost double the net income of P1.3 billion or 30% higher than a year ago.994 29.2 billion. Without revenues from political advertisements and political advocacies. This total includes approximately P3 billion of advertising revenues from political advertisements and political advocacies.2 billion.7 billion.185 2. Because of the extraordinary boost to advertising revenues by election-related advertising this year. from 43% a year ago.2 billion.137 Variance Amount 7. ABS-CBN generated consolidated revenues of P32. Reported EBITDA hit a record high of P8.5 billion higher than the reported net income a year ago. posting a 30% growth from a year ago.195 2009 14. P7.386 24. while consumer sales accounted for the remaining 32%.282 5.967 479 10. P1.1 billion higher than reported EBITDA in 2009.336 2.058 % 50 1 (8) 1 30 321 21 Advertising Revenues Consolidated advertising revenues across all platforms and subsidiaries rose 50% or P7. Consolidated Revenues For the year ending December 31.739 9.849 712 24. the contribution share of consumer sales would be at 36%.

ABS-CBN programs held over 15 of the top 20 slots for weekdays and weekends. Underpinning the surge in advertising growth is the strong national program ratings and high audience shares.582 1. Habang May Buhay.Without political advertisements and political advocacies. Pepeng Agimat.386 Variance Amount (106) 348 (182) 60 % ( 2) 10 (12) 1 ABS-CBN Global’s revenues rose by 3% year-on-year in US dollar terms. the sponsored debates with our pioneering efforts in the use of Wireless Automatic Response System or WARS and through Boto Mo. TV Patrol. Consumer Sales Consumer Sales in 2010 amounted to more than P10 billion. kept the viewers informed and properly educated. Tanging Yaman. Rosalka and the Agimat Series with Ang Mahiwagang Daigdig ni Elias Paniki. In 2010. while election-related advertisements in the first semester contributed 5%. Consumer Sales (Amounts in million Pesos) ABS-CBN Global Sky Cable Other subsidiaries Consolidated consumer sales Consolidated 2010 5.446 2009 5.160 3. mainly from Sky Cable. Regular advertising minutes during the year accounted for 95% of total minutes. from an average of P47. These programs have become a staple not only in the delivery of news but also a source of knowledge. Rated K. with a lead of ten percentage points over GMA7’s 37%.—kept the audience enthralled and enjoyed national program ratings prominence in their respective timeslots. driven by strong growth in regular advertising minutes which likewise grew 35%. Pilipinas Got Talent. it declined by 2% as the appreciation of the peso stunted the growth. In peso terms. iPatrol Mo: Ako Ang Simula campaign of news and current affairs. These programs became a source of empowerment and made people more vigilant and protective of their respective votes.266 3. Matanglawin. enjoying ratings of as high as 39% . going by Kantar Media National TV Ratings’ figures. The Philippine peso’s exchange rate to the US dollar has appreciated by 5% or P2. Total advertising minutes sold by Channel 2 for twelve months leaped 43%. Dahil May Isang Ikaw. ABS-CBN’s programs continued to dominate the Top 20 programs list.538 10. ABS-CBN maintained its national audience share and ratings leadership with total-day audience share averaging 43% in 2010.10 in 2010. Imortal. Kokey@Ako. We endeared to a greater number of audiences as the nation turns its focus to the national elections last year. to name a few.53. Weekday and week-end entertainment programs launched or aired in 2010— Agua Bendita. The high-rating entertainment shows were ably complemented by erstwhile but constantly relevant and evolving news and current affairs shows— Bandila.356 10. . The increase is attributable to the surge in total advertising minutes sold this year and programmed rate increases that took effect in February. registering growth of 36% year-on-year or P5 billion. Umagang Kay Ganda. Kung Tayo’y Magkakalayo.7 billion. however.63 in 2009 to P45. Tiagong Akyat and Tonyong Bayawak. Noah. posting a slight 1% increase or P60 million from a year ago. consolidated advertising revenues reached P18. Mara Clara (remake).930 1. Wansapanataym. The documentaries.

964 8. Miss You Like Crazy. Cash production costs went up by P1.9 billion. overall subscriber count grew at a double-digit rate in Canada.8 billion or 20% year-on-year to P23.. New programs also .968 183 3. In 2010. sales incentives and co-production partners’ share of revenues.825 % 25 1 32 89 20 Production Costs Total production costs in 2010 rose by P1.0 billion registered in 2009. and salaries and benefits of production personnel.7 billion higher than consolidated net revenues of P22. continued to produce and or co-produce compelling genres that are well received by the public.224 205 19. and variety shows to meet viewer needs and advertiser demand. Here Comes the Bride. satellite TV subscriber generated a 10% growth as affordable and flexible plans continued to attract new direct-to-home subscribers. as prescribed under the new income statement presentation standards that took effect this year. afternoon programs.iWantv. Sky Cable’s consolidated revenues from cable TV and broadband services grew 10% year-on-year. Inc. Our consolidated net revenues in 2010—which are consolidated revenues minus revenue deductions— amounted to P27.4 billion.5 billion or 31% year-on-year. Broadband service subscriptions that carry higher ARPUs surged 36% year-on-year. and My Amnesia Girl–exceeding P100 million in box office receipts and earning local blockbuster status. while subscriptions to Sky Cable’s post-paid cable TV offering grew by 5%.Strong double-digit subscriber growth in cable TV subscriptions hoisted the growth in ABS-CBN Global’s overall viewer count as it increased by 2% year-on-year. Together with the introduction of a tiered pricing mechanism.584 Variance Amount 1. In 2010 the movie arm released a total of twelve movies with four of them – I Love You. Total Expenses (Amounts in million Pesos) Production Costs Cost of Sales and Services General and Administrative Expenses Other expenses (income) Total expenses Consolidated 2010 7. mostly from increases in talent fees. as we strategically increased programming hours of in-house produced primetime dramas. Sky Cable launched the Sky Broadband Ultra High Speed Internet connection subscription that offers speeds of up to 112 mbps.865 6. This offering greatly complemented the revolutionary online access to entertainment product.8 billion. penetration rates in cable TV viewing steadily improved.6 billion or 25% to P7. These revenue deductions consist of agency commissions. which also originated in 2010.578 96 1. Sky Cable pursued its thrust to enhance viewing experience for its customers with continued move towards digitization.192 388 23. Goodbye. In Australia.287 6.868 6. driven mostly by higher production costs and general and administrative expenses (GAEX).409 2009 6. 26% or P5. ABS-CBN Film Productions. powered by a 64% increase in broadband service revenues. With new cable distribution partnerships driving subscriber acquisition. Expenses Total expenses grew by P3.

and the corresponding year-on-year GAEX increase is only 10% for the period.866 2009 2.342 6.786 1.033 778 529 Variance Amount 1.605 6.raised equipment rentals and service fees.573 2. Production Costs (Amounts in million Pesos) Personnel expenses and talent fees Facilities-related expenses Other program expenses Sub-total: Cash production costs Non-cash production costs Total production costs Consolidated 2010 3.3 billion one-time expenses for performance-based pay and non-recurring corporate initiatives. inclusive of P1.438 4 7 % 47 1 1 .1 billion year-on-year increase to P8. ABS-CBN Global’s cost of sales rose at a faster rate of 4% than versus the 1% growth in its subscription and merchandising revenues in peso terms.272 6.4 billion.471 782 536 2009 3. Setting aside these one-time expenses.170 875 4. recurring consolidated GAEX amounts to P6.945 1.645 1. even as amortisation of program rights fell by P74 million. Cost of Sales and Services Cost of sales and services grew by only 1% or P96 million to almost P7.745 6.900 1.468 1. 868 Variance Amount 95 141 (140) 96 % 4 5 (8) 1 General and Administrative Expenses Among all the major expense buckets. The decrease is offset by the increase in depreciation charges of P130 million or 16% to P920 million following the accretion in our capital expenditures.964 2009 2.398 7.287 Variance Amount 613 513 397 1.2 billion.8 billion. transportation and catering. 579 % 21 44 45 31 4 25 Non-cash production costs increased by 4% or P56 million to P1.513 1.0 billion. Sky Cable’s cost of sales grew by 5% year-on-year even as its revenues accelerated at rate of 10%.683 1.523 56 1. In contrast. total General and Administrative Expenses (GAEX) rose the highest with a 32% or P2. and other expenses for sets and set rentals.478 2. Cost of Sales and Services (Amounts in million Pesos) ABS-CBN Global Sky Cable Other subsidiaries Cost of sales and services Consolidated 2010 2. General and Administrative Expenses (Amounts in million Pesos) Personnel expenses Contracted services Facilities-related expenses Consolidated 2010 4.

Net Income With strong advertising revenue inflows and continuing financial discipline.1 billion increase from the P6.0 billion at the end of last year. the Company generated net income of P3.5 billion or 74% higher than the December 31.9 billion to P7.8 billion or 16% higher than the P4.192 609 292 983 6. of which more than half is accounted for by personnel expenses for reasons explained and cited above. 2010 reached P8.5 billion or 13% higher than total assets of P34. with net trade accounts receivables amounting to P5. The increase is due to the additional borrowing by both parent and Sky Cable for working .3 billion.Depreciation Provision for doubtful accounts Other expenses Consolidated GAEX 669 420 1. 87% or nearly P1.6 billion.5 billion total reported EBITDA in the same year-ago period. and film and program rights acquisitions declined by P10 million or 2% to P575 million due to lesser program acquisitions for our newer cable channels.1 billion.8 billion as at December 31.314 8. Capital expenditures went up by P748 million or 32% to P3. a 33% or P2.8 billion is P2.5 billion more than last year. Total interest-bearing loans went up by P679 million or 8% to P9. 2010. and increasing net profit margin this year by three percentage points to 10%. 2009. total consolidated assets stood at P39.2 billion. P1. Cash and cash equivalents of P5. P738 million or 25% higher than the level of spending in the same period last year. P4. The Company fully utilised the capital expenditures and film rights acquisition budget as at year end.6 billion being P0.224 60 128 331 1. 2009.2 billion in 2010. 2009 balance. This translates to an EBITDA margin of 27% versus 26% from a year ago.968 10 45 34 32 Cash GAEX went up by P1.5 billion or 27% higher than as at the end of 2009.6 billion compared with nearly P9. Days sales outstanding of 63 days is 7 days less than the 70 days as at December 31. EBITDA Total reported EBITDA for the year ending December 31.5 billion.8 billion trade accounts receivables at the end of 2009.7 billion. Capital Expenditures Capital expenditures and film and program rights acquisitions in 2010 amounted to P3. Consolidated trade and other receivables stood at P7. Balance Sheet Accounts As at December 31. The growth in the three major expense buckets is programmed and well within expectations and budget.

the new loan agreement also incorporates more relaxed covenants. . The loan is intended to refinance existing debt facilities totalling P6.0 billion. companies. The company’s net debt-to-equity ratio improved further to 0. 2017.7 billion.2 billion shareholders’ equity at the end of December 2009. the Company successfully signed a syndicated term loan for P10. 2010.6 billion or 10% higher than the P16. ABS-CBN’s effective interest cost on all its interest-bearing debt will go down by about two percentage points. Apart from the savings that will be generated.65% per annum for the fixed rate portion. The loan is amortizing with a final maturity of November 9. Consequently. This capital-raising exercise takes advantage of prevailing low interest rates and the Company’s stronger financial performance in recent years to lower its cost of debt and fund its expansion requirements.22x as a result of higher cash and cash equivalents versus 0. from which the Company expects to generate savings in annual interest expenses of over P90 million. P1. The additional amount was availed simultaneous with the loan refinancing by both Shareholders’ equity stood at P17. The company’s debt ratios remain well within the limits prescribed under its existing loan covenants as at December 31.capital purposes. The loan is unsecured and unsubordinated with interest at 3-month PDST-F plus 0.65% per annum for the floating rate portion and 7-year PDSTF plus 0. 2010.35x at the end of last year. On October 29.6 billion and to fund working capital requirements.

Earnings before interest.673 22. ABS-CBN Broadcasting Corporation (“ABS-CBN” or the “Company”) delivered consolidated revenues from advertising and consumer sales of P24.129 3. Revenues Advertising Revenues In January 2009. after an P85.85 billion. depreciation and amortization (EBITDA) reached P6. to P1.38 billion.495 1. from 2008’s net income attributable to shareholders of P1.283 521 21. Consolidated Revenues (Amounts in million Pesos) Advertising revenues Consumer Sales Sale of Services Sale of Goods Revenues before Sky Cable Add: Sky Cable revenues Consolidated revenues Consolidated 2009 14.58 billion in consumer sales and P137.MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR 2009 Management is pleased to report that for the calendar year ended December 31. and engaging reality programs in the afternoons and on primetime.54 billion or 11% year-on-year inclusive of full-year gross revenue contribution from Sky Cable of P3.77 million or 13% year-on-year to P6.419 5. Despite a weak start to the year.72 billion.70 billion. despite a weak first quarter and a six-month deferral of airtime rate increases to August 2009.307 Variance Amount 906 581 8 1. we invested on further improving our content.048 2. Net income attributable to shareholders for 2009 went up by 23% year-on-year or P318. ABS-CBN sustained its dominance in local television with heart-warming and inspiring dramas.11 billion. Sky Cable contributed P3.25 million accounting adjustment required under Philippine Financial Reporting Standard 3. 37% or P481 million higher than the P1.51 billion.721 24. global recession worries prompted major advertisers to reduce their annual advertising budgets and request for a six-month rate increase moratorium. taxes.93 million.543 % 7 10 2 8 39 11 Our fast-growing consumer sales businesses continued to raise their contribution to total revenues.634 2. light and amusing comedy shows.79 billion in 2009. 2009. Consolidated revenues in the fourth quarter of 2009 increased by P758.90 million in airtime revenues.65 million better than 2008 EBITDA of P6. as well as weakened household spending affecting many of its subscribers locally and in major economies overseas. posting an increase of P2. A tight control of operating expenses and prudent financial management resulted in core net income reaching P1.850 2008 13.31 billion posted in 2008.51 billion.702 513 19.325 6. such as the . which we granted in consideration of longstanding business relationships. yielding an EBITDA margin of 26% for 2009. and is 7% or P405. reaching 42% of consolidated revenues in 2009 with double-digit growth in the subscription businesses of ABS-CBN Global and in the contribution of Sky Cable.

among others. Backed by strong afternoon and primetime program ratings and audience shares. We enabled the nation to mourn together as well as to relive and celebrate the spirit of unity with our special coverage of the wake and funeral cortege of former President Corazon Aquino in August 2009. and to protect their ballot in 2010. are empowered to vigilantly protect their right to register and vote. with 92% coming from Channel 2.325 138 2008 12. TV Patrol World. Advertising Revenues (Amounts in million Pesos) Parent airtime revenues Other platforms Advertising revenues before Sky Cable Add: Sky Cable airtime revenues Consolidated 2009 13.97 million or 16% year-on-year to P3. Showbiz News Ngayon.000. In December 2009. the first nine of the Top 10 and fourteen of the Top 20 programs in 2009 were from ABS-CBN. This high-quality entertainment fare was complemented by relevant weekday and weekend news and current affairs programs that armed viewers with information and knowledge to face the day’s challenges and concerns -. Banana Split and Pinoy Big Brother Double Up. with some advertisers even increasing their spending with ABS-CBN beyond their commitments. Katorse. Matanglawin and Rated K!. respectively.97 million or 7% year-on-year to P14. Manila Radio and the Regional Network Group grew by P471. From late September through early October. Bandila. the multi-platform special coverage of typhoons Ondoy and Pepeng on our television and radio network.419 92 Variance Amount 846 60 906 46 % 7 6 7 50 .013 14. the voting public. now numbering more than 60.Umagang Kay Ganda.312 1. the youth especially. to be properly educated about the election process and adequately informed of their choices. Our special coverages and documentaries of issues and events of national importance on our media platforms did more than just deliver relevant news and information. The combined airtime revenues of Channel 2. ABS-CBN posted a 50% primetime audience share and 48% for total day. we were able to implement rate increases in August as recession concerns eased. ABS-CBN solidified its national leadership position based on Taylor Nelson Sofres National Philippines Television Audience Measurement. kept the public informed and connected throughout the harrowing ordeal. leading our nearest competitor with comfortable margins of 14 and 11 percentage points in primetime and total day. a 16 and 17 percentage point lead over our nearest competitor. Volunteer Boto Patrollers. Consolidated advertising revenues grew by P951. Tayong Dalawa. can communicate their stories and submit their content through online and mobile media. and enabled us to harness and channel the generosity and volunteerism of fellow Filipinos and corporations toward affected families and communities through ABS-CBN Foundation’s Sagip Kapamilya. along with the long-running daily noontime show Wowowee and Sunday musical variety program ASAP.Precious Hearts Romances drama mini-series.51 billion in the fourth quarter. Manila Radio and the Regional Network Group. the internet and on mobile. which started in February 2009. Kambal sa Uma.466 953 13. With such compelling and engaging content. iPatrol Mo: Ako Ang Simula campaign launched in June 2009. May Bukas Pa. Audience shares for the period February to December 2009 averaged 49% in primetime (6pm to 11pm) and 45% for total day (6am to 12mn).46 billion. Through the Boto Mo.

Best Friends Forever. reaching 42% of consolidated revenues in 2009 with double-digit growth in the subscription businesses of ABS-CBN Global and in the contribution of Sky Cable. the fastest residential broadband service with speeds of up to 12 Mbps. Australia. ABS-CBN Global’s subscription and other service revenues grew 8% year-on-year in US dollar terms as it delivered 19% growth in sale of services in the fourth quarter of 2009.Consolidated Advertising Revenues 14.58 billion in subscription and other service revenues is P1.538 6. Despite weak economic conditions and depressed consumer spending in major economies worldwide.387 2008 4. ABS-CBN Film Productions.Sky Cable Select. Canada and the Asia-Pacific. Sky Cable is able to offer its subscribers the option to add more channels on an a la carte basis. while Sky Cable’s contribution share increased to 34% with its full-year contribution. Expenses . Driven by strong doubledigit subscriber growth in the United States. the most affordable international voice-calling service. You Changed My Life. overall viewer count increased by 15% to an estimated 2.58 billion in 2008. Consumer Sales (Amounts in million Pesos) ABS-CBN Global Other subsidiaries Consumer sales before Sky Cable Add: Sky Cable consumer sales Consolidated consumer sales Consolidated 2009 5.463 13.804 3. The sale of consumer products such as magazines.16 million worldwide by year-end.568 1.266 1.215 2. the Middle East.72 billion.Ang Tanging Ina ‘Nyong Lahat. ABS-CBN Global’s subscription and service revenues increased by 16% for the full year and by 29% in the fourth quarter of 2009. and Sky Voice. Through digitization and the rollout of the Digibox. In peso terms. to further enhance its product portfolio while complementing its post-paid and pre-paid cable TV services. Four films surpassed P100 million in gross box office receipts. ABS-CBN Global’s contribution share to total consumer sales amounted to 51%.581 8.00 billion or 39% more than its three-quarter revenue contribution of P2. from 29% in 2008 with only three quarters of consumer sales contribution.591 % 15 (7) 9 39 18 Sky Cable’s full-year contribution of P3. and audio and video CDs and DVDs grew 2% in 2009 to P521. To address the cable entertainment needs of a broader segment of the market. Consumer sales in 2009 rose by P1.511 952 7 Consumer Sales Consumer sales in the fourth quarter of 2009 rose by P354.47 million or 15% to P2.647 6. Sky Cable introduced its lowpriced post-paid cable TV package at only P280 a month -. Our fast-growing consumer sales businesses continued to increase their contribution to total revenues in 2009. Sky Cable expanded its product portfolio with the launch of Sky Broadband. and In My Life. Sky Cable also offered the country’s first pre-paid cable TV packages and the first HD cable TV content with Sky Cable HD.796 Variance Amount 698 (109) 589 1. the local industry’s benchmark for a blockbuster hit -.39 billion.583 10. an 18% rise over 2008 consumer sales of P8.80 billion. Inc. released nine films in 2009 and maintained its leadership in local film production.59 billion to P10.13 million with ABS-CBN Global accounting for 42% of total.002 1.

606 2. rose by P1. Efforts to contain cost increases by limiting the number of taping days brought other program expenses lower by P79.342 6. mostly from increases in cost of sales and services.154 4.676 174 17. coming from higher cost of sales in line with subscription revenue growth.17 billion.28 billion expense contribution over three quarters in 2008.708 1.52 billion or 13% year-on-year to P22.287 2008 2.383 1.71 billion in 2008. prior to Sky Cable’s consolidation.38 billion or 8% to P18.092 956 4.287 5. Total expenses. drama.515 % 2 15 10 5 8 8 50 13 Sky Cable’s full-year expense contribution of P3. and performance pay.595 4. from P2.42 billion is P1.729 2. Production Costs (Amounts in million Pesos) Personnel expenses and talent fees Facilities-related expenses Other program expenses Sub-total: Cash production costs Non-cash production costs Consolidated production costs Consolidated 2009 2. and entertainment news programs in the afternoon and primetime blocks resulted in personnel expenses and talent fees increasing by P191. other expenses. personnel expenses and contracted services. structural pay adjustments to keep compensation packages competitive.819 188 18. The increase in personnel expenses are due to CBArelated increases. with an additional quarter of expenses from Sky Cable.283 19.398 6. The addition of locally-produced comedy.170 875 4.38 million or 8% year-on-year to P875.874 3. Total Expenses (Amounts in million Pesos) Production Costs General and Administrative Expenses Cost of Sales and Services Revenue deductions Other expenses (income) Expenses before Sky Cable Add: Sky Cable expenses Total expenses Consolidated 2009 6.40 billion.90 billion.04 million or 2% to P6.99 billion in 2009.404 2008 6. Production Costs Total production costs in 2009 rose by only P133.989 3.900 1.13 billion or 50% more than its P2. and from general and administrative expenses particularly.415 22.945 1. driven mostly by higher costs of sales and services and general and administrative expenses (GAEX). Facilities-related expenses likewise increased by only 7% year-on-year to P1.44 million. benefiting from production process improvements and tighter control of production-related expenses.132 2.154 Variance Amount 192 78 (81) 189 (56) 133 % 7 7 (8) 4 (4) 2 .Total expenses grew by P2.29 billion.756 1. as it expanded its pre-paid cable TV and broadband services business.889 Variance Amount 133 722 370 143 14 1.099 2.94 million or only 7% yearon-year to P2.

Cost of Sales and Services Cost of sales and services before Sky Cable grew by only 10% or P369.729 1.72 million.lower than 2008’s increase of 18% -.574 525 4.88 million to P4. while non-cash GAEX of P724.236 3.645 6.230 499 3. Sky Cable’s cost of sales and services contribution in 2009 is for the full year.099 2.60 billion.969 5.30 million or 11% in peso terms.213 121 471 520 187 Variance Amount 549 12 (8) 80 (10) % 25 10 (2) 15 (5) . which is attributable to higher production and satellite transmission costs.75 billion -. or also 15% higher than last year. ABS-CBN Global’s GAEX went up by 4% in peso terms but is down by 3% in US dollar terms.58 million increase in total cost of sales and services (cash and non-cash) of other subsidiaries to P1.86 million or 15% higher than in 2008. ABS-CBN Global’s cost of sales rose by P233. mostly from increases in personnel expenses in free TV and radio operations. offset by lower merchandise costs and termination costs for telecommunication services.97 billion cost of sales and services for nd th three quarters (2 to 4 ) in 2008. cost of sales of ABS-CBN Global went up by only 4%.046 11 5 10 34 18 Total cost of sales and services reached P6. The 8% or P132. well below the growth of its sale of services and goods.74 million higher than the P1.is largely attributable to reduced cable channels program rights amortization and facilities-related expenses.Non-cash production costs are also 4% lower at P1. and from higher depreciation and an increase in contracted services fees of ABS-CBN Global. General and Administrative Expenses General and Administrative Expenses (GAEX) before Sky Cable posted a 15% or P721. an increase of P1. due to lower amortization of program rights.338 1.74 billion.05 billion or 18% year-on-year with Sky Cable’s P2.65 billion cost of sales and services included.34 billion.105 1. and is 35% or P675.698 Variance Amount % 233 11 111 10 344 26 370 676 1.58 million increase to P5.87 billion for the full year is P623. In US dollar terms.762 133 463 600 177 2008 2.10 billion. Cash GAEX before Sky Cable of P4.125 3. Cost of Sales and Services (Amounts in million Pesos) ABS-CBN Global Other subsidiaries Sub-total: Cash cost of sales and services before Sky Cable Non-cash cost of sales and services before Sky Cable Cost of sales and services before Sky Cable Add: Sky Cable cost of sales and services Consolidated cost of sales and services Consolidated 2009 2.48 million is P97.744 2008 2. General and Administrative Expenses (Amounts in million Pesos) Personnel expenses Advertising and promotions Facilities-related expenses Contracted services Taxes and licenses Consolidated 2009 2.

558 1.23 million or 1% higher year-on-year. taxes.592 745 3. Capital Expenditures Capital expenditures and film and program rights acquisitions in 2009 amounted to P2. and yielding an EBITDA margin of 26% for 2009. consolidated GAEX amounted to P6.874 698 5.79 billion in 2009. Capital expenditures increased by P232.91 million. digital media asset archiving and management equipment.65 million better than 2008 EBITDA of P6.337 2008 1. net income attributable to shareholders for 2009 (after minority interest) is P1. of which P692.12 million mainly as a result of reduced program acquisitions for cable channels. broadcast network infrastructure upgrade and expansion. amusement and recreation Other expenses Sub-total: Cash GAEX before Sky Cable Non-cash GAEX before Sky Cable GAEX before Sky Cable Add: Sky Cable GAEX Consolidated GAEX 90 645 4.51 billion.31 billion posted in 2008.03 million or 11% year-on-year to P2. Depreciation increased by 15% resulting from investments in production equipment and broadcast network infrastructure.525 562 3. Non-cash Expenses (Amounts in million Pesos) Depreciation Amortization Non-cash expenses before Sky Cable Add: Non-cash expenses of Sky Cable Consolidated non-cash expenses Net Income and EBITDA Core net income reached P1.73 million.38 billion.349 1.Entertainment.176 2.349 100 634 4. Amortization went down by 12% or P142. Consolidated 2009 1. Non-cash Expenses Non-cash expenses rose slightly by 3% or P66. an improvement of 23% or P318.087 Variance Amount % 209 15 (142) (12) 67 3 183 33 250 8 . while P61.11 billion. Earnings before interest. cable network conversion to digital signal delivery and broadband services expansion. depreciation and amortization (EBITDA) reached P6. After deducting an P85.595 754 6. 37% or P481 million higher than the P1. just P33.59 billion.35 billion.70 billion.02 million are non-cash.870 725 5.89 million are cash GAEX. 7% or P405.40 million or 14% higher than in 2008. With Sky Cable’s additional operating expenses.246 628 4. for production equipment upgrades and replacement. P776.034 2.95 billion.93 million over 2008’s net income attributable to shareholders of P1. to P2.36 billion.572 (10) 11 624 97 721 56 777 (10) 2 15 15 15 8 14 Sky Cable’s full-year contribution to total GAEX amounted to P753.25 million accounting adjustment required under Philippine Financial Reporting Standard 3 (relating to the recognition of amortised intangible assets relating to the consolidation of Sky Cable in April 2008).

19 billion trade accounts receivables at the end of 2008.Film and program rights acquisitions went down by 25% or P198. In 2009.00 million are short term bank loans with about 5% annual interest.72 billion.41x at the end of 2008.00 million of short-term bank loans.15 billion shareholders’ equity at the end of 2008. P400.34 billion is P813.82 billion.79 billion is P600. 2008. to P584. The company’s debt and coverage ratios remain well within the limits prescribed under its loan covenants. Balance Sheet Accounts As at December 31. ABS-CBN borrowed P400. is just 1 day longer than the 69 days as at December 31.93 billion are bullet payment loans falling due between 2011 and 2014. The remainder of about P5.01 billion or 7% higher than the P15. Consolidated trade receivables stood at P5. P1. Total interest-bearing loans increased by about P249. The company’s net debt-to-equity ratio improved to 0.78 billion or 5% higher than yearend 2008 total assets of P33. Shareholders’ equity stood at P16. STATEMENT OF MANAGEMENT’S RESPONSIBILITYFOR FINANCIAL STATEMEN .40 million or 14% higher than the P4. P679.04 billion. 2009.35x as a result of higher cash and cash equivalents versus 0. Days sales outstanding of 70 days.80 million.31 million of their outstanding debt. total consolidated assets stood at P34. Cash and cash equivalents of P3. Of this amount. P1. even as trade accounts receivables of P4.00 million for working capital needs and paid down P338.39 million or 13% higher than as at the end of 2008.71 billion a year ago.96 billion versus P8.63 million or 3% to P8. while Sky Cable borrowed P500.00 million of long-term funds for capital expenditures and paid down P212.82 million in 2009 mainly as a result of lower program acquisitions for cable channels.50 million or 32% higher than the year-end 2008 balance.63 billion are amortising loans. while P2.15 billion.

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2010 and 2009 and Independent Auditors’ Report SyCip Gorres Velayo & Co. 2011. 2011 and 2010 and Years Ended December 31. .ABS–CBN Corporation and Subsidiaries Consolidated Financial Statements December 31.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management. 0012-FR-2 INDEPENDENT AUDITORS’ REPORT The Stockholders and the Board of Directors ABS-CBN Corporation We have audited the accompanying consolidated financial statements of ABS-CBN Corporation and Subsidiaries. whether due to fraud or error. 2011 and 2010. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits.sgv. which comprise the consolidated statements of financial position as at December 31. We conducted our audits in accordance with Philippine Standards on Auditing.ph BOA/PRC Reg. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. No. statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31. the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances.com.SyCip Go rres Velayo & Co. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. 0001 SEC Accreditation No. 2011. whether due to fraud or error. A member firm of Ernst & Young Global Limited *SGVMC214977* . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. including the assessment of the risks of material misstatement of the consolidated financial statements. statements of comprehensive income. but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards. The procedures selected depend on the auditor’s judgment. and the consolidated statements of income. as well as evaluating the overall presentation of the consolidated financial statements. In making those risk assessments. and a summary of significant accounting policies and other explanatory information. 6760 Ayala Avenue 1226 Makati City Philippines Phone: (632) 891 0307 Fax: (632) 819 0872 www.

2012. valid until March 3. Cerrado Partner CPA Certificate No. 2011 in accordance with Philippine Financial Reporting Standards. 2010. the consolidated financial statements present fairly. 0113-AR-2 (Group A). 2013 Tax Identification No. March 4. June 1. 2009. 86735 SEC Accreditation No. 129-433-783 BIR Accreditation No. January 2. 2012 *SGVMC214977* . and their financial performance and their cash flows for each of the three years in the period ended December 31. Makati City March 2. 2011 and 2010. in all material respects. 3174586. Aldrin M. SYCIP GORRES VELAYO & CO. 2012 PTR No. valid until May 31. the financial position of ABS-CBN Corporation and Subsidiaries as at December 31. 08-001998-45-2009.-2Opinion In our opinion.

ABS-CBN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts in Thousands)

December 31 2011 ASSETS Current Assets Cash and cash equivalents (Note 6) Trade and other receivables (Notes 7 and 22) Inventories (Note 8) Program rights and other intangible assets (Note 12) Other current assets (Note 9) Total Current Assets Noncurrent Assets Property and equipment (Notes 10, 18 and 30) Goodwill (Notes 4 and 16) Program rights and other intangible assets - net of current portion (Note 12) Available-for-sale investments (Note 13) Investment properties (Notes 11 and 18) Investments in associates (Note 14) Deferred tax assets - net (Note 28) Other noncurrent assets (Note 15) Total Noncurrent Assets P8,635,053 = 8,128,166 134,867 576,699 1,016,047 18,490,832 15,242,115 3,749,496 3,595,881 264,892 57,796 41,084 689,173 2,676,807 26,317,244 P44,808,076 = = P5,821,334 7,248,284 152,527 770,493 589,252 14,581,890 15,195,293 2,143,832 2,740,423 265,066 58,912 41,113 961,391 2,970,930 24,376,960 = P38,958,850 2010

LIABILITIES AND EQUITY Current Liabilities Trade and other payables (Notes 4, 17 and 22) Interest-bearing loans and borrowings (Notes 10, 11 and 18) Obligations for program rights (Note 19) Income tax payable Total Current Liabilities Noncurrent Liabilities Interest-bearing loans and borrowings - net of current portion (Notes 10, 11 and 18) Accrued pension obligation (Note 29) Deferred tax liabilities (Note 28) Convertible note (Note 4) Obligations for program rights - net of current portion (Note 19) Other noncurrent liabilities (Notes 4, 20 and 22) Total Noncurrent Liabilities P9,078,164 = 663,101 606,597 171,086 10,518,948 = P9,303,464 675,691 607,365 109,649 10,696,169

11,848,780 889,308 438,055 211,389 97,808 468,130 13,953,470 24,472,418

8,967,022 625,406 442,681 – 96,478 385,588 10,517,175 21,213,344

(Forward)

*SGVMC214977*

-2December 31 2010 = P779,583 725,276 (313,752) 110,005 17,449,596 (1,154,064) 17,596,644 148,862 17,745,506 = P38,958,850

2011 Equity Attributable to Equity Holders of the Parent Company Capital stock (Note 21) Additional paid-in capital Cumulative translation adjustments Unrealized gain on available-for-sale investments (Note 13) Retained earnings (Note 21) Philippine depository receipts convertible to common shares (Note 21) Noncontrolling Interests (Notes 4 and 16) Total Equity

P779,583 = 725,276 (358,536) 119,823 18,232,540 (1,164,146) 18,334,540 2,001,118 20,335,658 P44,808,076 =

See accompanying Notes to Consolidated Financial Statements.

*SGVMC214977*

ABS-CBN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Amounts)

Years Ended December 31 2010 2009 (As restated - (As restated Note 2) Note 2) 2011 NET REVENUES Airtime (Notes 22 and 23) Sale of services (Notes 22, 23 and 30) Sale of goods (Note 23) PRODUCTION COSTS (Notes 10, 12, 22, 24, 29 and 30) COST OF SERVICES (Notes 10, 12, 22, 25, 29 and 30) COST OF SALES (Notes 10, 22, 25, 29 and 30) GROSS PROFIT General and administrative expenses (Notes 7, 10, 11, 12, 22, 26, 29 and 30) Finance costs (Notes 18 and 27) Interest income (Note 6) Foreign exchange gain (loss) - net Equity in net earnings (losses) of associates (Note 14) Other income - net (Notes 4, 13, 18, 22, 27, 30 and 32) INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX (Note 28) NET INCOME Attributable to: Equity holders of the Parent Company (Note 33) Noncontrolling interests P14,793,465 = 9,795,453 457,658 25,046,576 (9,834,966) (6,425,499) (274,526) 8,511,585 (7,091,456) (726,871) 177,061 (43,508) (29) 1,967,810 2,794,592 287,429 P2,507,163 = = P17,695,929 9,684,850 478,897 27,859,676 (7,865,277) (6,791,186) (278,396) 12,924,817 (8,192,045) (1,042,849) 106,738 218,231 142 329,887 4,344,921 1,107,710 = P3,237,211 = P11,994,723 9,693,610 521,128 22,209,461 (6,286,787) (6,760,279) (287,127) 8,875,268 (6,224,600) (912,911) 93,291 90,119 (2,330) 524,604 2,443,441 684,055 = P1,759,386

P2,420,072 = 87,091 P2,507,163 =

= P3,178,631 58,580 = P3,237,211

= P1,702,397 56,989 = P1,759,386

Basic/Diluted Earnings per Share Attributable to Equity Holders of the Parent Company (Note 33)
See accompanying Notes to Consolidated Financial Statements.

P3.207 =

= P4.211

= P2.225

*SGVMC214977*

NET OF TAX Attributable to: Equity holders of the Parent Company Noncontrolling interests P2.ABS-CBN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Thousands) 2011 NET INCOME OTHER COMPREHENSIVE INCOME Exchange differences on translation of foreign operations Unrealized fair value gain on available-for-sale investments (Note 13) OTHER COMPREHENSIVE INCOME (LOSS).386 (44.966) P2.472.163 = Years Ended December 31 2010 2009 = P3.071.211 = P1.197 = (177.243 58.989 = P1.106 = 87.385.540 See accompanying Notes to Consolidated Financial Statements.013.890.890.154 = P1.405 131.833.551 56.071.759.784) 9.823 56.237.507.749 74.472.762 (165.540 P2.091 P2.823 = P1. NET OF TAX TOTAL COMPREHENSIVE INCOME.580 = P3.388) = P3.197 = = P3. *SGVMC214977* .818 (34.150) 11.

150) – – – – (P313.082) – P18.000 = P9.276 – – – – – – – = P725.397 (687.005) = P104.300.702.702.507.324) = – – – – (178.072 (34.900 – (P1.276 = – – – – – – P725.506 = P15.748) = P17.583 – – – – – – – = P779.080 3.427) – – – = P6.644 = P15. 2010 Net income Other comprehensive income Total comprehensive income Cash dividends declared Acquisitions of PDRs Issuances of PDRs Decrease in noncontrolling interests At December 31.211 (165.154 1.300.702.178.082) – – – P8.000 = P8.583 = = P779.724) = – – – – (996. 2010 At January 1.071.752) = – (44.472.165 P2.082) 1.388) 3.427) (178.351) = – 56.147.989 – 56.631 (165.046 56.300.637.900 – = P17.397 131.765.339) (996.080.427) (178.765.146) = = P8.631 – 3.128) (10.749 – – – – (P136.049.001. 2010 AND 2009 (Amounts in Thousands) Attributable to Equity Holders of the Parent Company Unrealized Gain on Availablefor-Sale Investments (Note 13) P110.523) 1.823 (865.745.385.339) – – – = P9.356 1.149.388) 3.762 11.602) = Total P17.276 = = P725.536) = (P136.821.154.000 = P9.000 = P6.304 (P553.420.243 (865.658 = = P16.862 = 87.276 Cumulative Translation Adjustments (P313.602) = – (177.123 (20.128) (10.989 – – – (20.745.551 (687.091 – 87.583 = P779.150) (177.596 = P5.724) = Noncontrolling Interests Total Equity At January 1.540 = = P16.276 – – – – – – – = P725.966) 2.596.128) – – – (10. 2011 At January 1.240) 395. 2009 Capital Stock (Note 21) P779.049.163 (34.030 58.334 1.405 74.237.596 = (P1.005 = – 9.091 – – 1.637.583 Additional Paid-in Capital P725. 2011.644 = 2.900 (13.118 = = P104.110 See accompanying Notes to Consolidated Financial Statements.165 P20.178.240) 395.580 – – – (13.153.540 (687.833.631 (865.106 (1.540 = (P1.154 1.823 = = P98.178.818 9.000 – – – – – – – = P8.966) 2.123 – = P16.335.405 – – – – = P98.240) 395.149.300.932.080 P148.276 = P725.583 – – – – – – – = P779.506 = 2.523) 1.000 – – – – – – – = P8.304 3.300. 2009 Net income Other comprehensive income Total comprehensive income Cash dividends declared Acquisitions of PDRs Issuances of PDRs Decrease in noncontrolling interests (Note 4) At December 31.153.784) – – – (P358.300.523) 1.154.818 – – – P119.072 – – (1.030 P17.064) = – 2.123 – (P553.334.762 – – – – = P110.013. 2011 Net income Other comprehensive income Total comprehensive income Cash dividends declared Acquisitions of PDRs Increase in noncontrolling interests At December 31.420.397 – 1.064) = (P376.784) (44.402 1.164.836.759.838 – 74.583 = – – – – – – P779.637.072 – – – – – 2.005 = P23.005) = P16.243 Philippine Depository Receipts (PDRs) Retained Earnings Convertible to Appropriated Unappropriated Common Shares (Note 21) (Note 21) (Note 21) P8.110 3.596.752) = (P193.890.386 131.580 – 58.836.243 – 11.197 (1.749 56.748) = P148.ABS-CBN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31.420.862 = P67.339) (996. *SGVMC214977* .

769) 5.064) (11.816) – – (2.net (Note 27) Income before working capital changes Provisions for: Doubtful accounts (Note 26) Other employee benefits Decline in value of inventory Decrease (increase) in: Trade and other receivables Other current assets Increase (decrease) in: Trade and other payables Obligations for program rights Other noncurrent liabilities Contribution to pension plan (Note 29) Cash generated from operations Income taxes paid Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Additions to: Property and equipment (Notes 10 and 34) Program rights and other intangible assets (Notes 12 and 34) Increase in noncontrolling interests (Note 4) Proceeds from sale of investments.484) 1.455 254.316) 29 – 6.021) (7.795) 6.711 (177.929) (160.570 = P2.921 2.588.252.863) 1.165 1.470.578 99.575.720 (372.839.443.969 (1.936) (17.738) – (134.271 16.229) 3.054) (527.894) 3.947 209.794.969 698.020.330 1.716) 1.ABS-CBN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in Thousands) 2011 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation and amortization (Notes 10 and 11) Gain on sale of investments (Note 27) Amortization of: Program rights and other intangibles (Note 12) Deferred charges (Note 15) Debt issue costs (Note 27) Interest expense (Note 27) Provision for pension expense (Note 29) Interest income (Note 6) Gain on settlement of a liability (Note 27) Net unrealized foreign exchange gain Loss (gain) on sale of property and equipment Equity in net losses (earnings) of associates Mark-to-market loss on derivative instruments .780 32.361.765.183 56.945 915.291) – (122.646.641) 7.497 (273.435) (740.283 (3.010) (716.922) (933.970 2.793 (374.061) (143.179 46.398.236 329.525 (106.461 508.133 – (1.257.472 123.812 351.598) (1.211 (1. net of cash of subsidiary disposed (Note 4) (Forward) P2.368 – 1.344.109.742) 350.750 420.232 (637.440) (1.108.447) (368.118.353.637 292.616) (43.399) 2.233 6.484) (78.146.912.298) (342.919 (93.093.488 (117.075 852.463 2.372 52.518.095.980) 434 (142) – 9.510 31.815) 9.037.706.712 135.268 (3.441 2.406 (987.670.092 (1.612) 331.033.213 5.023 – 1.937) – – *SGVMC214977* .366.286.592 = Years Ended December 31 2010 2009 = P4.

377 (1.184) = P– (193.459 – 217.990 1.900 – (1.-2Years Ended December 31 2010 2009 2011 Acquisition of subsidiaries.269.123 – (1.200 2.719 5.769) (119.752) 89.670. net of cash acquired (Note 4) Decrease (increase) in other noncurrent assets Proceeds from sale of: Property and equipment Investment in bonds Interest received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from: Long-term debt Bank loans Payments of: Dividends Interest Bank loans Long-term debt Obligations under finance lease Acquisition of Philippine depository receipts (PDRs) (Note 21) Settlement of derivatives (Note 32) Issuances of: PDRs (Note 21) Convertible note Net cash provided by (used in) financing activities EFFECTS OF EXCHANGE RATE CHANGES AND TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 6) See accompanying Notes to Consolidated Financial Statements.289.123 (3.807) (610.680 – 108.523) 14.524.831) (10.889 96.342 108.000) (112.497 2.565.813.821.291 (3.483.334 P8.254 = P3.000) (7.175) 3.635.751 *SGVMC214977* .709) = P782 330.484 21.751 = P5.077.858) = (408. (P352.600) (259.904.950) (903.166) (904.398) 900.337.350) 981.082) – – 211.337.880) (178.212.334 (14.083 532.146) (996.000 (682.389 918.595 2.000 (828.541.704) 14.583 3.960 7.053 = 30.106) (104.821.095) (737.255 – (1.087) 813.432) (39.532) (132.154.723) (400.000 400.240) – 395.

PFRS includes statements named PFRS and Philippine Accounting Standards (PAS) and Philippine Interpretations issued by the Financial Reporting Standards Council (FRSC). the Philippine Securities and Exchange Commission (SEC) approved the said extension. per share amounts and when otherwise indicated.ABS-CBN CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Amounts in Thousands Unless Otherwise Specified) 1. and film distribution. On July 27. The registered office address of the Parent Company is Mother Ignacia Street corner Sgt. The common shares of ABS-CBN were listed beginning July 8. audio recording and distribution. movie production. internet and mobile services and publishing. 2012.. The Parent Company is 57%-owned by Lopez. All values are rounded to the nearest thousand. 1994. Quezon City. the Board of Directors (BOD) approved the extension of the corporate term of the Parent Company for another 50 years from April 20. which is the functional and presentation currency of the Parent Company. On June 17. 1994. 2010. a Philippine entity. Esguerra Avenue. 1992 and have been traded in the Philippine Stock Exchange (PSE) since then. Other activities of the subsidiaries include merchandising. Corporate Information ABS-CBN Corporation (“ABS-CBN” or “Parent Company”) is incorporated in the Philippines on July 11. Summary of Significant Accounting and Financial Reporting Policies Basis of Preparation The consolidated financial statements of ABS-CBN and all its subsidiaries (collectively referred to as “the Company”) have been prepared on a historical cost basis. The consolidated financial statements are presented in Philippine peso. except for number of shares. the ultimate parent company. 1994. On August 16. video/audio post production. 1946. the Philippine SEC approved the change in the Parent Company’s corporate name from ABS-CBN Broadcasting Corporation to ABS-CBN Corporation. The Parent Company’s core business is television and radio broadcasting. Inc. Its subsidiaries and associates are involved in the following related businesses: cable and direct-tohome (DTH) television distribution and telecommunications services overseas. 2. The accompanying consolidated financial statements were approved and authorized for issuance by the BOD on March 2. Statement of Compliance The consolidated financial statements of the Company were prepared in compliance with Philippine Financial Reporting Standards (PFRS). except for available-for-sale (AFS) investments that have been measured at fair value. *SGVMC214977* .

*SGVMC214977* . deal primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The amendment is applicable if the rights are given pro rata to all of the existing owners of the same class of an entity’s non-derivative equity instruments.-2Changes in Accounting Policies and Disclosures The accounting policies adopted are consistent with those of the previous financial year.Classification of Rights Issues (effective for annual periods beginning on or after February 1. Prepayments of a Minimum Funding Requirement (effective for annual periods beginning on or after January 1. The Company. Improvements to PFRS (Issued in 2010) Improvements to PFRSs. Related Party Disclosures (effective for annual periods beginning on or after January 1. however. 2011) PAS 24 clarifies the definitions of a related party. The amendments to PFRS 3 are effective for annual periods beginning on or after 1 July 2011. Only components of non-controlling interest that constitute a present ownership interest that entitles their holder to a proportionate share of the entity’s net assets in the event of liquidation should be measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets. All other components are to be measured at their acquisition date fair value. The adoption of the following amendments resulted in changes to accounting policies but did not have any impact on the financial position or performance of the Company. Except as otherwise indicated. 2011 and changed its accounting policy accordingly as the amendment was issued to eliminate unintended consequences that may arise from the adoption of PFRS 3. with retrospective application) The amendment removes an unintended consequence when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover such requirements. The Company is not subject to minimum funding requirements in the Philippines. The amendment permits a prepayment of future service cost by the entity to be recognized as a pension asset. to acquire a fixed number of the entity’s own equity instruments for a fixed amount in any currency. adopted these as of January 1. § Philippine Interpretation IFRIC 14 (Amendment). Financial Instruments: Presentation . jointly controlled or significantly influenced by the same government as the reporting entity. § PAS 32 (Amendment). the amendment introduces an exemption from the general related party disclosure requirements for transactions with government and entities that are controlled. The new definitions emphasize a symmetrical view of related party relationships and clarify the circumstances in which persons and key management personnel affect related party relationships of an entity. an omnibus of amendments to standards. 2011. Business Combinations: The measurement options available for non-controlling interest were amended. In addition. adoption of the new and amended PFRS and Philippine Interpretations has no impact on the Company’s consolidated financial statements. § PFRS 3. § PAS 24 (Amendment). 2010) The amendment alters the definition of a financial liability in PAS 32 to enable entities to classify rights issues and certain options or warrants as equity instruments. except for the adoption of the following new and amended PFRS and Philippine Interpretations that became effective during the year.

Prior to 2011. Interim Financial Statements The following interpretation and amendments to interpretations did not have any impact on the accounting policies. Financial Instruments . the Company changed the presentation of outbound telecommunication revenues to gross amount before charges billed to the Company. In 2011. *SGVMC214977* . outbound telecommunication revenues are presented net of the share of other carriers. respectively. financial position or performance of the Company: § § Philippine Interpretation IFRIC 13. The Company made this change to present outbound telecommunication revenue on a gross basis to align the Company’s presentation of outbound telecommunication revenues with the predominant global practice in the telecommunications industry. The change pertains to presentation only and it has no impact on the Company’s net income. financial position or performance of the Company: § § § § PFRS 3. by other carriers. Business Combinations [contingent consideration arising from business combination prior to adoption of PFRS 3 (as revised in 2008)] PFRS 3. Customer Loyalty Programmes (determining the fair value of award credits) Philippine Interpretation IFRIC 19. Business Combinations (un-replaced and voluntarily replaced share-based payment awards) PAS 27. 2010 and 2009.Disclosures: The amendment was intended to simplify the disclosures provided by reducing the volume of disclosures around collateral held and improving disclosures by requiring qualitative information to put the quantitative information in context. PAS 1. = = with a corresponding increase in expenses for the same amount. The Company reflected the revised disclosure requirements in Notes 31 and 32. where applicable. interconnection costs are then presented as separate line item in the expenses section under “Cost of services” account. cash flows and statement of financial position. In doing so. restated the comparative consolidated statement of income. The Company provided the analysis in the consolidated statement of changes in equity. Consolidated and Separate Financial Statements PAS 34. § Other amendments resulting from the 2010 improvements to PFRSs to the following standards did not have any impact on the accounting policies. Extinguishing Financial Liabilities with Equity Instruments Change in Presentation of Consolidated Statement of Income. The Company accounted for the change retroactively and accordingly. Presentation of Financial Statements: The amendment clarifies that an entity may present an analysis of each component of other comprehensive income maybe either in the statement of changes in equity or in the notes to the financial statements. Revenues increased by P105 million and P179 million for the years ended December 31.-3§ PFRS 7.

0 98.0 100. more than 50% of the voting rights of an entity’s capital stock.0 100. (ABS-CBN Cayman Islands Global) (a) (j) ABS-CBN Europe Ltd. Inc. UAE Philippines Budapest.(j) (k) ABS-CBN Telecom North America. (e) ABS-CBN Global Cargo Corporation ABS-CBN Film Productions.0 – 100.0 100.0 100.0 100.support USD Australian dollar (AUD) Canadian dollar (CAD) USD USD CAD European monetary union (EUR) Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Singapore dollar (SGD) Philippine peso Effective Interest 2010 2009 2011 100. Ltd. UAE Dubai.0 100.money Philippine peso remittance Holding company USD Principal Activities Holding company Cable and satellite programming services Cable and satellite programming services Cable and satellite programming services Services . (ABS-CBN Films) ABS-CBN Integrated and Strategic Property Holdings. USA Victoria.0 100.money remittance Telecommunications Services . USA California. (d) United Kingdom (j) (u) ABS-CBN Japan.0 100.0 100.0 100. Inc.0 100. Ltd. (ABS-CBN International) (j) (n) ABS-CBN Australia Pty.0 100.0 100.0 100.0 100. (j) (m) Creative Programs. (ABSCBN Publishing) Culinary Publications.0 100.0 100. (j) (k) ABS-CBN Canada Remittance Inc. (ABS-CBN Netherlands) (j) (n) ABS-CBN Center for Communication Arts.0 100.0 100.0 100.0 100. (ABS-CBN Australia) (j) (k) ABS-CBN Canada. 2010 and 2009: Place of Company Incorporation ABS-CBN Global Ltd. Inc.0 100.0 100. USA Functional Currency United States dollar (USD) Cable and satellite Great Britain pound programming services (GBP) Services . 2011.0 100. Hungary California.0 70.0 100. (g) ABS-CBN Shared Service Center PTE. Inc. Inc. Netherlands Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Singapore Philippines Philippines Philippines Philippines ABS-CBN Global Netherlands B.0 100.0 100.0 100.post production Holding company Holding company Philippine peso Philippine peso Philippine peso (q) (see Note 4) Philippines *SGVMC214977* .0 100.0 100.0 100.0 100.0 100.production Philippine peso Services . (ABSCBN Multimedia) (f) ABS-CBN Publishing.0 100. (b) ABS-CBN Global Hungary Kft. (n) (r) (j) Canada Amsterdam. Inc.0 100.0 100.money remittance Intermediate holding and financing company Educational/training Non-vessel operations common carrier Movie production Real estate Services . (ABSCBN Interactive) ABS-CBN Multimedia.0 100. Inc. Inc.9 100.0 100.0 100. Australia Canada California. (Roadrunner) (see Note 4) Sapientis Holdings Corporation (Sapientis) (see Note 4) Columbus Technologies.9 – – ABS-CBN International. ULC (ABS-CBN Canada) (j) (k) ABS-CBN Global Remittance Inc.0 100. Inc. (ABS-CBN Hungary) (j) (l) Japan Dubai.0 100. either directly or indirectly.0 100.0 98. Inc.0 100. Inc.0 100.0 100.0 100.-4Basis of Consolidation and Noncontrolling Interests The consolidated financial statements include the financial statements of the Parent Company and its subsidiaries as of December 31 each year.0 100.0 100.0 100.0 – 100.money GBP remittance Cable and satellite Japanese yen (JPY) programming services Cable and satellite USD programming services Trading USD Services .0 100. (ABS-CBN United Kingdom Europe) (b) (c) (j) ABS-CBN Europe Remittance Inc.0 100.0 100. which ABS-CBN controls as of December 31.0 100.0 100.0 100.0 100.V.0 100. (CPI) Professional Services for Television & Radio. Inc. Control is normally evidenced when the Parent Company owns.0 100.0 100. (CTI) Content development and programming services Services . Roadrunner Network.interactive media Digital electronic content distribution Print publishing Print publishing Services .0 100.0 100.0 100. Following is a list of the subsidiaries or companies. Inc.0 100. ABS-CBN Interactive. Inc.0 100.0 100.0 100.0 100.0 100.0 100.0 100. Inc.0 100.0 – 100. (ABS-CBN Japan) (d) (j) ABS-CBN Middle East FZ-LLC (ABS-CBN Middle East) (b) (j) ABS-CBN Middle East LLC (b) (j) E-Money Plus.0 – 100.0 100.

(h) (o) (t) Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippines Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso 100.3 79. (h) Isla Cable TV.3 79.7 72.6 HM Cable Networks.3 79.3 79. (h) (o) (p) Suburban Cable Network.3 52. (h) Cavite Cable Corporation (h) Cepsil Consultancy and Management Corporation (h) Davao Cableworld Network.3 79. Incorporated (SCHI) (h) Sun Cable Systems Davao.8 73. (h) (o) (p) Discovery Cable.0 100. (h) Sun Cable Holdings.3 79.2 55.7 56.0 100.3 79. Inc.0 100.7 53.3 79. Inc.7 56.3 47.3 79.9 51.0 100.0 100. (MTI) (q) (s) (see Note 4) Sarimanok News Network.7 56. Inc. Inc.7 56.3 79. (h) Pacific CATV. Sky Cable Corporation (Sky Cable) (see Note 4) Bisaya Cable Television Network.0 100.4 51.0 79.3 47. Inc. Inc.0 100.3 79. (h) Moonsat Cable Television.0 100.0 Company Multi-Media Telephony.6 100.3 79.0 100. Star Songs. Inc.7 56. (Studio 23) The Big Dipper Digital Content & Design.3 50. (h) (t) Home-Lipa Cable. (Big Dipper) TV Food Chefs. (h) (t) (a) (b) With branches in the Philippines and Taiwan Through ABS-CBN Global (c) With branches in Italy and Spain (d) Subsidiary of ABS-CBN Europe (e) Nonstock ownership interest (f) Through ABS-CBN Interactive (g) Through ABS-CBN Publishing (h) Through Sky Cable (i) Subsidiary of SCHI (j) Considered as foreign subsidiary (k) Subsidiary of ABS-CBN International (l) With a branch in Luxembourg (m) With a regional operating headquarters in the Philippines (n) Through ABS-CBN Hungary (o) Subsidiary of PCC (p) Through Pacific (q) Through Sapientis *SGVMC214977* .5 100.7 56.3 79. (h) (i) Sunvision Cable.5 47.7 34.6 79.0 100.3 79. Inc.3 79.7 56.7 56. content licensing and transmission Services .2 55. Inc.3 74.0 100.0 100. (h) (o) Pilipino Cable Corporation (PCC) (h) Satellite Cable TV.7 56.3 79. (Pacific) (h) (o) First Ilocandia CATV. Inc.2 72. Inc.3 75.-5Place of Incorporation Philippines Philippines Philippines Philippines Philippines Philippines Functional Currency Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Philippine peso Effective Interest 2010 2009 2011 – – 66.3 75.3 79.7 56.0 100.restaurant and food Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Holding company Cable television services Cable television services Cable television services Holding company Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Cable television services Star Recording.2 72.6 39.2 72.3 79. Principal Activities Telecommunication Content development and programming services Audio and video production and distribution Music publishing Content development and programming services Digital film archiving and central library.6 79. Inc. Inc. Inc. (h) (i) Bright Moon Cable Networks. (h) Telemondial Holdings.9 53.3 79.7 56.3 79. (h) Tarlac Cable Television Network. (h) HM CATV.7 56. Inc.3 79. Inc. Inc.7 56.3 79. Inc.5 47. Inc. Inc.2 72. Inc.6 51.3 79.0 100.7 56.3 79.0 79.0 100.3 79. Inc. Inc.7 72.3 79.3 79.5 73.3 79. (h) (o) Mactan CATV Network.3 79. (h) Hotel Interactive Systems. Inc. Inc.7 56. Inc. Studio 23.7 56. (h) (i) JMY Advantage Corporation (h) Cebu Cable Television. Inc.7 56.3 79.0 56.

Prior to January 1. as appropriate. Consolidation of subsidiaries ceases when control is transferred out of the Company. however. are eliminated in full on consolidation. without a loss of control. If the Company loses control over a subsidiary. The following differences. it: § § § § § § § Derecognizes the assets (including goodwill) and liabilities of the subsidiary Derecognizes the carrying amount of any noncontrolling interest Derecognizes the cumulative translation differences. being the date on which the Company obtains control. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of income from the date of acquisition or up to the date of disposal. Unrealized gains and losses are eliminated unless costs cannot be recovered. transactions. 2010 Certain of the above-mentioned requirements were applied on a prospective basis. Noncontrolling interests represent the portion of profit or loss and net assets not held by the Company and are presented separately in the consolidated statement of income and within the equity section of the consolidated statement of financial position. This includes the equity interests in Sapientis and its subsidiaries and Sky Cable and its subsidiaries. separately from equity attributable to equity holders of the Parent Company. *SGVMC214977* . the difference between the fair value of the consideration and net book value of the share in the net assets acquired was presented as goodwill. income and expenses and profits and losses resulting from intra-group transactions that are recognized in assets and liabilities. A change in the ownership interest of a subsidiary. Losses within a subsidiary are attributed to the noncontrolling interest even if that results in a deficit balance. is accounted for as an equity transaction.-6Incorporated and started commercial operations in 2011 Subsidiary of CTI (t) A subsidiary of Sky Cable where Sky Cable effectively owns more than 50% interest (u) Incorporated and started commercial operations in 2010 (s) (r) Subsidiaries are fully consolidated from the date of acquisition. recorded in equity Recognizes the fair value of the consideration received Recognizes the fair value of any investment retained Recognizes any surplus or deficit in profit or loss Reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss or retained earnings. All significant intra-Company balances. using consistent accounting policies. as appropriate. are carried forward in certain instances from the previous basis of consolidation: § Acquisition of noncontrolling interest was accounted for using the parent entity extension method. whereby. The financial statements of the subsidiaries are prepared for the same reporting year as the Parent Company. Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

If the business combination is achieved in stages. the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss. liability or contingent liability being recognized or adjusted. If the cost of acquisition is less than the fair value of the net assets of the acquiree. the Company accounted for the investment retained at its proportionate share of net asset value at the date control was lost. measured at acquisition date fair value and the amount of any noncontrolling interest in the acquiree. it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms. the acquirer measures the noncontrolling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. or contingent liability that is recognized from that date and goodwill or any gain recognized shall be adjusted from the acquisition date by the amount equal to the adjustment to the fair value at the acquisition date of the identifiable asset. If the contingent consideration is classified as equity. liabilities or contingent liabilities or the cost of the combination can be determined only provisionally. This includes the separation of embedded derivatives in host contracts by the acquiree. For each business combination. the Company accounts the combination using provisional values. economic circumstances and pertinent conditions as at the acquisition date. liabilities and contingent liabilities. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability. make good of the losses. § Business Combination and Goodwill Business combinations are accounted for using the acquisition method. *SGVMC214977* . Adjustment to these provisional values as a result of completing the initial accounting shall be made within 12 months from the acquisition date. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. The cost of an acquisition is measured as the aggregate of the consideration transferred.-7§ Any losses applicable to the noncontrolling interest in a consolidated subsidiary in excess of the noncontrolling interest’s equity in the subsidiary were charged against the noncontrolling interest to the extent that the noncontrolling interest has binding obligation to. will be recognized in accordance with PAS 39 either in profit or loss or as a change to other comprehensive income. and is able to. Upon loss of control. Acquisition costs incurred are expensed and included in administrative expenses. liability. The carrying amount of an identifiable asset. When the Company acquires a business. the difference is recognized directly in the consolidated statement of income. Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the interest in the net fair value of the acquiree’s identifiable assets. it should not be remeasured until it is finally settled within equity. If the initial accounting for business combination can be determined only provisionally by the end of the period by which the combination is effected because either the fair value to be assigned to the acquiree’s identifiable assets.

The consolidated financial statements are presented in Philippine peso. goodwill is measured at cost less any accumulated impairment losses. Contingent consideration was recognized if. The noncontrolling interest is measured at the proportionate share of the acquiree’s identifiable net assets. the Company had a present obligation. allocated to each of the Company’s cash-generating units that are expected to benefit from the combination. Prior to January 1. For the purpose of impairment testing. embedded derivatives separated from the host contract by the acquiree were not reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that significantly modified the cash flows that otherwise would have been required under the contract. *SGVMC214977* . Business combinations achieved in stages are accounted for as separate steps. 2010 In comparison to the above-mentioned requirements. When the Company acquired a business. the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. irrespective of whether other assets or liabilities of the acquiree are assigned to those units. and items included in the financial statements of each entity are measured using that functional currency. the following differences applied: Business combinations are accounted for using the purchase accounting method. which is the Parent Company’s functional and presentation currency. This involves recognizing identifiable assets (including previously unrecognized intangible assets) and liabilities (including contingent liabilities and excluding future restructuring) of the acquired business at fair value. from the acquisition date. Each entity determines its own functional currency. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of. and only if. Foreign Currency Translation and Transaction Functional and Presentation Currency. the economic outflow was more likely than not and a reliable estimate was determinable. goodwill acquired in a business combination is. Subsequent adjustments to the contingent consideration were recognized as part of goodwill. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. Any additional acquired share of interest does not affect previously recognized goodwill. which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.-8After initial recognition.

Transactions in foreign currencies are initially recorded in the functional currency exchange rate ruling at the date of the transactions. the assets and liabilities of foreign subsidiaries are translated into the presentation currency of the Parent Company (the Philippine peso) at the rate of exchange ruling at financial reporting date and. The initial measurement of financial instruments includes transaction costs. Cash equivalents are short-term. the deferred cumulative amount recognized in equity relating to that particular foreign entity will be recognized in the consolidated statement of income. Financial liabilities are classified as either financial liabilities at FVPL or other financial liabilities at amortized cost. highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less from dates of acquisitions and that are subject to an insignificant risk of change in value. Cash and Cash Equivalents Cash includes cash on hand and in banks. Derivatives are recognized on trade date accounting. except foreign subsidiaries. As of financial reporting date. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Financial Instruments Date of Recognition. held-to-maturity (HTM) investments. is the Philippine peso. The Company classifies its financial assets in the following categories: financial assets at FVPL. All financial instruments are initially recognized at fair value. All differences are taken to the consolidated statement of income. re-evaluates this classification at every financial reporting date. The exchange differences arising on the translation are taken directly to “Exchange differences on translation of foreign operations” in the consolidated statement of comprehensive income and “Cumulative translation adjustments” account within the equity section of the consolidated statement of financial position. Management determines the classification of its financial instruments at initial recognition and. Foreign Currency-denominated Transactions. Upon disposal of any of these foreign subsidiaries. Purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace are recognized using trade date accounting. their statements of income are translated at the weighted average exchange rates for the year. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing exchange rate at financial reporting date. *SGVMC214977* . loans and receivables and AFS investments. where allowed and appropriate. Financial instruments are recognized in the consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument. except for securities at fair value through profit or loss (FVPL). Initial Recognition of Financial Instruments. The functional currencies of the foreign subsidiaries are disclosed under the Basis of Consolidation section. The classification depends on the purpose for which the instruments were acquired and whether they are quoted in an active market. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.-9The functional currency of all the subsidiaries.

When current bid and asking prices are not available. with little or no analysis that it would not be separately recorded. while dividend income is recorded as other income according to the terms of the contract. unless they are designated as hedging instruments in an effective hedge. Financial Assets and Liabilities at FVPL. the Company recognizes the difference between the transaction price and fair value (a Day 1 profit) in the consolidated statement of income. The Company has no financial assets and liabilities at FVPL as of December 31. or The financial instrument contains an embedded derivative. *SGVMC214977* . Interest earned or incurred is recorded as interest income or expense. Derivatives are also classified under financial assets or liabilities at FVPL. For all other financial instruments not listed in an active market. unless the embedded derivative does not significantly modify the cash flows or it is clear. In cases where unobservable data is used. Financial assets and liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. that are active at the close of business at financial reporting date. Day 1 Profit. Financial assets or liabilities may be designated by management at initial recognition as at FVPL if any of the following criteria are met: § The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or recognizing gains or losses on them on a different basis. Financial assets and liabilities at FVPL include financial assets and liabilities held for trading and financial assets and liabilities designated upon initial recognition as at FVPL. liabilities or both which are managed and their performance are evaluated on a fair value basis in accordance with a documented risk management strategy. discounted cash flows analyses. For each transaction. or when the right of payment has been established. the fair value is determined by using appropriate valuation techniques. Where the transaction price in a non-active market is different from the fair value of other observable current market transactions in the same instrument or based on a valuation technique whose variables include only data from observable market. Subsequent changes in fair value are recognized directly in the consolidated statement of income. § § Financial assets or liabilities at FVPL are recorded in the consolidated statement of financial position at fair value. respectively.10 Determination of Fair Value. without any deduction for transaction costs.. The fair value of financial instruments traded in organized financial markets is determined by reference to quoted market bid prices or dealer price quotations (bid price for long positions and ask price for short positions). the price of the most recent transaction is used since it provides evidence of current fair value as long as there has not been significant change in economic circumstances since the time of the transaction. 2011 and 2010. and other relevant valuation models. the difference between the transaction price and model value is only recognized in the consolidated statement of income when the inputs become observable or when the instrument is derecognized. the Company determines the appropriate method of recognizing the Day 1 profit amount. The assets and liabilities are part of a group of financial assets. Such techniques include using reference to similar instruments for which observable prices exist.

HTM investments are measured at amortized cost. Unquoted equity instruments whose fair value cannot be reliably measured. After initial measurement. Other Financial Liabilities. Investments intended to be held for an undefined period are not included in this category. AFS investments are included in current assets if management intends to sell these financial assets within 12 months from financial reporting date. Gains and losses are recognized in the consolidated statement income when the loans and receivables are derecognized or impaired. Loans and receivables are included in current assets if maturity is within 12 months from financial reporting date. HTM Investments. Otherwise. This category includes the Company’s cash and cash equivalents. AFS Investments. designated as AFS financial asset or HTM investments. as well as through the amortization process. Gains and losses are recognized in the consolidated statement of income when the investments are derecognized or impaired. They are not entered into with the intention of immediate or short-term resale and are not classified as at FVPL. Financial liabilities are classified in this category if these are not held for trading or not designated as at FVPL upon the inception of the liability. transaction costs and all other premiums and discounts. After initial measurement. AFS investments are those nonderivative financial assets that are designated as AFS or are not classified in any of the three preceding categories.11 Loans and Receivables. The Company’s AFS investments include investments in ordinary common shares (see Note 32). After initial measurement. plus or minus the cumulative amortization using the effective interest method of any difference between the initially recognized amount and the maturity amount. The Company has no HTM investments as of December 31. *SGVMC214977* . This calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate. are measured at cost. at which time the cumulative gain or loss previously reported in other comprehensive income is included in the consolidated statement of income. less allowance for impairment.. loans and receivables are subsequently carried at amortized cost using the effective interest method. as well as through the amortization process. 2011 and 2010. trade and other receivables and deposits (see Note 32). these are classified as noncurrent assets. These include liabilities arising from operations or borrowings. AFS investments are measured at fair value. Otherwise. Quoted nonderivative financial assets with fixed or determinable payments and fixed maturities are classified as HTM investments when the Company’s management has the positive intention and ability to hold to maturity. This cost is computed as the amount initially recognized minus principal repayments. less any allowance for impairment. with unrealized gains or losses being recognized as other comprehensive income until the investment is derecognized or determined to be impaired. Loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market. these are classified as noncurrent assets.

Impairment of Financial Assets The Company assesses at each financial reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. After initial recognition. Re-assessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required. as well as through the amortization process.. the Company first assesses whether an objective evidence of impairment exists individually for financial assets that are individually significant. For loans and receivables carried at amortized cost. the effective interest rate computed at initial recognition). these are classified as noncurrent liabilities. If there is an objective evidence that an impairment loss on loans and receivables carried at amortized cost has been incurred. The Company assesses whether embedded derivatives are required to be separated from host contracts when the Company first becomes party to the contract. whether significant or not. When reported. obligations for program rights. Expenditures incurred in connection with availments of long-term debt are deferred and amortized using effective interest method over the term of the loans.. Other financial liabilities are included in current liabilities if maturity is within 12 months from financial reporting date. convertible note and customers’ deposits (included under “Other noncurrent liabilities” account) (see Note 32). Debt issue costs are netted against the related long-term debt allocated correspondingly to the current and noncurrent portion. or collectively for financial assets that are not individually significant. the fair value changes are reported in profit or loss. Gains and losses are recognized in the consolidated statement of income when the liabilities are derecognized. (b) a separate instrument with the same terms as the embedded derivative would meet the definition of the derivative. Embedded Derivatives An embedded derivative is separated from the host contract and accounted for as derivative if all the following conditions are met: (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristic of the host contract. the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i. the asset. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a collective assessment of impairment. due to a related party. Amortized cost is calculated by taking into account any related issue costs. *SGVMC214977* .12 Other financial liabilities are initially recognized at fair value of the consideration received. together with the other assets that are not individually significant and were thus not individually assessed for impairment. Classified under other financial liabilities are trade and other payables. discount or premium. is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset. Loans and Receivables.e. Otherwise. and (c) the hybrid or combined instrument is not measured at FVPL. less directly attributable transaction costs. other financial liabilities are subsequently measured at amortized cost using the effective interest method. interest-bearing loans and borrowings.

an objective evidence of impairment includes a significant or prolonged decline in the fair value of the investments below its cost. the cumulative loss. changes in payment terms and other factors that may affect ability to collect payments. AFS Investments. Increases in fair value after impairment are recognized directly in other comprehensive income. The carrying amount of the receivable is reduced through use of an allowance account. If in case the receivable has proven to have no realistic prospect of future recovery. Impaired debts are derecognized when they are assessed as uncollectible. the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized. Likewise. less any impairment loss on that financial asset previously recognized in the consolidated statement of income. or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument has been incurred. Where there is evidence of impairment. is removed from the other comprehensive income and recognized in the consolidated statement of income. Such impairment losses shall not be reversed. Assets Carried at Cost. Provision for individually non-significant balances was made on a portfolio or group basis after performing the regular review of the age and status of the individual accounts and portfolio/group of accounts relative to historical collections. Impairment losses on equity investments are not reversed through the consolidated statement of income. or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument. In case of equity investments classified as AFS. it was also established that accounts outstanding for less than a year should have no provision for impairment but accounts outstanding for over three years should have a 100% provision. A provision for impairment is made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Company will not be able to collect all of the amounts due under the original terms of the invoice.13 The carrying amount of the asset is reduced either directly or through use of an allowance account and the amount of loss is recognized in the consolidated statement of income.. *SGVMC214977* . in a subsequent year. the previously recognized impairment loss is increased or reduced by adjusting the allowance account. the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. for other receivables. to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date. measured as the difference between the acquisition cost and the current fair value. Any subsequent reversal of an impairment loss is recognized in the consolidated statement of income. any allowance provided for such receivable is written off against the carrying value of the impaired receivable. which was arrived at after assessing individually significant balances. If there is an objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured. If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured. the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. If. Interest income continues to be accrued on the reduced carrying amount based on the original effective interest rate of the asset. the recovery is recognized in the consolidated statement of income. If a future write-off is later recovered.

or satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of own equity shares. Classification of Financial Instruments Between Liability and Equity A financial instrument is classified as liability if it provides for a contractual obligation to: § § § deliver cash or another financial asset to another entity.14 Derecognition of Financial Assets and Liabilities Financial Assets.. or the Company has transferred its right to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset. Financial Liabilities. or the terms of an existing liability are substantially modified. The components of issued financial instruments that contain both liability and equity elements accounted for separately. If the Company does not have an unconditional right to avoid delivering cash or another financial asset to settle its contractual obligation. A financial liability is derecognized when the obligation under the liability is discharged. and the difference in the respective carrying amounts is recognized in the consolidated statement of income. the obligation meets the definition of a financial liability. the asset is recognized to the extent of the Company’s continuing involvement in the asset. *SGVMC214977* . § Where the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset. the Company retains the right to receive cash flows from the asset. but has transferred control of the asset. Where an existing financial liability is replaced by another from the same lender on substantially different terms. or (b) has neither transferred nor retained substantially all the risks and rewards of the asset. a part of a financial asset or part of a group of similar financial assets) is derecognized where: § § the rights to receive cash flows from the asset have expired. exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the Company. such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. cancelled or has expired. but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through” arrangement. A financial asset (or. where applicable. with the equity component being assigned the residual amount after deducting from the instrument as a whole the amount separately determined as the fair value of the liability component on the date of issue. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

movie and auxiliary equipment” account) and depreciated over a period no longer than the depreciation period of the distribution equipment. Inventories Inventories are valued at the lower of cost and net realizable value. *SGVMC214977* . including materials. its cost is recognized in the carrying amount of the property and equipment as a replacement if the recognition criteria are satisfied. and the related assets and liabilities are presented gross in the consolidated statement of financial position. radio. Net realizable value of inventories not held for sale is the current replacement cost. less the cost of marketing and distribution. When each major inspection is performed. labor and overhead costs are capitalized as part of distribution equipment (included in the “Television. Subscriber’s initial installation costs. These are charged to expense upon airing of the related program or episodes. are carried at cost (including capitalized interest). Costs related to previously taped episodes determined not to be aired are charged to expense. Land is stated at cost. Unissued spare parts and supplies are not depreciated but tested for impairment until these become available for use. Net realizable value of inventories that are for sale is the selling price in the ordinary course of business. Unissued spare parts and supplies represent major spare parts that can be used only in connection with the distribution equipment. represent costs incurred prior to the airing of the programs or episodes. These are included in the “Other equipment” account. This is not generally the case with master netting agreements.. Such cost includes the cost of replacing part of such property and equipment when that cost is incurred if the recognition criteria are met. amortization and impairment in value. less any impairment in value. and only if. or to realize the asset and settle the liability simultaneously. except land. which includes initial purchase price and other cost directly attributable in bringing such asset to its working condition.15 Offsetting Financial Instruments Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position if. Cost is determined using weighted average method. These costs include talent fees of artists and production staff and other costs directly attributable to production of programs. Property and Equipment Property and equipment. less accumulated depreciation. there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis. included under “Other current assets” account in the consolidated statement of financial position. excluding the costs of day-to-day servicing. Preproduction Expenses Preproduction expenses. The costs of subsequent disconnection and reconnection are charged to current operations. Unrealizable inventories are written off.

at each financial year-end. useful lives and method of depreciation and amortization are reviewed. Construction in progress represents equipment under installation and building under construction and is stated at cost which includes cost of construction and other direct costs. The amortization period and method for an intangible asset with a finite useful life is reviewed at least at each financial year-end. An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. as appropriate. and any accumulated impairment losses. Following initial recognition. *SGVMC214977* . The useful lives of intangible assets are assessed to be either finite or indefinite. The amortization on intangible assets with finite lives is recognized in the consolidated statement of income in the expense category consistent with the function of the intangible asset. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method. This is included as part of “Other noncurrent liabilities” account in the consolidated statement of financial position. movie and auxiliary equipment Other equipment Number of Years 5 to 10 10 to 40 10 to 15 3 to 10 The Company determined the depreciation and amortization for each significant part of an item of property and equipment. The related asset retirement cost is capitalized under “Property and equipment” account in the consolidated statement of financial position and is being depreciated on a straight-line basis. radio. intangible assets are carried at cost less any accumulated amortization in the case of intangible assets with finite lives. Construction in progress is not depreciated until such time that the relevant assets are completed and become available for operational use. The useful lives of the Company’s property and equipment are estimated as follows: Asset Type Land improvements Buildings and improvements Television. Asset Retirement Obligation The net present value of legal obligations associated with the retirement of an item of property and equipment that resulted from the acquisition. construction or development and the normal operations of property and equipment is recognized in the period in which it is incurred and a reasonable estimate of the obligation can be made. and adjusted if appropriate.16 Depreciation and amortization are computed on a straight-line method over the useful lives of property and equipment. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of income in the year the asset is derecognized. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost.. and treated as changes in accounting estimates. The property and equipment’s residual values. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition.

The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. which is amortized on a straight-line method over the license term or economic life. Program rights are written off when no future economic benefits are expected to flow from the assets.e. whichever is shorter) Amortization Method Used Amortized on the basis of program usage. A summary of the policies applied to the Company’s acquired intangible assets is as follows: Impairment Testing/ Recoverable Amount Testing If the remaining expected benefit period is shorter than the Company’s initial estimates. whichever is shorter. except for program rights of CPI.. Such intangibles are not amortized. Episodic program rights are amortized based on the number of episodes and charged to expense upon airing of each episode. Intangible Asset Program Rights Useful Lives Finite (license term or economic life. equally over the next five years)..17 Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Unaired program rights with no definite expiration date are amortized after 5 years from acquisition date (i. Expired program rights are fully amortized on the date of expiry. the Company accelerates amortization of the purchase price or license fee. If not. the change in the useful life assessment from indefinite to finite is made on a prospective basis. which is based on license term *SGVMC214977* . Current and Noncurrent Classification Based on the estimated year of usage except CPI.

. If the remaining expected benefit period is shorter than the Company’s initial estimates. Music and Publication Rights Useful Lives Finite (useful economic benefit) Amortization Method Used Amortized on the basis of the useful economic life Impairment Testing/ Recoverable Amount Testing If the remaining expected benefit period is shorter than the Company’s initial estimates.000 copies sold of video discs and tapes. recognized as expense upon showing Based on the estimated year of usage Video Rights and Record Master Finite (six months or 10.18 - Intangible Asset Story. Current and Noncurrent Classification Based on the estimated year of usage Movie In-process Finite No amortization. the asset is written down to its recoverable amount. whichever comes first) Amortized on the basis of number of copies sold Current Customer Relationships (see Note 4) Finite . If the remaining expected benefit period is shorter than the Company’s initial estimates. the Company accelerates amortization of the cost. If the unamortized film cost is higher than the fair value of the film.22 years Amortized on a straight-line basis over the estimated customer service life Noncurrent Cable Channels CPI Indefinite No amortization Annually and more Noncurrent frequently when an indication of impairment exists *SGVMC214977* . the Company accelerates amortization of the cost. the Company accelerates amortization of the cost.

the deemed cost for subsequent accounting is the carrying value at the date of change in use. Any gains or losses on the retirement or disposal of an investment property are recognized in the consolidated statement of income in the year of retirement or disposal. Investments in Associates The Company’s investments in associates are accounted for under the equity method of accounting. including transaction costs.19 - Intangible Asset Production and Distribution Business . Transfers are made to or from investment property only when there is a change in use. and excludes day-to-day servicing of an investment property. are measured at cost. The carrying amount includes the cost of replacing part of an existing investment property at the time the cost is incurred if the recognition criteria are met. investment in associates is carried in the consolidated statement of financial position at cost plus post-acquisition changes in the Company’s share in net assets of the associate. Goodwill relating to an associate is included in the carrying amount of the investment *SGVMC214977* . except land. For a transfer from investment property to owner-occupied property.. the Company accelerates amortization of the cost Current and Noncurrent Classification Noncurrent Trademark (see Note 4) Indefinite No amortization Annually and more Noncurrent frequently when an indication of impairment exists Investment Properties Investment properties. If owner-occupied property becomes an investment property. Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. generally accompanying a shareholding of between 20% and 50% of the voting rights. less accumulated depreciation and any impairment in value. Land is stated at cost less any impairment in value.Middle East Useful Lives Finite . Under the equity method.25 years Amortization Method Used Amortized on a straight-line basis over the period of 25 years Impairment Testing/ Recoverable Amount Testing If the remaining expected benefit period is shorter than the Company’s initial estimates. An associate is an entity over which the Company has significant influence but not control. the Company accounts for such property in accordance with the policy stated under “Property and equipment” account up to the date of change in use.

A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. These are included under “Other noncurrent assets” account in the consolidated statement of financial position. If that is the case. Where the carrying amount of an asset exceeds its recoverable amount. net of depreciation and amortization. the Company recognizes its share in any changes and discloses this. the Company makes an estimate of the asset’s recoverable amount. unless it has incurred obligations or made payments on behalf of the associate. the asset is considered impaired and is written down to its recoverable amount. Tax Credits Tax credits from government airtime sales availed under Presidential Decree (PD) No. The increased amount cannot exceed the carrying amount that would have been determined. when applicable. In assessing value in use. had no impairment loss been recognized for the asset in prior years. The reporting dates of the associates and the Company are identical and the associates’ accounting policies conform to those used by the Company for like transactions and events in similar circumstances. For assets excluding goodwill. After such a reversal. The consolidated statement of income reflects the share on the financial performance of an associate. unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Impairment losses are recognized in the consolidated statement of income in those expense categories consistent with the function of the impaired asset. Such reversal is recognized in the consolidated statement of income. the carrying amount of the asset is increased to its recoverable amount. *SGVMC214977* .20 and is not amortized. If such indication exists. the recoverable amount is estimated. Impairment of Nonfinancial Assets The Company assesses at each financial reporting date whether there is an indication that property and equipment. investments and tax credits may be impaired. ABS-CBN’s does not recognize further losses. program rights and other intangible assets with finite lives. in the consolidated statement of changes in equity. on a systematic basis over its remaining useful life.. Where there has been a change recognized directly in the equity of the associate. the depreciation and amortization are adjusted in future periods to allocate the asset’s revised carrying amount. including any other unsecured receivables. 1362 are recognized in the books upon actual airing of government commercials and advertisements. Unrealized intercompany profits arising from the transactions with the associate are eliminated to the extent of the interest in the associate. investment properties. When ABS-CBN’s share of losses in an associate equals or exceeds its interest in the associate. If any such indication exists. less any residual value. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset. or when annual impairment testing for an asset is required. an assessment is made at each financial reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

cable channels and trademark as of December 31 of each year. the Company determines whether it is necessary to recognize any additional impairment loss with respect to the Company’s net investments in the associates. The discount is recognized as deferred revenue and amortized over the estimated remaining term of the deposits using the effective interest method. is included in equity attributable to the equity holders of the Parent Company. cable channels and trademarks are reviewed for impairment. cable channels and trademark has been allocated. Customers’ Deposits Customers’ deposits. If this is the case. with any excess being reflected as “Additional paid-in-capital” account in the consolidated statement of financial position. cable channels and trademark by assessing the recoverable amount of the cash-generating units. net of tax. The Company determines at each financial reporting date whether there is any objective evidence that the investments in associates are impaired. included as part of “Other noncurrent liabilities” account in the consolidated statement of financial position. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount of the cash-generating unit (or group of cash-generating units) to which the goodwill. annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Investments in Associates. are initially recognized at fair value. The Company performs its annual impairment test of goodwill. Paid-in Capital The Company has issued par value capital stock that is classified as equity. the consideration paid. Impairment is determined for goodwill. Impairment losses relating to goodwill cannot be reversed for subsequent increases in its recoverable amount in future periods. to which the goodwill. any consideration received. Retained Earnings Retained earnings includes profit attributable to the equity holders of the Parent Company and reduced by dividends on capital stock. the Company calculates the amount of impairment as being the difference between the recoverable amount of investment in associate and the carrying value and recognizes the amount in the consolidated statement of income. Retained earnings may also include effect of changes in accounting policy as may be required by the standard’s transitional provisions. After application of the equity method. When the Company issues its par value shares. including any directly attributable incremental costs (net of applicable taxes) is deducted from equity attributable to the equity holders of the Parent Company until the shares are cancelled or reissued. Goodwill. *SGVMC214977* . the proceeds shall be credited to the “Capital stock” account in the consolidated statement of financial position to the extent of the par value. net of any directly attributable incremental transaction costs and the related tax effects. Cable Channels and Trademark. Incremental costs directly attributable to the issuance of new capital stock are shown in equity as a deduction.21 The following criteria are also applied in assessing impairment of specific nonfinancial assets: Goodwill.. from the proceeds. an impairment loss is recognized in the consolidated statement of income. Where the Company purchases its capital stock (recorded as “Philippine depository receipts convertible to common shares” account in the consolidated statement of financial position). Where such shares are subsequently reissued. cable channels and trademarks relates.

net of agency commissions. Cable Subscribers. Subscription fees are recognized under the accrual basis in accordance with the terms of the agreements. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. Pay before broadcast for customers with credit terms are credited directly to “Trade receivables” under “Trade and other receivables” account in the consolidated statement of financial position. The fair values of barter transactions from advertising time exchanged for program materials. These are applied against receivable upon airing and recognition of related revenue. These are recognized as income on the dates the advertisements are aired. Telecommunication revenues where the Company is the primary obligor is recognized at gross amount including the share of the other carriers. Payments received before broadcast (pay before broadcast) for customers without credit terms are initially recognized as liability and are included as part of “Deferred revenue” under “Trade and other payables” account in the consolidated statement of financial position. Subscription revenue from subscribers of DirecTV who subscribe to the “The Filipino Channel” is recognized in accordance with the Deal Memorandum as discussed in Note 30. Sale of Services a. Revenue Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of the revenue can be measured reliably. b. Subscription Revenue from TFC Now.22 Dividends on Common Shares of the Parent Company Dividends on common shares are recognized as liability and deducted from equity when approved by the BOD of the Parent Company. Dividends for the year that are approved after the financial reporting date are dealt with as an event after financial reporting date. Where the Company is the terminating *SGVMC214977* .. Subscription fees are recognized under the accrual basis in accordance with the terms of the agreements. incentives and co-producers’ share. merchandise or service are included in airtime revenue and the related accounts. Telecommunications revenue is recognized when earned based on agreed rates with the other telecommunications carriers under existing correspondence and interconnection agreements. Subscription fees billed or collected in advance are deferred and shown as “Deferred revenue” under “Trade and other payables” account in the consolidated statement of financial position and recognized as revenue when service is rendered. A right of offset exists between the pay before broadcast balance and the regular trade receivables. Subscription fees are recognized as follows: DTH Subscribers and Cable Operators. Airtime revenue is recognized as income on the dates the advertisements are aired. Subscription revenue from online streaming services of Filipino-oriented content and programming is received in advance (included as “Deferred revenue” under “Trade and other payables” account in the consolidated statement of financial position) and is deferred and recognized as revenue over the period during which the service is performed. Share in DirecTV Subscription Revenue.

- 23 carrier, revenue is recognized only to the extent of termination rates billed by the Company to the originating carrier. Income from prepaid phone cards are realized based on actual usage hours or expiration of the unused value of the card, whichever comes earlier. Income from prepaid card sales for which the related services have not been rendered as of financial reporting date, is presented as “Others” under “Trade and other payables” account in the consolidated statement of financial position. c. Channel lease revenue is recognized as income on a straight-line basis over the lease term. d. Income from film exhibition is recognized, net of theater shares, on the dates the films are shown. e. Income from TV rights and cable rights are recognized on the dates the films are permitted to be publicly shown as stipulated in the agreement. f. Pay-per-view fees are recognized on the date the movies or special programs are viewed.

Sale of goods is recognized when delivery has taken place and transfer of risks and rewards has been completed. These are stated net of sales discounts, returns and allowances. Income and related costs pertaining to installation of decoders and set-top boxes which has no stand alone value without the subscription revenue are aggregated and recognized ratably over the longer of subscription contract term or the estimated customer service life. These are presented as part of “Other noncurrent assets” account (under “Deferred charges”) and “Trade and other payables” account (under “Deferred revenue”), respectively, in the consolidated statement of financial position. Short-messaging-system/text-based revenue, sale of news materials and Company-produced programs included under “Sale of services” account in the consolidated statement of income are recognized upon delivery. Royalty income, included as part of “Sale of services” account in the consolidated statement of income, is recognized upon rendering of service based on the terms of the agreement and is reduced to the extent of the share of the composers or co-publishers of the songs produced for original sound recording. Connection/reconnection/disconnection fees, included as part of “Other income” account in the consolidated statement of income, are recognized when the services are rendered. Management fees, included as part of “Other income” account in the consolidated statement of income, are recognized based on the terms of the management agreement. Rental income is recognized as income on a straight-line basis over the lease term. Interest income is recognized on a time proportion basis that reflects the effective yield on the asset. Dividends are recognized when the shareholders’ right to receive payment is established.

*SGVMC214977*

- 24 Agency Commissions, Incentives and Co-producers’ Share These represent deductions from gross airtime revenues (see Note 23). Agency commissions are recognized at a standard rate of 15%. Incentives include early payment and early placement discounts as well as commissions paid to the Company’s account executives and cable operators. Early payment discount is recognized upon payment. Early placement discount, which represents discount given to agencies and advertisers as a result of early request for telecast order, is recognized upon airing. Co-producers’ share on revenues of specific programs is recognized upon airing. Channel License Fees Channel license fees included under “Cost of services” account in the consolidated statement of income are charged to operations in the year these fees are incurred. Leases The determination whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date of whether the fulfillment of the arrangement is dependent on the use of a specific asset or the arrangement conveys a right to use the asset. Company as a Lessee. Finance leases, which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against the consolidated statement of income. Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term. Operating lease payments are recognized as expense in the consolidated statement of income on a straight-line basis over the lease term. Company as a Lessor. Leases where the Company retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Cost and Expense Recognition Cost and expenses are decreases in economic benefits during the accounting period in the form of outflows or decrease of assets or incurrence of liabilities that result in decrease in equity, other than those relating to distribution to equity participant. Cost and expenses other than those with specific policies are recognized in the consolidated statement of income in the year these are incurred. Provisions Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by

*SGVMC214977*

- 25 discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Pension Costs The Company’s pension plans are funded (Parent Company and Sky Cable) and unfunded (other subsidiaries) defined benefit pension plans, except for ABS-CBN International, which has a defined contribution pension plan. The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognized as income or expense when the net cumulative unrecognized actuarial gains and losses for each individual plan at the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognized over the expected average remaining working lives of the employees participating in the plans. The past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognized immediately. The defined benefit liability is the aggregate of the present value of the defined benefit obligation and net of actuarial gains and losses not recognized, reduced by past service cost not yet recognized and the fair value of plan assets out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognized net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plans. For ABS-CBN International, the defined contribution pension plan is composed of the contribution of ABS-CBN International or employee (or both) to the employee’s individual account. These contributions generally are invested on behalf of the employee through American Funds. Employees ultimately receive the balance in their account, which is based on contributions plus or minus investment gains or losses. The value of each account will fluctuate due to changes in the value of investments. The amount of the Company’s contribution to the defined contribution pension plan is recognized as expense in the period incurred. Taxes Current Tax. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authority. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as at financial reporting date.

*SGVMC214977*

Deferred income tax..26 Current income tax relating to items recognized directly in equity is recognized in equity and not in the consolidated statement of income. Creditable Withholding Taxes. at the time of the transaction. Deferred Tax. Creditable withholding tax represents amounts withheld by the Company’s customers and deducted from income tax payable. Deferred income tax assets are recognized for all deductible temporary differences and carryforward benefits of unused tax credits from excess minimum corporate income tax (MCIT) over the regular corporate income tax (RCIT) and unused net operating loss carryover (NOLCO). Deferred income tax is provided. Unrecognized deferred income tax assets are measured at each financial reporting date and are recognized to the extent that it has become probable that sufficient future taxable profit will allow the deferred income tax to be recovered. on all temporary differences at financial reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. using the liability method. Deferred income tax assets and liabilities are offset. *SGVMC214977* . is not recognized when it arises from the initial recognition of an asset or liability in a transaction that is not a business combination and. Deferred income tax liabilities are not provided on nontaxable temporary differences associated with investments in domestic subsidiaries and associates. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled. The carrying amount of deferred income tax assets is reviewed at each financial reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred income tax assets to be utilized. This is included as part of “Other current assets” account in the consolidated statement of financial position. including asset revaluations. With respect to investments in other subsidiaries and associates. to the extent that it is probable that sufficient future taxable profit will be available against which the deductible temporary differences and carryforward benefits of unused tax credits from excess MCIT over RCIT and unused NOLCO can be utilized. affects neither the accounting nor taxable profit. if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same tax authority. based on tax rates and tax laws that have been enacted or substantively enacted as at financial reporting date. Deferred income tax relating to items recognized outside profit and loss is recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity and not in the consolidated statement of income. deferred income tax liabilities are recognized except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. however. Deferred income tax liabilities are recognized for all taxable temporary differences.

adjusted for the dilutive effect of any potential common shares. or payable to. except: § where the VAT incurred on a purchase of assets or services is not recoverable from the tax authority. Except as otherwise indicated. Earnings Per Share (EPS) attributable to the Equity Holders of the Parent Company Basic EPS amounts are calculated by dividing the net income attributable to equity holders of the Parent Company for the year over the weighted average number of common shares outstanding during the year. expenses and assets are recognized net of the amount of VAT. Such business segments are the bases upon which the Company reports its operating segment information. basic and diluted EPS are stated at the same amount. As the Company has no dilutive potential common shares outstanding. respectively. and receivables and payables that are stated with the amount of VAT included. when material. Contingent assets are not recognized in the consolidated financial statements but disclosed in the notes to consolidated financial statements when an inflow of economic benefits is probable. Diluted EPS amounts are computed in the same manner. the tax authority is included as part of “Other current assets” account or “Trade and other payables” account. Revenue. *SGVMC214977* . the Company does not expect the adoption of these new and amended standards and interpretations to have significant impact on its financial statements. Contingencies Contingent liabilities are not recognized in the consolidated financial statements. Financial information on segment reporting is presented in Note 5. The Company operates in three geographical areas where it derives its revenue. the Company’s operating businesses are organized and managed separately into three business activities. with retroactive adjustments for any stock dividends and stock split. in which case the VAT is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable. Events after Financial Reporting Date Any event after financial reporting date that provides additional information about the Company’s financial position at financial reporting date (adjusting events) are reflected in the consolidated financial statements. Events after financial reporting date that are not adjusting events are disclosed in the notes to consolidated financial statements. § The net amount of VAT recoverable from.27 Value-added Tax (VAT). Future Changes in Accounting Policies The Company will adopt the following standards and interpretations enumerated below when these become effective.. Segment Reporting For management purposes. in the consolidated statement of financial position. These are disclosed in the notes to consolidated financial statements unless the possibility of an outflow of resources embodying economic benefits is remote.

Income Taxes . In addition. Financial Statement Presentation .Recovery of Underlying Assets (effective for annual periods beginning on or after January 1. what remains of PAS 27 is limited to accounting for subsidiaries. 2012) The amendments to PAS 1 change the grouping of items presented in other comprehensive income. and PFRS 12. PAS 28 has been renamed PAS 28. § PAS 27. upon derecognition or settlement) would be presented separately from items that will never be reclassified. Effective Subsequent to 2012 § PAS 1. Joint Arrangements. The Company is currently assessing the impact of the amendment to PAS 19. Disclosure of Interests in Other Entities. the entity’s continuing involvement in those derecognized assets. Financial Instruments: Disclosures .. and PFRS 12. Furthermore. 2013) As a consequence of the new PFRS 11. § PAS 28. and risks associated with. The amendment introduces a rebuttable presumption that deferred tax on investment property measured using the fair value model in PAS 40 should be determined on the basis that its carrying amount will be recovered through sale.Presentation of Items of Other Comprehensive Income (effective for annual periods beginning on or after July 1. 2013) Amendments to PAS 19 range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and rewording. jointly controlled entities.Enhanced Derecognition Disclosure Requirements (effective for annual periods beginning on or after July 1. Employee Benefits (Amendment) (effective for annual periods beginning on or after January 1. Investments in Associates and Joint Ventures. Items that could be reclassified (or “recycled”) to profit or loss at a future point in time (for example. and associates in separate financial statements. 2012) The amendment clarified the determination of deferred tax on investment property measured at fair value. the amendment requires disclosures about continuing involvement in derecognized assets to enable the user to evaluate the nature of. Consolidated Financial Statements. and describes the application of the equity method to investments in joint ventures in addition to associates. 2013) As a consequence of the new PFRS 10. Investments in Associates and Joint Ventures (as revised in 2011) (effective for annual periods beginning on or after January 1. it introduces the requirement that deferred tax on non-depreciable assets that are measured using the revaluation model in PAS 16 always be measured on a sale basis of the asset. Separate Financial Statements (as revised in 2011) (effective for annual periods beginning on or after January 1. 2011) The amendment requires additional disclosure about financial assets that have been transferred but not derecognized to enable the user of the Company’s financial statements to understand the relationship with those assets that have not been derecognized and their associated liabilities. *SGVMC214977* . § PFRS 7.28 Effective in 2012 § PAS 12. § PAS 19.

and ii. 2013. Consolidated and Separate Financial Statements. are required to be consolidated by a parent. 2013) PFRS 10 replaces the portion of PAS 27. Amounts related to recognized financial instruments that do not meet some or all of the offsetting criteria in PAS 32.29 § PFRS 7.Special Purpose Entities. *SGVMC214977* . Jointly-controlled Entities . Instead. including: i. compared with the requirements that were in PAS 27. PFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. b) The amounts that are set-off in accordance with the criteria in PAS 32 when determining the net amounts presented in the statement of financial position. The changes introduced by PFRS 10 will require management to exercise significant judgment to determine which entities are controlled. in a tabular format unless another format is more appropriate. Financial Instruments: Disclosures .Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after January 1.Non-monetary Contributions by Venturers. Consolidation . The new disclosures are required for all recognized financial instruments that are set-off in accordance with PAS 32. The amendments require entities to disclose. This is presented separately for financial assets and financial liabilities recognized at the end of the reporting period: a) The gross amounts of those recognized financial assets and recognized financial liabilities.. § PFRS 11. with retrospective application) These amendments require an entity to disclose information about rights of set-off and related arrangements (such as collateral agreements). These disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or ‘similar agreement’. § PFRS 10. c) The net amounts presented in the statement of financial position. Consolidated Financial Statements (effective for annual periods beginning on or after January 1. that addresses the accounting for consolidated financial statements. Joint Arrangements (effective for annual periods beginning on or after January 1. and therefore. PFRS 10 establishes a single control model that applies to all entities including special purpose entities. and SIC-13. the following minimum quantitative information. 2013) PFRS 11 replaces PAS 31. irrespective of whether they are set-off in accordance with PAS 32. JCEs that meet the definition of a joint venture must be accounted for using the equity method. Interests in Joint Ventures. and e) The net amount after deducting the amounts in (d) from the amounts in (c) above. It also includes the issues raised in SIC-12. d) The amounts subject to an enforceable master netting arrangement or similar agreement that are not otherwise included in (b) above. Amounts related to financial collateral (including cash collateral).

Fair Value Measurement (effective for annual periods beginning on or after January 1. 2013) PFRS 13 establishes a single source of guidance under PFRS for all fair value measurements. 2014. These disclosures relate to an entity’s interests in subsidiaries. *SGVMC214977* . In subsequent phases. Financial Instruments: Presentation . any changes in offsetting is expected to impact leverage ratios and regulatory capital requirements.Offsetting Financial Assets and Financial Liabilities (effective for annual periods beginning on or after January 1. associates and structured entities. The Company is currently assessing the impact that this standard will have on its financial position and performance. The Company is currently assessing impact of the amendments to PAS 32. § PFRS 13. The adoption of the first phase of PFRS 9 will have an effect on the classification and measurement of the Company’s financial assets. § PFRS 9. A number of new disclosures are also required. when issued. § Philippine Interpretation IFRIC 20. but rather provides guidance on how to measure fair value under PFRS when fair value is required or permitted. Stripping Costs in the Production Phase of a Surface Mine (effective for annual periods beginning on or after January 1.. 2013) PFRS 12 includes all of the disclosures that were previously in PAS 27 related to consolidated financial statements.30 § PFRS 12. PFRS 13 does not change when an entity is required to use fair value. Financial Instruments: Classification and Measurement (effective for annual periods beginning on or after January 1. 2015) PFRS 9 as issued reflects the first phase on the replacement of PAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in PAS 39. § PAS 32. as well as all of the disclosures that were previously included in PAS 31 and PAS 28. Disclosure of Interests in Other Entities (effective for annual periods beginning on or after January 1. but will potentially have no impact on classification and measurements of financial liabilities. 2013) This interpretation applies to waste removal costs that are incurred in surface mining activity during the production phase of the mine (“production stripping costs”) and provides guidance on the recognition of production stripping costs as an asset and measurement of the stripping activity asset. joint arrangements. While the amendment is expected not to have any impact on the net assets of the Company. to present a comprehensive picture. The Company will quantify the effect in conjunction with the other phases. with retrospective application) These amendments to PAS 32 clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the PAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. hedge accounting and impairment of financial assets will be addressed with the completion of this project expected on the first half of 2012.

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 accounts of foreign subsidiaries were translated to Philippine peso for purposes of consolidation to the ABS-CBN Group’s accounts. The Parent Company and all other subsidiaries and associates. EUR or SGD). Future events may occur which will cause the judgments and assumptions used in arriving at the estimates to change. including expectations of future events that are believed to be reasonable under the circumstances. 3. AUD.e. USD. Judgments In the process of applying the Company’s accounting policies. except for foreign subsidiaries. except for foreign subsidiaries. Judgments and estimates are continually evaluated and are based on historical experience and other factors. Construction Contracts. CAD. have determined that their functional currency is the Philippine peso. which have the most significant effect on the amounts recognized in the consolidated financial statements. or involves rendering of services in which case revenue is recognized based on stage of completion.31 § Philippine Interpretation IFRIC 15. Estimates and Assumptions The Company’s consolidated financial statements prepared under PFRS require management to make judgments and estimates that affect amounts reported in the consolidated financial statements and related notes.. Determination of Functional Currency. operate. The effects of any change in judgments and estimates are reflected in the consolidated financial statements as they become reasonably determinable. or contains. a lease when the fulfillment of the arrangement depends on a specific asset or assets and the arrangement conveys the right to use the asset. management has made the following judgments. Thus. Management’s Use of Judgments. The Philippine peso is also the currency that mainly influences the sale of goods and services as well as the costs of selling such goods and providing such services. apart from those involving estimations. except when such contract qualifies as construction contract to be accounted for under PAS 11. Leases. JPY.. Agreements for the 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. The Philippine peso is the currency of the primary economic environment in which the Parent Company and all other subsidiaries and associates. GBP. An arrangement is. The evaluation of whether an arrangement contains a lease is based on its substance. Each foreign subsidiary determines its functional currency (i. The interpretation requires that revenue on construction of real estate be recognized only upon completion. *SGVMC214977* . The SEC and the FRSC have deferred the effectivity of this interpretation until the final revenue standard is issued by International Accounting Standards Board and an evaluation of the requirements of the final revenue standard against the practices of the Philippine real estate industry is completed.

. However. Revenue is stated at gross amount including the share of the other telecommunications carriers. and whether those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Such contracts are accounted for as operating leases when the Company. the Company retains substantially all the risks and benefits of ownership of the assets due to the following circumstances: § § § the lease term is only for a limited number of years. as a lessee. and as a lessor. the Company initially estimates the amounts based on history of sharing. among others. which requires the use of accounting estimates. respectively (see Note 10). The fair values of financial instruments of short-term nature and those that are subjected to monthly repricing are estimated to approximate their carrying amounts. The Company classifies financial assets by evaluating. lease is renewable but there is no purchase option at a significant discount as of date. has determined that the lessor retains substantial risks and benefits of ownership of these properties. Financial Assets not Quoted in an Active Market. The Company has also entered into lease agreements covering certain property and equipment. Included in the evaluation on whether a financial asset is quoted in an active market is the determination on whether quoted prices are readily and regularly available. Thus. Estimates and Assumptions The key assumptions concerning future and other key sources of estimation at the financial reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Such contracts are accounted for as finance leases when the Company has determined that it bears substantially all the risks and benefits incidental to ownership of said properties due to the following: § § § the lease term represents substantially the full economic life in years of the asset under lease. *SGVMC214977* . fair values are assessed to be the present value of estimated future cash flows discounted at risk-free rates applicable to the financial instrument. Fair Value of Financial Instruments. the lease is renewable and there is currently a purchase option at a significant discount which the Company is likely to exercise. whether the asset is quoted or not in an active market. 2011 and 2010. and the lease payments represent amortization of the purchase price of the assets. and the lease payments represents solely compensation for use of asset rather than for purchase of the assets. The Company’s telecommunications revenue recognition policies require the use of estimates and assumptions that may affect the reported amounts of revenue and receivables. PFRS requires that certain financial assets and liabilities (including derivative instruments) be carried at fair value.32 The Company has entered into lease arrangements as a lessor and as a lessee. but the definite amounts are determined subsequent to financial reporting date. The fair values of financial assets and liabilities are set out in Note 32. there is no assurance that such use of estimates will not result in material adjustments in future periods. The difference between the amount initially recognized and actual settlement or actual billing is recognized in the next period. Revenue Recognition. For certain financial instruments which are not quoted in an active market. The carrying amount of property and equipment under finance lease amounted to P38 million and = = P85 million as of December 31.

. collection experience and past loss experience. and a review of the factors that affect the collectibility of the accounts including. respectively (see Note 26). obsolescence. Allowance for doubtful accounts amounted to P669 million = and P628 million as of December 31. Inventories amounted to P135 million and P153 million as of = = December 31. physical deterioration. Trade and other receivables. at each financial reporting date to assess whether an allowance for impairment should be recorded in the consolidated statement of income. net of allowance for doubtful accounts. In these cases. Provision for decline in value of inventory amounted to P17 million. but not limited to. The amount and timing of recorded expenses for any period would differ if the Company made different judgments or utilized different methodologies. technical or commercial obsolescence and legal or other limits on the use of these assets. respectively (see Note 7). judgment by management is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required. The amounts and timing *SGVMC214977* . internal technical evaluation and experience with similar assets while for intangible assets with finite life. The review is made by management on a continuing basis to identify accounts to be provided with allowance. The estimated useful life of each asset is reviewed periodically and updated if expectations differ from previous estimates due to physical wear and tear. Estimation for property and equipment and investment properties is based on a collective assessment of industry practice. Such estimates are based on assumptions about a number of factors and actual results may differ. In particular. This collective allowance is based on historical default experience. estimated life is based on the life of agreement covering such intangibles. The Company evaluates specific balances where management has information that certain amounts may not be collectible. 2010 and 2009. the age and status of the receivables.248 million as of December 31. However. resulting in future changes in the allowance.128 million and P7. respectively (see Note 8). P32 million and P5 million in = = = 2011.33 Allowance for Doubtful Accounts. Provision for doubtful accounts amounted to P255 million. respectively (see Note 7). 2011 and 2010. An increase in allowance for doubtful accounts would increase the recorded operating expenses and decrease current assets. investment properties and intangible assets with finite life is estimated based on the period over which the asset is expected to be available for use. These specific reserves are re-evaluated and adjusted as additional information received affects the amount estimated. have a greater risk of default than when originally granted. In addition to specific allowance against individually significant receivables. although not specifically identified as requiring a specific allowance. 2010 and 2009. it is possible that future financial performance could be materially affected by changes in the estimates brought about by changes in the aforementioned factors. amounted to P8. The allowance is established by charges to income in the form of provision for doubtful accounts. The allowance account is reviewed on a regular basis to reflect the accurate valuation in the financial records. current economic trends. based on available facts and circumstances. 2011 = = and 2010. Estimated Useful Lives of Property and Equipment. the Company uses judgment. the Company also makes a collective impairment allowance against exposures which. changes in price levels or other causes. Inventory items identified to be obsolete and unusable are written off and charged as expense in the year such losses are identified. = Net Realizable Value of Inventories. respectively. Investment Properties and Intangible Assets. P420 million and P292 million in = = = 2011. changes in customer payment terms and other factors that may affect the Company’s ability to collect payments. 2011 and 2010. The useful life of each item of the Company’s property and equipment. The Company reviews its loans and receivables. including unbilled receivables. Inventories are carried at net realizable value whenever net realizable value of inventories becomes lower than cost due to damage.

2011 and 2010. investment properties and intangible assets during the year. respectively (see Note 12). whichever is shorter. 2011 (see Note 20).391 89.375.458 71. program rights amounted to P2.609 92. The determination of what is “significant” or “prolonged” requires judgment. the Company evaluates other factors. with regard to the property and equipment. except for program rights of CPI. music and publication rights 2011 P15. Determining asset retirement obligation requires estimation of the costs of dismantling installations and restoring leased properties to their original condition. the carrying value of AFS investments amounted to =265 million P (see Note 13). Provision for impairment loss on investment in stocks amounted to =54 million in P 2010 (see Note 13). The Company treats AFS investments as impaired when there has been a significant or prolonged decline in the fair value below its cost or where there is objective evidence that impairment exists.115 = 2. Unaired program rights with no definite expiration date are amortized after five years from acquisition date. As of December 31.250 28. The Company treats “significant” generally as 20% or more of the original cost of investment. 2011 and 2010. Amortization of Program Rights. and “prolonged” as greater than 12 months.359 97. which is amortized on a straight-line method over the license term or economic life. While it is believed that the assumptions used in the estimation of such costs are reasonable. 11 and 12): Property and equipment Program rights Customer relationships Production and distribution business .224 7.108 6.242. Episodic program rights are amortized based on the number of episodes and charged to expense upon airing of each episode. There were no changes in the estimated useful lives of property and equipment.621 9. Asset Retirement Obligation. investment properties and intangible assets with finite life are as follows (see Notes 10.460 35.. investment properties or intangible assets would increase the recorded expenses and decrease noncurrent assets. In addition. investment properties and intangible assets would be affected by changes in these factors and circumstances.Middle East Movie in-process Video rights and record master Investment properties Story.463 million and = = P2. = *SGVMC214977* . Expired program rights are fully amortized on the date of expiry.030 2010 = P15.195. As of December 31.376 million. A reduction in the estimated useful life of any of the property and equipment.369 Impairment of AFS Investments. The Company estimates the amortization of program rights with finite lives based on the program usage. The carrying values of property and equipment. including normal volatility in share price for quoted equities and the future cash flows and discount factors for unquoted equities.958 471.293 2.463. Asset retirement obligation amounted to P1 million as of December 31.068 27.419 128.34 of recording the depreciation and amortization for any year. significant changes in these assumptions may materially affect the recorded expense or obligation in future periods.

249 471.250 7.419 2.369 Impairment of Goodwill. and significant negative industry or economic trends.375.115 = 2.332 – 257.391 89. for the cash-generating unit to which the asset belongs. The Company assesses impairment on nonfinancial assets (enumerated in the table below) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.609 92.113 9. The recoverable amount of the cash-generating unit has been determined based on a value in use calculation using cash flow projections which were based on financial budgets approved *SGVMC214977* . cable channels and trademark are allocated.35 Impairment of Nonfinancial Assets.460 57.195.084 35.030 2010 = P15. and (b) the present value of the annual projected cash flows for five years and the present value of the terminal value computed under the discounted cash flow method. The Company recognizes an impairment loss whenever the carrying amount of an asset exceeds its recoverable amount. The impairment on the goodwill.568 323. The Company has identified that cable channels of CPI and trademark have an infinite life. 12. significant changes in the manner of use of the acquired assets or the strategy for overall business.661 915.796 41. 11. The carrying values of assets that are subjected to impairment testing when impairment indicators are present are as follows (see Notes 9.463.293 2. The factors that the Company considers important which could trigger an impairment review include the following: § § § significant underperformance relative to expected historical or projected future operating results. 14 and 15): Property and equipment Program rights Tax credits with tax credit certificates (TCCs) Trademark Preproduction expenses Customer relationships Production and distribution business . 10.207. The recoverable amount is computed using the value in use approach. cable channels and trademark is determined by comparing: (a) the carrying amount of the cash-generating unit. music and publication rights 2011 P15.354. Cable Channels and Trademark. Estimating the value in use requires the Company to make an estimate of the expected future cash flows from the cash-generating units and to make use of a suitable discount rate to calculate the present value of those future cash flows. Impairment testing requires an estimation of the value in use of the cash-generating units to which goodwill.958 2.359 97.068 6. if it is not possible.242.458 71.621 58.492 128.. Recoverable amounts are estimated for individual assets or. The Company performs impairment testing annually or more frequently when there are indications of impairment for goodwill and intangible assets with infinite lives.912 41.Middle East Movie in-process Investment properties Investments in associates Video rights and record master Story.

2011 (see Note 12). P = 2011 and 2010. The expected rate of return on plan assets was based on average historical premium on plan assets.36 by senior management of the subsidiaries covering a five-year period. d. Operating Expenses On the average. operating expenses were projected to increase at a single-digit growth rate and at a slower pace than revenue. c. The cost of defined benefit obligation is determined using actuarial valuations. WACC was based on the appropriate weights of debt and equity. cable channels and trademark are as follows: a. 2011 and 2010. respectively. Historically. 2011 and 2010 (see Note 12). Due to the long-term nature of these plans. respectively (see Note 29). The carrying amount of the cable channels amounted to = P460 million as of December 31. expected rates of return on plan assets. As of December 31. The actuarial valuation involves making assumptions about discount rates. The carrying amount of deferred tax assets is reviewed at each financial reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax assets to be utilized. b.60% and 12. = Present Value of Pension Obligation. The carrying amount of trademark amounted to P916 million as of December 31. *SGVMC214977* . and future salary increases. Gross Revenue On the average. which were multiplied with the assumed costs of debt and equity.. Gross Margins Increased efficiencies over the next five years are expected to result in margin improvements.144 million as of December 31. respectively = = (see Note 29). The discount rate applied to the cash flow projections were 11. The carrying amount of goodwill amounted to =3. A 0-5% perpetuity growth rate was assumed at the end of the five-year forecast period. Recognition of Deferred Tax Assets. Unrecognized net actuarial loss = amounted to P2. such estimates are subject to uncertainty.139 million and P852 million as of December 31. The assumed discount rates were determined using the market yields on Philippine bonds with terms consistent with the expected employee benefit payout as of financial reporting date (see Note 29). the pension obligation of the Company amounted to = P889 million and P625 million. This assumes that the market share of the subsidiaries in their respective industries will be flat on the assumption that the industries also grow at par with the economy. respectively (see Note 16).55% in 2011 and 2010. Discount Rate The discount rate used to arrive at the present value of future cash flows was the Company’s Weighted Average Cost of Capital (WACC).749 million and P2. 2011 and 2010. gross revenue of the subsidiaries over the next five years were projected to grow in line with the economy or with nominal Gross Domestic Product. The key assumptions used in the impairment test of goodwill. advertising spending growth had a direct correlation with economic growth.

The Company currently does not believe these proceedings will have a material adverse effect on its consolidated financial position and performance. Inc. as amended or supplemented. accrued interest receivable and advances to Sky Cable totaling to P 2. On December 23. in the event of a public offering of the Issuer before maturity date.010 million and P477 million as of December 31. (b) the valuation of the shares by an independent third party appraiser that is a recognized banking firm. (collectively referred to as PLDT Group) pursuant to the Master Consolidation Agreement dated July 18.129. *SGVMC214977* . The Note does not specifically state that interest shall accrue after June 30. Re-organization and Disposals a. Sky Cable was considered as a subsidiary of the Parent Company with a 65. Business Combinations. Unrecognized deferred tax assets of subsidiaries amounted to P1. = The Note was subject to interest of 13. 2006 amounting to P459 million and ABS-CBN’s advances to Sky Cable amounting to P459 million can be = = converted into 269. effective March 15.3% effective interest in Sky Cable.3% effective interest. that future financial performance could be materially affected by changes in the estimates or in the effectiveness of strategies relating to these proceedings (see Note 35). Conversion of Note and Advances On June 30. 2006. 2004. however. Acquisitions. On May 20. Contingencies. Inc. 2001. Based on this final valuation of Sky Cable.37 Recognized deferred tax assets amounted to P1.. 2008. Consequently.499 million to Sky = Vision in consideration of Philippine Depository Receipts (PDRs) convertible into underlying Sky Cable shares to be issued by Sky Vision upon approval by the Philippine SEC of the increase in the authorized capital stock of Sky Cable. respectively = = (see Note 28).0 million (P1. securities underwriter or one of the big three international accounting firms or their Philippine affiliate jointly appointed by Lopez.581 million. 2011 and 2010. Sky Cable (“Issuer”) issued a convertible note (“the Note”) to the Parent Company amounting to US$30. accrued interest on the Note from June 30. 2008.763 million and P1. for financial reporting purposes. whereby the Parent Company assigned the Note. the Lopez Group and the PLDT Group agreed on valuation for Sky Cable effective March 15.645. 2008.0% compounded annually and matured on June 30. based on the prevailing USD to Philippine peso exchange rate on maturity date. 2006.828 Sky Cable shares. The Company’s estimate of the probable costs for the resolution of these claims has been developed in consultation with outside counsel handling defense in these matters and is based upon an analysis of potential results.349 million as of = = December 31. at a conversion price equivalent to a 20% discount of: (a) the market value of the shares. 4. Thus. 2006 in the event that the Note is not converted for any reason. the Note amounting to = P1. and Lopez Holdings Corporation (Lopez Holdings) (collectively referred to as Lopez Group) and Philippine Long Distance Telephone Company and Mediaquest Holdings. representing 65. 2011 and 2010. Sky Vision Corporation (Sky Vision) and Sky Cable entered into an Assignment Agreement.581 million). It is possible. respectively. 2004 to June 30. Pursuant to this Assignment Agreement. the Parent Company. no interest was charged after June 30. The Company is currently involved in various legal proceedings. The principal and accrued interest as of maturity date is mandatorily converted into common shares of the Issuer. 2008.

Upon conversion of the foregoing loan and advances. On March 2. The difference between *SGVMC214977* . Goodwill arising on the acquisition amounted to P1. the effective interest of ABS-CBN increased from 65. Sky Vision and Sky Cable agreed that such shares and debt shall be transferred to Sky Cable. On the same date. 2008. Inc.645.69 per share.. Sky Vision agreed to issue ABS-CBN PDRs which shall be convertible into Sky Cable shares. The voting rights remain with Sky Vision as legal owner but the Parent Company has economic benefits over the underlying Sky Cable shares. Sky Vision issued the 269. SCHI owns THI.328 million (see Note 16). Any cash dividends or other cash distributions in respect of the underlying Sky Cable shares are received by Sky Vision. Incorporated (SCHI) for a cash payment of P1.588.38 Sky Vision is contractually bound to issue the PDRs to the Parent Company upon the issuance of the underlying Sky Cable shares to Sky Vision.588. the Parent Company has the economic interest over the underlying shares by virtue of the PDRs. ABS-CBN assigned the = P1. providing potential voting rights to the Parent Company. As a consideration for the assignment. upon payment of the exercise price and subject to certain other conditions. the delivery of Sky Cable shares or the sale of and delivery of the proceeds of such sale of Sky Cable shares. b.3% effective interest in Sky Cable.798 million loan to Sky Vision. 2009. Sky Vision acquired the noncontrolling interest in PCC through the purchase of all the common shares in and convertible notes and advances of Sun Cable Holdings. On February 19. Sky Vision issued the 278. There is no cash outflow = on the acquisition. by virtue of a separate Assignment Agreement. The Parent Company will have the voting rights upon exercise of the PDRs. PCC became a wholly owned subsidiary of Sky Cable as of that date. which in turn owns the noncontrolling interest in PCC. Sky Vision assigned all its common shares in SCHI to Sky Cable pursuant to this agreement.3%. Acquisition of Noncontrolling Interest in PCC On May 23.3% to 79.499 million was allocated to = the identifiable assets and liabilities based on the fair values at conversion date. Consequently. The terms of the agreement are similar to the Assignment Agreement discussed in the foregoing.3%.828 PDRs with underlying Sky Cable shares to ABS-CBN in 2011. While Sky Vision is the legal owner of the subscription to the 65.798 million loan to Sky Cable and P900 million advances to Sky Vision to PDRs covering = 278.814 Sky Cable shares were issued to Sky Vision in 2009. The 278.3% to 79. the BOD of ABS-CBN approved the additional conversion of = P1.645. After deducting administrative expenses for the maintenance of the PDR structure. Accordingly. The effective interest of ABS-CBN in Sky Cable increased from 65.248 million and an assumption of = the outstanding loan obligation of Telemondial Holdings. The conversion of the Note is considered as a business combination and accounted for using purchase method in 2008. 2009. (THI) in the amount of = P100 million.814 PDRs with underlying Sky Cable shares to ABS-CBN in 2011. The PDRs will grant the Parent Company the right. On December 23. Sky Vision shall distribute the proceeds to the Parent Company. The conversion was = considered as acquisition of noncontrolling interest. the consideration of P2. for financial reporting purposes.828 Sky Cable shares were issued to Sky Vision in 2009.588. thus. 2008. The 269.814 Sky Cable shares at conversion price of P9. effectively. The PDRs may be exercised at any time by the Parent Company.

= d. ABS-CBN Hungary incorporated ABS-CBN Netherlands and established a branch in Luxembourg. c. ABS-CBN and Bayantel agreed that settlement of the liability shall be paid in the form of immediately available and unencumbered funds amounting to US$2.. In December 2009. As of December 31 2010. the Parent Company assigned its 2% share in ABS-CBN International to ABS-CBN Global in exchange for additional common shares in ABS-CBN Global. amounting to P558 million. 2009. (Bayantel) its 2% interest in ABS-CBN International for US$6 million (P277 million) which = is payable over a period of three years beginning January 2010 until December 2012 or as maybe extended for a longer period as agreed by both parties. payable arising from the transaction amounted to P250 million. and other media-related projects. ABS-CBN paid the US$2. 2009.7 million. co-branded marketing and promotional campaigns.7 million (P118 million) and recognized gain from settlement of the = liability amounting to P144 million in 2011 (see Note 27). ABSCBN Global became the 100% owner of ABS-CBN International. On May 19.9 million (P217 million) was recognized as = goodwill in the consolidated statements of financial position (see Note 16). § The excess of the consideration over the carrying value of the noncontrolling interest in ABS-CBN International amounting to US$4. Acquisition of Noncontrolling Interest in ABS-CBN International In December 2009. The = current portion amounting to P158 million was presented as part of “Due to related parties” in = the “Trade and other payables” account (see Note 17) while the noncurrent portion amounting to P92 million was presented as part of “Due to a related party” in the “Other noncurrent = liabilities” account (see Note 20). Inc. which are intended to conduct the management of other business enterprises within the ABS-CBN Group. This assignment has no impact on the consolidated financial statements. sponsorship in various ABS-CBN-produced programs and/or ABS-CBN-organized special events. *SGVMC214977* . The parties also agreed that the Parent Company shall have the option to pay the consideration by way of the following products and services of the Parent Company which may be availed by Bayantel during the payment term: § § § commercial advertising airtime for Bayantel’s products and services. the Parent Company acquired from Bayan Telecommunications. Re-organization of ABS-CBN Global On January 7. In June 2011. 2009 and June 19. ABS-CBN Hungary was incorporated to be the holding company of certain international subsidiaries. respectively. Consequently. is recognized as goodwill = (see Note 16).39 the fair value of the consideration transferred and liability assumed and the carrying value of the noncontrolling interest in PCC.

The purchase price allocation which was determined provisionally in 2010 was finalized in 2011.138) (P9. e. collectively as the assignors. the Company’s consolidated net income would have been P3. all its subscription rights over the 250.657 (8. Inc.000) (9. 2010. Consequently.229 million for the year ended December 31. and Unilink Communications Corporation and The Philippine Home Cable Holdings. Inc. ABS-CBN Global transferred its 100% ownership interest in ABS-CBN International to ABS-CBN Hungary in exchange for the issue of a US$81 million equity note and the assumption of an existing US$5 million note by ABS-CBN Hungary. Sapientis incurred net loss amounting to P2 million.640) (132. 2009.657 130. = On October 4. = f. signed deeds of conditional sale for the purchase of an aggregate of 53. 2010.251. Inc.201 = P63 Cash Deposits for future stock subscriptions Trade and other payables Short-term loans Net assets Goodwill arising on acquisition (see Note 16) Consideration paid by cash Net cash flow on the acquisition are as follows: Net cash acquired with the subsidiary Cash paid Net cash inflow = P845 (63) = P782 From acquisition date. Acquisition and Assignment of Sky Cable Shares On September 9.. = *SGVMC214977* .000) (132. There was no change in the fair value of identifiable assets and liabilities of Sapientis at acquisition date. If the combination = had taken place at the beginning of 2010..772. the Parent Company purchased from Legaspi Capital Holdings Corporation and Beacon Diversified Holdings.138) = 9.869 Sky Cable shares for P56 million. for = = P63 thousand.000 shares in Sapientis. The following are the fair values of the identifiable assets and liabilities of Sapientis at acquisition date and the corresponding carrying amounts immediately before the acquisition based on the final purchase price allocation: Fair Value Recognized on Acquisition Carrying Value = P845 = P845 130. 2010.40 In December 2009.640) (8. The re-organization has no impact on the consolidated financial statements. the Parent Company. ABS-CBN Hungary became the new holding company for ABS-CBN International as of December 31. Acquisition of Sapientis On October 15. 2010. the Parent Company acquired from PCCI Equities. with a par value of P1 per share.835 Sky Cable shares for P516 million payable in installments. an aggregate of 5. as the assignee.

the same value that ABS-CBN has purchased the said Sky Cable P shares. subject to adjustment every three years upon mutual agreement of the parties. 2010. Lopez.403 shares of Sky = Cable at the option of Sampaquita any time from issue date to maturity date.147 million (including gain on fair = value of retained interest of P323 million) was recognized in the 2011 consolidated statement = of income (see Note 27). Inc. completed the issuance of the P250 million note to Sampaquita convertible into 25. The interest rate shall be agreed upon by Sky Cable and Sampaquita at least 30 days prior to the commencement of each 3-year period.024.41 On December 15. Inc. 2011. Sale of Sky Cable PDRs and Issuance of Convertible Note On February 14. The equity component of the convertible note was recognized as part of noncontrolling interests in the 2011 consolidated financial statements of ABS-CBN. 2011. including the goodwill. Ltd. the Parent Company agreed to sell 59.944.812. The convertible note bears 0% interest rate for the first three years. STT Communications Ltd. On March 30. On March 30.174 PDRs with underlying Sky Cable shares to Sampaquita for P1. as of March 30. ABS-CBN derecognized the assets. Sampaquita completed the = subscription of originally issued 149. 2011. Sky Cable. The acquisition and subsequent assignment of Sky Cable shares to Sky Vision had no financial impact to the consolidated financial statements in 2011 and 2010. Inc. the Parent Company agreed to sell all these shares to = Sky Vision for the same value. If no such agreement is reached.450 million and Sky Cable convertible note for P250 million. Sky Vision. 2011. Sky Cable. entered into a Subscription and Purchase Agreement (SPA) wherein Sampaquita agreed to purchase PDRs from ABS-CBN and Lopez Holdings and to subscribe to originally issued PDRs from Sky Vision and convertible note to be issued by Sky Cable. ABS-CBN completed the sale of 143. agreed to sell all its rights to the 8.711.934 PDRs with underlying Sky Cable shares from Sky Vision for =1.. as provided in the SPA dated February 14. the interest rate for the succeeding period shall be the same as the interest rate for the preceding 3-year period.107. Gain on the sale of investments amounting to P1. Lopez. provided that the interest rate shall not exceed 10% per annum. ABS-CBN. and liabilities of Sky Cable and noncontrolling interest in Sky Cable. Lopez Holdings. The convertible note was accounted for under split accounting. Consequently.544 Sky Cable shares it beneficially owns for P87 million. (STTC) and Sampaquita Communications Pte.1%. 2011. Simultaneously. executed a Contract to Sell with the Parent Company where Lopez. On January 13. g.816 million. Such interest shall accrue from and including the first day of such interest period to but not including the last day of such interest period. *SGVMC214977* . which is 10 years from date of issuance.3% to 47. a subsidiary of STTC). the effective economic interest of ABS-CBN decreased from 79.704 Sky Cable shares to Sky Vision for =572 million. 2011. (Sampaquita. P = For financial reporting purposes. On May 12. 2011.

for = P the year ended December 31. at acquisition date and the corresponding carrying amounts immediately before the acquisition were: Fair Value Recognized on Acquisition Carrying Value = P49.091 12. None of the goodwill recognized is expected to be deductible for income tax purposes.42 h.339 12.0% of fair value of net liabilities) Net liabilities acquired Goodwill arising on acquisition (see Note 16) Consideration paid by cash Net cash flow on the acquisition are as follows: Net cash acquired with the subsidiary Cash paid Net cash outflow = P49.418) (362. If = the combination had taken place at the beginning of 2011.418) (27..233) (362.628 Cash and cash equivalents Trade and other receivables Inventories Prepaid expenses and other current assets Property and equipment Other noncurrent assets Trade and other current liabilities Loan payable Long-term debt Asset retirement obligation Deferred tax liability Net liabilities Noncontrolling interests (30.018) 1.740) (P735.215) (31.122 (522.740) = 220. a 95%-owned subsidiary of CTI.050 million. The fair values of the identifiable assets and liabilities of CTI.215) (1. 2011.722 (515.122 12.889) (649.324 2.934 2. 2011.889) (27. The fair value and gross amount of trade and other receivables amounted to P13 million.524) (31.628) (P473. respectively. is still subject to change.233) (1.729 116.037.646 = P522. Acquisition of CTI and MTI On December 29. Sapientis aquired 70% interest in CTI through conversion of the deposits into common stock. *SGVMC214977* .506) = The purchase price allocation has been determined provisionally pending completion of an independent valuation and as such. including MTI.324 143.122 = P49.524) (735.729 143. The acquisition indirectly includes the acquisition of MTI. the Company’s consolidated net income and revenue would have been P2. the SEC approved the increase in authorized capital stock of CTI to accommodate the subscription of Sapientis. The Company recognized the entire excess of the consideration paid over the provisional values of CTI’s identifiable assets and liabilities as goodwill. The Company elected to measure the noncontrolling interests in CTI at the proportionate share of its interest in CTI’s identifiable net assets.091 (649.339 116.934 12.334 million and =25.

Prior to date of NTC’s approval.443 437. Acquisition of Sky Cable PDRs On March 31. 2012. MTI assumed the related outstanding liabilities to CDMA telecommunications equipment amounting to P866 million..987 4.355. The fair values of the identifiable assets and liabilities of Sky Cable at the date of acquisition and the corresponding carrying amounts immediately before the acquisition were: Fair Value Recognized on Acquisition Carrying Value = P779. j. On February 1.627 1.270 2. For financial reporting purposes.917 4. the initial accounting for the business = combination is not yet complete.047. 2011.583.695 15.469. Bayantel successfully = transferred all its rights.047. interests and obligations related to the WLL Business to MTI.270 = P779. On January 27. As of March 2. interconnection trunks. In addition.1% to 56.080. Bayantel obtained the approval of its BOD and Rehabilitation Court to sell the WLL Business to MTI. 2012. 2011. the National Telecommunications Commission (NTC) approved the sale and transfer of Bayantel WLL Business and related assets to MTI.7%.568 – 404.43 i. The acquisition of PDRs with underlying Sky Cable shares is accounted for as a business combination using acquisition method.229) (2.917 437.695 2.627 – 1.969.148 – 915. Bayantel executed an asset purchase agreement with MTI. Acquisition of Bayantel Wireless Land Line (WLL) Business and Related Assets On December 7. Sky Vision agreed to issue 67.066 million will be = paid in cash of P200 million and through assumption of Bayantel’s outstanding liabilities = amounting to P866 million.248 PDRs with underlying Sky Cable shares to ABS-CBN for P659 million. The agreement includes the transfer of the related Code Division Multiple Access (CDMA) telecommunications equipment needed to operate the WLL Business. 2012.071. The Company elected to measure the noncontrolling interest in Sky Cable at the proportionate share of its interest in Sky Cable’s identifiable net assets.071. the economic interest = of the Company increased from 47.328 (2.649 133. subscribers and employees.583.229) Cash and cash equivalents Trade and other receivables Inventories Other current assets Property and equipment Customer relationships (see Note 12) Trademark (see Note 12) Deferred tax asset Other noncurrent assets Goodwill Trade and other current liabilities (Forward) *SGVMC214977* .443 15. The transfer also includes the required frequencies. titles.789 1.789 404. licenses. The acquisition of Bayantel WLL Business and related assets will be accounted for as an acquisition of a business. Total purchase consideration amounting to P1.

465.768) (328.134.428 million = = are doubtful of collection and were provided with full valuation allowance.489.048 million = and P3.3% of fair value of net assets) Fair value of previously held interest Goodwill arising on acquisition (see Note 16) Net cash flow on the acquisition are as follows: Net cash acquired with the subsidiary Cash paid Net cash inflow (P190. the Company is organized into three business activities .241) = P5.270 (658.241) 4.843) (46.108 = P779.075 7.275) (389.836 (P190.933.699) (363. Roadrunner became a wholly = owned subsidiary of the Parent Company.broadcasting. Segment Information Segment information is prepared on the following bases: Business Segments For management purposes. From the acquisition date.407 = P2. Consequently. The goodwill of =2. *SGVMC214977* . Trade and other receivables amounting to P1.323) = (1.606.440. § Broadcasting segment is principally the television and radio broadcasting activities which generates revenue from sale of national and regional advertising time. and other businesses.323) = (1. cable and satellite. k. respectively.399.476 million.699) – (328. Acquisition of Noncontrolling Interests in Roadrunner In December 2011.648 The fair value and gross amount of trade and other receivables amounted to P2. Sky Cable has contributed P132 million to the consolidated net = income of the Company.275) (389. 5.44 - Unearned revenue Long-term debt Income tax payable Accrued pension obligation Deferred tax liability Other noncurrent liabilities Net assets Consideration transferred Noncontrolling interests (43.710 4.571 658.622 2.338) (46..622) = P120. the Parent Company acquired the 1% interest in Roadrunner from the noncontrolling shareholders for P3 million.165. This segmentation is the basis upon which the Company reports its primary segment information.466 million comprises the fair value of expected synergies arising from P acquisition.

core net income. Canada and Japan). The transfers are accounted for at competitive market prices charged to unrelated customers for similar services. taxes and depreciation and amortization (EBITDA) and EBITDA margin. EBITDA margin pertains to EBITDA divided by gross revenues. the Company is involved in broadcasting. cable operations and other businesses. the Company’s performance is evaluated based on consolidated net income for the year. Net income for the year is measured consistent with consolidated net income attributable to equity holders of the Parent Company in the consolidated financial statements.. its home country. earnings before interest. Australia. arising from the acquisition of Sky Cable. it operates in three major geographical areas. gain on acquisition and exchange of debt and elimination of interest income pertaining to the accretion of receivable discount. Inter-segment Transactions Segment revenue. Management monitors operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. § Geographical Segments Although the Company is organized into three business activities. Such transfers are eliminated upon consolidation. *SGVMC214977* . Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit and loss in the consolidated financial statements. Core net income for the year is measured as consolidated net income attributable to equity holders of the Parent Company before adjustments required under PFRS 3 which relate to the amortization of customer relationships and depreciation and amortization of fair value increase in property and equipment. Other businesses include movie production. Europe. On a consolidated basis. The cable and satellite business includes cable television services of Sky Cable and its subsidiaries in Metro Manila and in certain provincial areas in the Philippines. net of related tax effect. including delivery of television programming outside the Philippines through its DTH satellite service.45 § Cable and satellite business primarily develops and produces programs for cable television. segment expenses and operating results include transfers among business segments and among geographical segments. In the United States and in other locations (which include Middle East. the Company operates its cable and satellite operations to bring television programming outside the Philippines. In the Philippines. cable television channels and blocked time on television stations. consumer products and services.

420.896) (9.787) 93.079.535 = P1.702.291 (684. *SGVMC214977* .468.884 = (59.061 (287.055) = P1.835) 2010 = P3.368) (1.429) P2.513.997 (2.430) 177.107. 2011 P6.003.837.738 (1.846 = (2.46 The following table shows the reconciliation of the core net income to consolidated net income attributable to equity holders of the Parent Company for the years ended December 31. 2010 and 2009: Consolidated EBITDA Depreciation and amortization Amortization of intangible assets* Finance costs** Interest income Provision for income tax Consolidated net income attributable to equity holders of the Parent Company **Excluding bank service charges.969) (1.342 = P3.300.397 – – 20. 2010 and 2009: Core net income PFRS 3 adjustments: Depreciation and amortization Amortization of customer relationships (see Note 12) Gain on acquisition and exchange of debt Interest income Income tax effect Consolidated net income attributable to equity holders of the Parent Company 2011 P2.015.879 (44.287) (45.178.710) = P3.836) 121.642. movie in-process and video rights and record master.072 = – – 52.072 = 2010 = P8.186) 2009 = P1.919 P2.631 The following table shows the reconciliation of the consolidated EBITDA to consolidated net income attributable to equity holders of the Parent Company for the years ended December 31..520 (2. 2011. 2011.787.420.702.762 (153.681) (883.757) 106.575.646 (153.397 **Excluding amortization of story.540) 36.588.287) (21.178. music and publication rights.007) (715.257.631 2009 = P6.137) (1.023) (872.

044 17.216.982 438.642.195 = 2.928 14.649 (220.508) 177.145.468 – 220.022) = – – – (P1.508 = = P1.061 (29) 1.555 (437.131) 88.065) (13.539.460 (91.346 41.983) = 2009 = P– (988.412.143 345.948 132.291 (2.800.380 237.154 = P34.087) 14.124) – (476.078 P6.482 = 12.300) = P1.116 = P3.219 – 179.422 (P131.368.151.109.071 Operating liabilities Interest-bearing loans and borrowings Deferred tax liabilities Obligations under finance lease Total liabilities Other Segment Information Capital expenditures: Property and equipment Intangible assets Depreciation and amortization Noncash expenses other than depreciation and amortization P6.443.116 (100.097.330) 777.632 P119.391 = P38.508) = P942.055 68.468.083 – 166.463) 16.823 490.850 = P34.981 123.869.650.521.199.329 = Other Businesses 2010 = P1.839) – (P810.472.300.154.200 282.250 = P2.523 = P2.999) (P5.668.023 (746.795 P19.148 = P1.710) = P3.430 = = P6.464.231.964 = Broadcasting 2010 = P20.846) = (P36.958.991 = P14.531.055) = P1.442.762 = P8.071 = P31.107.136.720 7.941 P20.595.687 = 188.586 57.002.852 = 351.353.520 327.533) P971.520 27% = P2.090.408.386 = P1.232 2.865) (P1.530 2011 P10. 2011: 2011 Revenue External sales Inter-segment sales Total revenue Results Operating results Finance costs Foreign exchange gains (losses) .596 = 1.320) = (P1.860.497) = 2011 P28.598.690 15.130.920 P2.225.133 (32.604 (684.955.420.908 = P10.777) (51.241 (91.490) = (P505.747 2009 2011 P– = (1.441.847 (911.815 2.344 = P9.668 P10.520.211 = P3.104 *SGVMC214977* .395 P863.462 = P9.942 – 162.412.479) = 3.266 = = P1.810 (287.099) (15.037 – = P814.418 = 869.808.450.646 = P6.340.058.346 1.357.857 = = P15.219) = = (P19.674.830.087) P1.213.797) = 68.776.933.680 (128.453 = P18.at equity Deferred tax assets Total assets P16.274) (3.195.897.942 (P772.996) = 39.365.316.279 – 66.956.790 (68.466 1.464) (29.239 3.300) = P1.664 13.288 = P1.808) = P44.181 = 232.076 = = P37.909 = P13.502 442.958 194.011 – 567.901 = – 35.088.452 P2.960.097.355 = 10.780) 62.149 424.037 14.312) (P14.291.042 = = P4.546 = 1.468.000 2009 = P25.520 = Cable and Satellite 2010 = P10.349 (99.559.601 (205.572 = P2.712 – 53.211 = P21.173 P44.net Interest income Equity in net earnings (losses) of associates Other income .522.235.513 = = (P4.040 (538) 38.817 – 5.819 = 41.702 3.667 11.092 40.911) 90.341 (967.157 1.517 = P1.877 154.781 = = P20.680 = P2.662.022) = (P3.129 = (726.365 – P2.993 (140.849) 218.081.664) (P14.961 P1.113 334.334 = P563.841) 64.606 – = P25.766 = = P1.270.544 384.202.852) – (31.077.380) (P1.185 – 72.080 = P1.042.026.643 = P1.174.128.395 535.461) (24.525 = P20.612 – 151.000 – = P32.285 (P463.net Income tax Net income Core Net Income EBITDA EBITDA Margin Assets and Liabilities Operating assets Investments in associates .398.237 2009 = P13.138 = P22.529.606 = P10.630.086) 118.990 – 43.373.814 7.579 512.820.829.949.809) P1.413.324.820.587 483.017 P7.460 P1.193 154.978 43.787 = P1.163.000 4.897.532) = P855.235 (3.709) = (8.886 = P10.745 = P2.930 P5.841.884 = P6.466 = P4.921.958.545 = P6.219.106.660 = (5.576.480) 3.291.147 = (167.163.112 136.605 662.043 = P809.028.427.069 199.493 = P1.544.971 8.795.900 = P33.139.199) = (557.024 = – 112.298) – = P– – 242 – P3.812 = P80.738 142 329.946 40.127.808.871) (43.609 = P75.805) = (1.784.782 3.084 689.003.507.767.151.035.292 9.028.277 P16.175 1.003.470.272.999 2009 2011 P1.379 = = P3.574 347.152 273.231.012 P– = – (386.231 106.137.165) = P663.983) (P2.095 – = P1.008) – = P– – (194.330) 524.981) – (428.275) = P11.199.505.211 = P14.119 93.993 – (P5.513.518) 419.418 = = P11.621 87.543.532.967.547 329.070 31.668 (912.737) – (P719.511 339.279 = P15.715 – (71.661.922) 57.012.618 (2.472.666.409 = 1.854 (P2.624.734 (126.320) = – – – (P2.185 1.971 642.454 2.997 26% P22.992.180.287.373 P38.593 1.837.560 = P15.111 (29) 2.210 1.248 239.859.787.041.769.117.869 P1.126) = P2.859.231.410.062.017.789 402.207.102 = = P4.712 148.429) P2.427 (372.838.079.732.501 438.770 33.948 = – P28.466 96.759.015.846 = 24% = P4.772 (1.402 – 571.113 961.266 4.681 108.814 3.877 = P15.363 P17.534.571 P5.921 142 663.061.730.401 220.887 (1.380 P24.778 = P5.189.031.497) (P988.470) (97.948 = Consolidated 2010 = P32.076) = P1.626.259 = 15.433.47 Business Segment Data The following tables present revenue and income information and certain asset and liability information regarding business segments for each of the three years in the period ended December 31.237.759.486) 55.201) 1.589 1.683.586 – = P6.654 8.865) = Eliminations 2010 = P– (2.460) – (496.520 – 108..950 9.916 = – 183.179) (13.163 = P2.044.

174.767 – P112.500.539.497) P28.468.865) (2.045 = 2.324.626.655.379.912 = 15.173 = P1.852) – (31.665 P28.398.099) 41.000 – = P32.003.149 622.361 = P438.736 – 94.361 – = P844.000 = P37.076 = = = = P3.070 532.740 = P2.983 988.391 = P38.497) – (P988.291.819 = = = = – (15.065) (13.999) (P5.365.800 P26.971 642.782 = P3.992.062.865) (P2.346 41.412.946 40.466 1.850 2009 = P P23..800 = – 97.814 P91.574 879.455 13.190.464.439 = United States 2010 2009 2011 P1.at equity Deferred tax assets Total Assets Other Segment Information Capital expenditures: Property and equipment Intangible assets = P1.702 = P2.526 = P453.946.094 1.520 = P2.497 1.003.859.753 P58.782 = P2.906.199. 500.412.906.956.365.542 = P42.808.373.003.017 = P2.071 Investments in associates .346 1.897.983) = P2.084.894 – = P139.219) 689.897.993 P20.154 = P34.709) P44.767.994.685 (P4.865 = = P25.868 2009 2011 Eliminations 2010 2009 2011 Consolidated 2010 = P32.665) (P14.606 = P34.629 = P3.606 – = P25.565.476 = P2.814 = = P33.358 – = P68.132 = P– P– = – (1.381) (P1.195 = 2.234 P 8.958.948 = (988.820.474 (P19.48 Geographical Segment Data The following tables present revenue and expenditure and certain asset information regarding geographical segments for each of the three years in the period ended December 31.814 *SGVMC214977* .628 = – P3.832.949.958.702 = P2.537 – P– = – = P– – = P– – P3.062.277 =35.948 = = = P25.628 = P2.734.789 (24.929 P = P4.488 = Others 2010 = P844. 365.373.248 = P48.837 = – = P100.891.154.610.312) (P14.897.589.098.429 – – = P4.291.469 = P5.633. 2011: 2011 Revenue External sales Inter-segment sales Total revenue Assets Operating assets Philippines 2010 2009 2011 P3.151.429 P = P4.574.334.766.077.199.705 = 2.028.136.461) (8.084 14.098.861.808) P44.639 P2.995.520 = – P1.162 1.629 =3.010 =19.808.553.488 = – – P2.028.529.548 – 91.653 = – = P162.342 – 15.531.598.625 =44.113 961.983) = = = P– P28.151.132 (P1.505.153.153.

248.870 = P5. respectively.880 261.134 627.635.095 668.284 Trade receivables are noninterest-bearing and are generally on 60 to 90 days term upon receipt of invoice by the customer.49 - 6.328 260.195 8.951. 7.248 1. Cash and Cash Equivalents Cash on hand and in banks Cash equivalents 2011 P3.948 P8.334 Cash in banks earn interest at the respective bank deposit rates. Advances to employees and talents are usually settled within one year.319 200. refer to Note 22.236.850 = P7.053 = 2010 = P2. For terms and conditions relating to due from related parties.682 882. P107 million and = = = P93 million in 2011. Cash equivalents are short-term placements.733 31.876.797.182.750 7.014.128.286.821. Trade and Other Receivables 2011 Trade: Airtime Subscriptions Others Advances to suppliers Advances to employees and talents Due from related parties (see Note 22) Others Less allowance for doubtful accounts P5. Interest earned from cash and cash equivalents amounted to P 177 million.105 = 5.461 = 768.. Advances to suppliers are generally applied against future billings within next year.464 2.293 224.103.834 171.869.149 1.531.103. and earn interest at the respective short-term placement rates.166 = 2010 = P4.929 P8.049. Other trade receivables are other revenue generated from the sale of goods and services and usually collected within one year.030 1. which are made for varying periods of up to three months depending on the immediate cash requirements of the Company.327 1. *SGVMC214977* . 2010 and 2009.

- 50 Movements in the allowance for doubtful accounts are as follows:
Airtime = P338,482 323,733 (170,969) 491,246 38,863 (4,666) P525,443 = Trade Subscriptions = P98,511 43,913 (87,705) 54,719 132,199 (128,390) P58,528 = Others = P46,577 35,142 (59,448) 22,271 83,731 (82,181) P23,821 = Nontrade = P47,647 17,448 (5,481) 59,614 154 1,369 P61,137 = Total = P531,217 420,236 (323,603) 627,850 254,947 (213,868) P668,929 =

Balance at January 1, 2010 Provisions (see Note 26) Write-offs and others Balance at December 31, 2010 Provisions (see Note 26) Write-offs and others Balance at December 31, 2011

Allowance for doubtful accounts are based on specific and collective assessment by the Company. Airtime receivables include unbilled airtime arising from advertisements which have been aired during the year but billing or acceptance by the customer has been delayed due to time lag in completing all required documents. Invoicing normally takes around 7 to 30 days from airing. Subscription receivables include unbilled subscription, where revenue has been accrued based on the rates in the subscription agreements multiplied by the estimated number of subscribers based on the latest report from the cable providers. Billing has been delayed due to 30 to 60 days lag in the submission of actual subscribers report from cable providers. The aging analysis of the unbilled receivables follows: Less than 30 days 31to 60 days 61to 90 days 2011 P780,702 = 2,479 29,342 P812,523 = 2010 = P631,401 14,824 39,183 = P685,408

8. Inventories 2011 At net realizable value: Merchandise inventory Materials, supplies and spare parts At cost Office supplies P90,405 = 43,769 693 P134,867 = 2010 = P119,659 32,323 545 = P152,527

Merchandise inventory consists mainly of records and other consumer products held for sale by other subsidiaries. Materials, supplies and spare parts comprise materials and supplies of the Parent Company and cable, construction and installation supplies of Sky Cable. The cost of inventories carried at net realizable value amounted to P260 million and P297 million as of = = December 31, 2011 and 2010, respectively.

*SGVMC214977*

- 51 -

9. Other Current Assets Creditable withholding and prepaid taxes Preproduction expenses Prepaid expenses and others 2011 P463,656 = 323,492 228,899 P1,016,047 = 2010 = P171,966 257,249 160,037 = P589,252

Prepaid expenses include prepayments for rentals, transponder services, license fees, membership dues, advertisement and other expenses.

10. Property and Equipment
2011 Television, Radio, Movie, and Auxiliary Equipment P13,622,658 = 1,936,472 – (1,649,933) (57,689) (6,108) 13,845,400 7,855,073 1,351,320 – (689,825) (92,865) 1,800 8,425,503 P5,419,897 = 2010 Television, Radio, Movie, and Auxiliary Equipment = P12,563,998 1,414,730 (270,749) (38,745) (46,576) 13,622,658 6,993,865 1,253,298 (266,959) (76,986) (48,145) 7,855,073 = P5,767,585

Land and Land Improvements Cost Balance at beginning of year Additions Effect of business combination (see Note 4) Disposals/retirements Reclassifications Translation adjustments Balance at end of year Accumulated Depreciation and Amortization Balance at beginning of year Depreciation and amortization (see Notes 24, 25 and 26) Effect of business combination (see Note 4) Disposals/retirements Reclassifications Translation adjustments Balance at end of year Net Book Value P505,611 = 41,312 – (1,233) 87,450 – 633,140 4,066 3,391 – – – 785 8,242 P624,898 =

Buildings and Improvements P10,298,092 = 112,218 207,772 (86,123) 57,753 (1,106) 10,588,606 4,012,738 467,704 206,486 (64,665) (783) 6,584 4,628,064 P5,960,542 =

Other Equipment P6,238,789 = 919,271 1,414,017 (87,688) 266,567 (3,248) 8,747,708 4,088,350 765,451 1,298,964 (96,344) 93,648 21,626 6,171,695 P2,576,013 =

Construction in Progress P490,370 = 529,922 – – (354,081) (5,446) 660,765 – – – – – – – P660,765 =

Total P31,155,520 = 3,539,195 1,621,789 (1,824,977) – (15,908) 34,475,619 15,960,227 2,587,866 1,505,450 (850,834) – 30,795 19,233,504 P15,242,115 =

Land and Land Improvements Cost Balance at beginning of year Additions Disposals/retirements Reclassifications Translation adjustments Accumulated Depreciation and Amortization Balance at beginning of year Depreciation and amortization (see Notes 24, 25 and 26) Disposals/retirements Reclassifications Translation adjustments Balance at end of year Net Book Value = P494,702 10,909 – – – 505,611 3,884 182 – – – 4,066 = P501,545

Buildings and Improvements = P10,175,525 244,246 (162,200) 48,404 (7,883) 10,298,092 3,585,897 527,213 (95,140) 20 (5,252) 4,012,738 = P6,285,354

Other Equipment = P5,201,757 1,105,782 (240,822) 174,224 (2,152) 6,238,789 3,434,592 793,182 (214,558) 76,966 (1,832) 4,088,350 = P2,150,439

Construction in Progress = P296,676 378,679 – (183,883) (1,102) 490,370 – – – – – – = P490,370

Total = P28,732,658 3,154,346 (673,771) – (57,713) 31,155,520 14,018,238 2,573,875 (576,657) – (55,229) 15,960,227 = P15,195,293

*SGVMC214977*

- 52 Certain property and equipment of Sky Cable and PCC with a carrying value of P492 million as of = December 31, 2009 were pledged as collateral to secure the long-term debt of Sky Cable and PCC. On October 26, 2010, the loans were fully paid. As of March 2, 2012, the release of security interest on the pledged properties is still in process (see Note 18). Certain property and equipment with cost amounting to P13,547 million and P10,979 million as of = = December 31, 2011 and 2010, respectively, were fully depreciated but are still being used by the Company. Unamortized borrowing costs capitalized as part of property and equipment amounted to = P802 million and P834 million as of December 31, 2011 and 2010, respectively. There were no = borrowing costs capitalized in 2011 and 2010. Property and equipment includes the following amounts where the Company is a lessee under a finance lease (see Note 30): Cost - capitalized finance lease Accumulated depreciation Net book value 2011 P531,761 = (494,160) P37,601 = 2010 = P597,885 (512,734) = P85,151

11. Investment Properties This account pertains to a parcel of land purchased by ABS-CBN International, with a two-storey house constructed thereon, located in Redwood City, California, USA. The real property which was acquired in July 2008 at a purchase price of US$1.4 million (P67 million) was intended to be = held by ABS-CBN International as investment properties. To fund the acquisition, ABS-CBN International obtained loan from Citibank, North America amounting to US$1.05 million (P50 million) for which the property was pledged as collateral (see Note 18). = Cost and related accumulated depreciation of investment properties are as follows: Land Cost Balance at beginning and end of year Accumulated depreciation: Balance at beginning of year Depreciation (see Note 26) Translation adjustments Balance at end of year Net book value P30,688 = – – – – P30,688 = 2011 Building P30,688 = 2,464 1,103 13 3,580 P27,108 = Total P61,376 = 2,464 1,103 13 3,580 P57,796 =

*SGVMC214977*

.968 = – – – – – 459.916 – 770.473.313 205.372 – (2.968 = Production and Distribution Business Middle East Program Rights Balance at beginning of year Additions Effect of business combination (see Note 4) Amortization and writeoff (see Notes 24.609 – P128.391 – = P471.160 92.068 P– = P471.568 – P915. Music and Publication Rights = P7.376 1.510.051 P1. which consist mainly of depreciation. the fair market value of land and building.148 (9.951 = Video Rights and Record Customer Master Relationships P9.613) – – 71.336 12.968 – P459.359 3.375.419 481.062.423 = *SGVMC214977* .945) (4.207 = P8.061) (1.148 (105) 2. 12.968 (5.464 = P58.968 – = P459.375.183) – (466.958 664.452 – (240.670 – (5.421 1.501 P10.340 (1.421 1.572 – (990.830 P3.711) – – 6.912 As of December 31.252.186) – 471.437) – 9.595.111) – – 2.711.702 (845.740.369 = 1.359 P2.580 – 576.148 (105) 2.492 101 Video Rights and Record Customer Master Relationships = P1.688 1.369 7.577 – Cable Channels CPI = P459.325.493 = P89. 25 and 26) Translation adjustments Balance at end of year Less current portion Noncurrent portion = P2.667 = P1. Music and Publication Rights P7.958 = 1. 2011.368 = Movie In-Process P97.458 P3.568 – – – 915.359 P3. Direct operating expenses.369 = P– (143.716 (3.015 844.291 (224) – 7.945) 89.304) 61.391 = – 133.621 = 214.916 = = – 1.652) 30.351 = P492.414 (4.020.095) 6.680 (3.881 = = Program Rights Balance at beginning of year Additions Amortization and write-off (see Notes 24.510.959 = Trademark P– = – 915.882 Trademark = P– – Total = P99. amounted to P59 million.464 = P28.372) (4.250 = 31.621 89.250 = P– (21.368 Movie In-Process = P35.688 Total = P64.066 – 1.030 79 P5.160 6.048.574) – 97.250 9. amounted to P1 million = in 2011.391 – – – – = P– – – 459.172.968 – Production and Distribution Business Middle East Cable Channels CPI P459.340 (1.077. 2010 and = 2009.699 P92.652) 30.526) (1.688 – – – – = P30.463.982.53 2010 Building = P32.835) (466.531 = – 1.068 35. 25 and 26) Disposals Translation adjustments Balance at end of year Less current portion Noncurrent portion P2.095) – 128. = Rental income derived from the investment properties amounted to P2 million in 2011.377. 2010 and 2009. Program Rights and Other Intangible Assets 2011 Story.852) – – 35.458 4.460 60.568 = Total P89.425) – 2. which is based on market price of similar properties within the area.609 = 2010 Story.224 Land Cost: Balance at beginning of year Translation adjustments Balance at end of year Accumulated depreciation: Balance at beginning of year Depreciation (see Note 26) Translation adjustments Balance at end of year Net book value = P32.

892 = 2010 = P414.484 (373.992) P459. 2011 and 2010.762 (53.000 (130.818 – – P264. The cable channels include Lifestyle Channel.960 = (114.458 = 2010 Cable Channels CPI = P574. prepaid and platinum. broadband and other Sky Cable’s subsidiaries at conversion date who have sustained their relationship with Sky Cable and subsidiaries for more than a year (see Note 4). As of December 31.358 (122.466 = (239.066 AFS investments consist mainly of investments in quoted and unquoted ordinary shares. As of December 31.276 25.359 Cost Accumulated amortization Net book value Customer Relationships P133. As such. this was assessed to have an indefinite life.775) = P471. 2010 and 2009.166 (135.985) 9. This agreement grants the Company the right to operate in the Middle East with ADD as sponsor for a period of 25 years. Based on the Company’s analysis of all the relevant factors.918) 11. The fair value gain on AFS investments amounting to P10 million.148 = (4.718 The customer relationships acquired in a business combination relate to the core subscribers of Sky Cable postpaid. Available-for-Sale Investments Balance at beginning of year Additions Disposals Unrealized fair value gain on AFS investments Impairment loss (see Note 27) Translation adjustments and others Balance at end of year 2011 P265.54 Costs and related accumulated amortization of other intangible assets are as follows: 2011 Cable Channels CPI P574.992) = P459.391 Total = P1.993 (31.900) P92.358 = (119.539) P128.394.431) P681.999) = P89. 13.960 (114. Cinema One. *SGVMC214977* . Based on the Company’s analysis of all the relevant factors. Production and distribution business for Middle East operations represents payments arising from the sponsorship agreement between Arab Digital Distribution (ADD) and ABS-CBN Middle East..609 = Total P920.968 = Production and Distribution Business Middle East P212. respectively. were recognized in other comprehensive income. cable channels = were tested for impairment.186) = P265. The carrying amount is net of previously recognized amortization amounting to P115 million. 2011. and Myx Channel acquired by CPI from Sky Vision.035 = Customer Relationships = P607. there is no foreseeable limit to the period over which this business is expected to generate net cash inflows for the Company and therefore. these were assessed to have an indefinite life. there is no foreseeable limit to the period over which the business is expected to generate net cash inflows for the Company and therefore.066 = 21. P12 million and = = = P74 million in 2011.868) (1.968 Production and Distribution Business Middle East = P212.766) = P1. Trademark pertains to Sky Cable distinctive sign to promote and distinguish its products and services from those of other entities. yearly amortization has been discontinued in 2001.020. trademark was tested for impairment.

179) (20.488 shares of Series P common stock of Multiply. The Stock Purchase Agreement provides that during the two-year period immediately following the Initial Closing date. The Parent Company’s dividends were subsequently applied as payment for the additional investment in Amcara. In 2011.390.084 = 2010 = P541. a Delaware. 2010.. The remaining equity of ABS-CBN Global in Multiply is 2.98 per share for an aggregate purchase price of US$5 million.051 shares of Series P common stock at the same price per share as the original purchase for an aggregate purchase price of up to US$4 million. (Star Cinema) Sky Vision Details of the account are as follows: 2011 Acquisition costs: Balance at beginning and end of year Addition Balance at end of year Accumulated equity in net losses: Balance at beginning of year Dividends Equity in net earnings (losses) during the year Balance at end of year P541. the remaining carrying value of investments in associates pertains to Amcara. *SGVMC214977* .524. Incorporated (Amcara) Star Cinema Productions.0 45. (Multiply). Investments in Associates The following are the associates of the Company as of December 31.0 18.179) = P41. Investments in Star Cinema and Sky Vision have been reduced to zero due to accumulated equity in net losses.236) (29) (520. the BOD of Amcara approved the declaration of cash dividends to all stockholders of record as of June 15.25% of the outstanding shares of Multiply. ABS-CBN Global sold 1. Multiply may issue additional 1. 2011.292 (500. equivalent to 5% equity interest. 2011 and 2010: Entity Amcara Broadcasting Network.993 shares of Series P common stock comprising approximately 3. US corporation engaged in independent social networking site.964.444) P41.64%. 14.292 = 20.321) – 142 (500.528 (500.113 Principal Activities Services Movie production Investment holding Percentage of Ownership 49. ABS-CBN Global.236 561. a subsidiary. As of December 31. in exchange for in-kind contributions of marketing and advertising supplied by ABS-CBN Global. 2011 and 2010.8 All the associates are incorporated in the Philippines. purchased a total of 2. 2008.292 – 541. On August 29.55 On November 12. ABS-CBN Global purchased the investment at US$1. Inc. Inc. intended to be used to acquire new users of Multiply’s services.

333) (228.332 130. Pursuant to PD No.930 Tax Credits Tax credits represent claims from the government arising from airing of government commercials.985 = P39. *SGVMC214977* .311.661 = 204.960) (P346) = 15.400 119.348 (66. On January 9. the Department of Finance issued a favorable ruling on the request of the Company to utilize the tax credits in the payment of duties and taxes on the importation of digital terrestrial television boxes which will subsequently be distributed or made available to its customers and end-users.726 = 7. advertisements and cablecast services. 2012..net Deposits and bonds Deferred charges Others 2011 P2.937 = (32.614 (30.865 444.970.134) = P167. Deferred charges pertain to excess of cost over revenue from installation of decoders and set-top boxes. these will be collected in the form of tax credits which the Company can use in paying for import duties and taxes on its broadcasting and cable equipment.572 145.56 Condensed financial information of the associates follows: Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net equity Revenue Cost and expenses Net income (loss) 2011 P14.009) P7.027 253. The Company expects to utilize these tax credits within the next 10 years until 2021.676.892) (7.354. Amortization of deferred charges amounted to P56 million. Other Noncurrent Assets Tax credits with TCCs . 2010 and 2009. P53 million and = = = P47 million in 2011. 1362.807 = 2010 = P2.084.207.665 = P2.928 = 2010 = P11. respectively (see Note 25).174 P2.057 = P30.659 (61.197) P174.906 232. The tax credits cannot be used to pay for any other tax obligation to the government.

886.646 216.832 Goodwill pertaining to investment in Roadrunner amounting to P23 million was fully provided = with an allowance for impairment loss.157.57 - 16.464 Trade payables are noninterest-bearing and are normally settled on 30 to 90-day term.270 – 727.420 13.143. 17.865 1.832 Goodwill arose from the following acquisitions and business combination: Sky Cable (see Note 4) CTI (see Note 4) ABS-CBN International ABS-CBN Interactive Sapientis ABS-CBN Multimedia PCC 2011 P2.343 = 3.233 339.201 – – 2.503.397 (22.184 133.283.434 362. Trade and Other Payables Trade Accrued expenses: Production costs and other expenses Salaries and other employee benefits Taxes Interest Deferred revenue Installment payable Due to related parties (see Notes 4 and 22) Dividend payable Others 2011 P1. Accrued expenses are normally settled within the next financial year.201 6.018 190.061 (22.836 = 1.565) = P2.920 746.776.696 – 228.565) P3.749.141 221.524 = P9.064 P9.086 1.166.094 632.166. refer to Note 22. For terms and conditions relating to due to related parties.303.397 = 3.389 9.201 6.690.672 558.752 13.361.338 393.708 68.749.345 163.496 = 2010 = P1. *SGVMC214977* .672 – P3.125.389 9.889 2.143.844.037.164 = 2010 = P1.015 1.078.157 1.327.158.482 (1.454 = P2.496 = 2010 = P2.164.772.196 9..465. Goodwill Analysis of movement in goodwill follows: 2011 Cost: Balance at beginning of year Effect of business combination (see Note 4) Disposal (see Note 4) Translation adjustment Balance at end of year Accumulated impairment loss Balance at beginning and end of year P2.668) 3.150) (11.

693 P529.684 = 984.075 = Total = P400.5% in 2011 and 2010.278 = P7.614 655.326 – 73.766 – = P8. Installment payable relates to a contract entered into by MTI in 2004 with a supplier for the purchase of certain equipment amounting to $12 million which bears interest of 5% per annum.906 108. Accrued interest amounted to P122 million as of December 31.000 = P9. 2011.259 2010 Long-term Portion = P– 6.642.288 655.684 = Current Portion = P400.251 – P11. As of December 31.967.671 P10.022 Borrower Parent Company Sky Cable PCC ABS-CBN International Sapientis Total P10.977.975.780 = Current Portion = P531.731 990. 2011.472 980. 2011.691 2010 Long-term Portion = P7.211 = P7. This represents unsecured peso-denominated loans obtained from local banks which bear an average annual interest rates of 3. *SGVMC214977* .284 498..977.446.391 = 12.768 – P12. Outstanding balance as of December 31.756.000 6.933 = P531.364 11. In December 2008.445. The contract stipulates the existence of supplier’s lien over the purchased equipment and that this shall remain in force until such time that MTI has paid up to 40% of the contract price. 2011 amounted to P362 million = (US$8 million).472 Bank loans Term loans: Loan agreement Syndicated loans Obligations under finance lease (see Note 30) Total P400.445.698 – 41.000 = P675.881 = Total = P7.347 702.713 Parent Company The details of interest-bearing loans and borrowings of the Parent Company are as follows: Current Portion P400.819.813.198 132. This will be paid in full after the holding period of 5 or 6 years from date of grant which is January 1.364 53.000 = 9. Interest-bearing Loans and Borrowings Current Portion P529.58 Accrued production costs and other expenses represent accruals for various expenses related to the production of shows.538 498.649 702. Deferred revenue pertains to payments received before broadcast and subscription fees billed or received in advance.284 499. MTI signed a restructuring agreement with the supplier which stipulates payment of the outstanding balance over a period of 36 months.101 = 2011 Long-term Portion P10.000 = 87. = Other current liabilities include statutory liabilities which are payable within the next financial year.000 1.075 = 996.446.000 1.000 1.345 378. The Company allocated specified number of notional shares for selected key employees.517 – P663.975.500 41.259 10.731.500 40. 18.500 43. MTI has only paid 31% of the contract price.364 P10. Accrual for salaries and other employee benefits includes accrual for the Company’s retention program.500 41.193 120.511.432 132.731 Bank Loans.848.906 34.000 57.391 = 2011 Long-term Portion P– = 9.

906 million loan availed under the Loan Agreement. the P800 million Syndicated Loan facility and the Combined facility = agreements. Inc.. Banco de Oro = Unibank.. 2010. Bank of the Philippine Islands (BPI) Capital Corporation (the “Lead Arranger”).688 million. the Parent Company availed the amount of P6. 2004.350 million secured facility to refinance the entire Tranche A of the SCA facility = equivalent to US$31 million.. additional investment in the cable television business and funding capital expenditures and working capital requirements. The loan is pre-payable subject to a break cost. The loan is unsecured and unsubordinated with interest at 3-month PDST-F plus 0.59 Loan Agreement. signed a P1.15%. the “Lenders”).5% + MART1 T-bill) amounting to P2. BDO Capital & Investment Corporation and Security Bank Corporation (collectively. among others. On June 18. Insular Life Assurance Company Ltd. a floating rate facility (3. (collectively the “Co-Arranger”).Trust and Investment Group. . the BDO facility. making investments. On October 29. the Parent Company together with BDO. Tranche B. The refinancing effectively extended the maturity from June 2009 to December 2012 with an interest rate of 3-month PDSTF plus 2. the Parent Company availed the remaining amount of P3. the creation of liens and the effecting of mergers.65% per annum for the floating rate portion and 7-year PDST-F plus 0. the Parent Company prepaid all outstanding obligations under the SCA facility from the proceeds of P6.. Bank of the Philippine Islands . 2017. On December 13. the “Arrangers”) and PNB Capital & Investment Corporation and Insular Life Assurance Company Ltd.Asset Management and Trust Group shall serve as the loan’s facility agent. = On November 9. and = Tranche C. the Parent Company entered into an SCA with several foreign and local banks (Original Lenders) for a US$120 million dual currency syndicated term loan facility for the purpose of refinancing existing indebtedness incurred for the construction of the Eugenio Lopez. the selling or exchange of assets. Allied Savings Bank. a fixed rate facility (3. Security Bank Corporation (collectively. PNB Life Insurance. the Parent Company is in compliance with the provisions of this facility. 2010. the Senior Credit Agreement (SCA) facility. 2010. 2010. On November 9. Inc. On November 9. 2011. the payment of dividends.906 million loan availed under the Loan Agreement.094 million from = the Loan Agreement for working capital purposes. 2011. a floating rate facility (3.906 million from the Loan = Agreement to prepay existing debt facilities. The SCA is classified into three groups namely: § § § Tranche A.65% per annum for the fixed rate portion. namely. Jr. 2007. The loan is intended to refinance existing indebtedness and fund working capital requirements. Communications Center.5% + LIBOR) amounting to US$62 million. Banco de Oro Unibank. As of December 31. The loan is payable annually with a lump sum payment of the remaining balance on November 9. the issuing or selling of the Parent Company’s capital stock or some of its subsidiaries. The loan agreement contains provision regarding the maintenance of certain financial ratios and limiting. On March 11. Term Loans under the SCA. the Parent Company prepaid all outstanding obligations under the BDO facility from the proceeds of P6.5% + FXTN) amounting to P560 million. Inc. the Parent Company successfully signed a syndicated loan for P10 billion with Allied Banking Corporation. Bank of the Philippine Islands. Philippine National Bank. = *SGVMC214977* . = Term Loan Facility with BDO.

2008. Exchange Offer. To finance the settlement of the loans. 2012. the selling or exchange of assets. ABS-CBN settled the P944 million Sky Cable loans in the = amount of P662 million. Cash Offer.798 million = or 66% of Sky Cable total outstanding debt of P2. Mega International Commercial Bank Co. = On February 21. Manila Branch with = Mizuho Corporate Bank. Philippine Home Cable Holdings. Ltd. 2014.60 Syndicated Loans for Sky Cable Debt.. ABS-CBN signed a syndicated = loan for P800 million with ING Bank N. Ltd. *SGVMC214977* . ABS-CBN became Sky = Cable’s majority creditor. The total loans acquired by ABS-CBN amounted to P1. 2010. In the invitation dated July 27. BPI. The Parent Company’s obligation under these facilities is jointly and severally guaranteed by its principal subsidiaries.11% with final maturity on September 18. Inc. the issuing or selling of the Company’s capital stock or some of its subsidiaries. = On November 9. Thus. creation of liens and effecting mergers. The loan is unsecured and unsubordinated with interest rate of 3-month PHIBOR plus 2. the payment of dividends. United Coconut Planters Bank. 2007. the Parent Company prepaid all outstanding obligations under the = P800 million syndicated loan facility from the proceeds of P6. The amendment included the rescheduling of the principal amortization to commence in December 2011 with final maturity in September 2016. sell their Sky Cable Debt to ABS-CBN for up to 70% of the principal amount of the Sky Cable Debt (“Cash Offer”).906 million loan availed under the = Loan Agreement. The loan is unsecured and unsubordinated with a fixed coupon of 2. and Mizuho Corporate Bank... ii.EPCI. Debt discount which represents the difference between the nominal value and fair value of the debt issued related to the Exchange Offer amounted to P298 million. As of December 31. the Company is in compliance with the provisions of the = P854 million syndicated loan facility. Inc. Ltd. Inc. with BDO . 2004 among Sky Vision. ABS-CBN and the remaining third party creditors of Sky Cable approved the 2nd amendment of the Sky Cable Debt under a Facility Agreement. Manila Branch acting as the facility agent. ABS-CBN invited holders of outstanding loan obligations of Sky Cable evidenced by promissory notes issued under the Facility Agreement dated July 2.. namely. Holders of P944 million Sky Cable Debt opted for the Cash Offer while holders of P854 million = = opted for the Exchange Offer. (“Home Cable”) and certain institutions and Equitable PCI Bank . On September 18. acting as the facility agent.. or exchange their Sky Cable Debt for notes at up to 100% of the principal amount of the Sky Cable Debt to be exchanged (“Exchange Offer”). 2007. among others. The =854 million syndicated loan facility contain provisions regarding the maintenance of certain P financial ratios and limiting. On September 20. The total amount of money withdrawn is P662 million. Sky Cable. making investments. 2007. the incurrence of additional debt.V.800 million..Trust Banking (“Sky Cable Debt”) to offer to: i. ABS-CBN successfully signed a syndicated loan for = P854 million with the previous lenders of Sky Cable. Olga Vendivel and Wise Capital Investment & Trust Company.75% per annum with final maturity on September 20. 2011 and 2010.

BPI Asset Management and Trust Group as Trustee for various Trust Accounts.. making investments. the Parent Company successfully signed a P1 billion loan facility with Security Bank jointly arranged by BPI Capital Corp. as Fixed Loan Lenders and Allied Banking Corporation and Allied Savings Bank as Variable Loan Lenders. unsubordinated and guaranteed by certain assets of the Company’s subsidiaries. the payment of dividends. On January 5.. 2008. The Philippine American Life and General Insurance Company and The Insular Life Assurance Company. 2008. 2009. On September 30. 2008. The loan facility is unsecured and unsubordinated and guaranteed by certain Company’s subsidiaries. 2008. This was fully drawn on August 27. together with BPI Capital Corp and SB Capital Investment Corp acting as joint arrangers of both facilities. as Fixed Loan Lenders and Allied Banking Corporation and Allied Savings Bank as Variable Loan Lenders. On September 30. among others. creation of liens and effecting mergers.15% per annum with final maturity of August 27. Inc. The Philippine American Life and General Insurance Company and The Insular Life Assurance Company. the Parent Company availed P1 billion from the Fixed Loan Lenders with = fixed loan interest rate of 7-year PDST-F plus 1. The Parent Company is in compliance with the provisions of the Combined Facility Agreement until it was paid on November 9. The funds are used for capital expenditures and general corporate purposes. 2008. and SB = Capital Investment Corp. The Combined Facility Agreement contain provisions regarding the maintenance of certain financial ratios and limiting. 2013. The agreement shall combine both loan facilities in all material respects to be administered by BPI Asset Management and Trust Group acting as facility agent. the issuing or selling of the Parent Company’s capital stock or some of its subsidiaries. The interest rate on the loan is 3-month PDST-F plus 2. Ltd. On August 15.. Term Loan Facility with BPI. Ltd. 2008. the incurrence of additional debt..5% per annum and final maturity of October 30. the Parent Company successfully signed a = P2 billion loan facility with BPI Asset Management and Trust Group as Investment Manager for ALFM Peso Bond Fund.15% with a final maturity on January 5. *SGVMC214977* . lender of the facility agreement executed on August 15. all lenders of the facility agreement executed on September 30. the selling or exchange of assets. 2014. 2010. 2008.. The funds are used for capital expenditure and general corporate purposes.61 Term Loan Facility with Security Bank. This was jointly arranged by BPI Capital Corp and SB Capital Investment Corp. 2015. BPI Asset Management and Trust Group as Investment Manager for ALFM Peso Bond Fund. The loan is unsecured. Inc. the Parent Company availed P400 million from the Variable Loan Lenders = with a variable loan interest rate of 3-month PDSTF plus 2. On October 30. BPI Asset Management and Trust Group as Trustee for various Trust Accounts. the Parent Company signed the Combined Facility Agreement with Security Bank Corporation.

072 28.913 = 15.252 109.093 57.157 P232.398 = P137.000 9. which bear interest equal to the 90-day MART1 rate or the 91-day treasury bill rate in the absence of MART1. plus 1%.192 = 2010 = P39.688 Debt issue costs are amortized over the term of the loans using the effective interest method as follows: Loan Agreement = P12.496 = 2010 = P181.009 = P232.215 – – = P13.108 – – = P138. the P800 million Syndicated = Loan facility and the Combined Facility Agreement.754.62 Schedule of Maturities and Repayments.000 = P10.207 Total = P100.900.221 40.252 5.133 The 2010 amortization includes unamortized transaction costs of P63 million as of prepayment = date of the debt facilities.963 30.207 100.436 = P290.758 14. the SCA facility. as of December 31 are as follows: Debt discount Transaction costs 2011 P138.037 4.504 Debt Discount = P47. 2004.339 = 94.302 12.564 69.000 100.000 Syndicated Loans = P– – 2012 2013 2014 2015 2016–2017 854.170 = P66.207 – – = P854.000 954.279 P58.653 Syndicated Loans = P4.496 2012 2013 2014 2015 2016–2017 Amortization of debt issue costs are as follows (see Note 27): 2011 Debt discount (charged to interest expense) Transaction costs P42. Repayments of long-term debt based on nominal values are scheduled as follows: Loan Agreement = P100. Sky Cable Under the Debt Restructuring Agreement (DRA) dated July 2.435 14.500.. 2006.072 28.000 9.010 51.000 = P9. in 20 unequal consecutive quarterly amortizations commencing on September 30.835 13. These should have been amortized until the final maturity of the respective debt facilities had it not been prepaid in November 2010.000 100.000 100. *SGVMC214977* .339 Total = P63. presented as a deduction from the Company’s long-term debt.207 Details of unamortized debt issue cost.784 2009 = P35.500. namely. the BDO facility.009 = P80. is payable in seven years inclusive of a two-year grace period.386 98. the restructured loans.000 100.

Sky Cable is in compliance with the provisions of this facility.915 = P8. 2010.303 1. The loan is amortizing with a final maturity of October 26. The amendment includes the rescheduling of the principal amortizations to commence in December 2011 with final maturity in September 2016. The loans were fully paid on October 26. which is one of the financial ratios required by its creditors in the agreement. among others. Union Bank of the Philippines and Robinsons Bank. It has an interest rate step up feature in case the loan is extended for another 2 years. The agreement also requires a certain restrictions with respects to the maintenance of financial ratios. 2010. The loan is intended to refinance the loan under the DRA.. However. As of December 31. = = Debt issue costs are amortized over the term of the loan using the effective interest method as follows: Year 2012 2013 2014 2015 2016 and onwards Amount = P1. capital expenditures and business acquisition outside the business plan. presented as a deduction from the Company’s long-term debt amounted to P8 million and P10 million as of December 31. The schedule of debt repayment based on the Facility Agreement is as follows: Year 2012 2013 2014 2015 2016 and onwards Amount = P10.419 1.000 10. respectively. 2011 and 2010. which consists of various property and equipment sufficient to cover at least 100% of the total outstanding amount of the loan (see Note 10). in December 2009. 2011. undertaking a quasi reorganization. Sky Cable was unable to comply with the debt service coverage ratio. In 2009. 2008.352 1. 2017. Sky Cable was able to secure a waiver of this ratio from the majority of its creditors as required by the agreement. amendments of its Articles of Incorporation or By-laws.000 Unamortized debt issue cost.000 10.000 = P990. the maintenance of certain financial ratios.000 950. ABS-CBN and the remaining third party creditors of Sky Cable approved the 2nd amendment to the Facility Agreement.490 2. declaration of cash dividends. On October 26. reducing its capital or change its fiscal year.63 On February 21. reorganization. Fixed Rate Corporate Notes Facility Agreement.000 10. The agreement provided for certain requirements and restrictions with respect to.479 *SGVMC214977* . Sky Cable availed a = P1 billion syndicated loan from BDO. incurrence of additional debt. The terms of the collateral trust indenture covering a portion of Sky Vision and Sky Cable’s loans provide that Sky Cable shall at all times maintain the required collateral value. The loan is unsecured and unsubordinated with interest at 5-year PDST-F plus 1% per annum.

25% in 2010. amounting to P132 million were obtained = from PCCI and other financial institutions for investment purposes. = *SGVMC214977* .5%. On May 25.000 200. ABS-CBN International availed of a loan from Citibank. both loans bears an interest based on higher of 3-month PDST-F plus 1% spread or Banko Sentral ng Pilipinas overnight rate less 15 basis points. The schedule of debt repayment is as follows: Year 2012 2013 2014 2015 2016–2028 Amount = P1. which are peso-denominated. The investment property acquired for which the loan was availed was pledged as collateral.500 ABS-CBN International On August 19. PCC acquired a term loan from BDO.701 1.607 1.64 In addition.500 = P498. California (see Note 11). Both are payable in installments commencing on April 16. The schedule of payment of the loan is as follows: Year 2012 2013 2014 Amount = P120. 2008. 2010.5% and the other half bears fixed rate of 8. The loans bear an annual interest rate of 6.802 35. in which half of the loan bears a MART1 rate plus 2..000 178. North America amounting to US$1 million (P50 million).768 Sapientis The short-term loans. 2009.517 1. The investment property is a residential home located in 1073 Rockport Avenue. 2011. = PCC On April 7. The loan has a term of 20 years and can be prepaid = starting on the 15th year. the P132 million short-term loan was repaid.141 = P41. The loan is supported by deed of pledge of Sky Cable’s shares of stocks in PCC and Continuing Suretyship Agreement executed by Sky Vision. Redwood City. Effective January 1. 2011. Sky Cable has obligation under finance lease amounting to P15 million (see Note 30).

810 P468. The amounts presented in the consolidated statements of financial position represent the face amounts of the obligations. 2010 and 2009 are as follows: Number of Shares Authorized Common shares . quarterly or semiannually installments over a period of one to two years.583.400 1. which represent the difference between the face amounts and the fair values of the obligations upon initial recognition.849 = 67. Unamortized discounts amounted to = P2 million and P5 million as of December 31. Customers’ deposits are initially recognized at fair value. In 2010.812 – 92.P1 par value = Issued Common shares 1. 2011 and 2010.215 – 148. Installment payable represents payables to suppliers for the importation and purchase of set-top boxes and decoders which are deferred over 36-month payment term.583 *SGVMC214977* .000 779. Obligations for Program Rights This account represents liabilities to foreign and local film suppliers for program rights purchased by the Company.500.130 = 2010 = P261. = 20. 21.312 Amount = P1. The liabilities are noninterest-bearing and are payable in equal monthly. respectively.. Equity Capital Stock Details of authorized and issued capital stock as of December 31.267 = P385. net of unamortized discounts.109 – 30.000 = P779.588 Customers’ deposits relate to Sky Cable’s subscription agreements with customers.000. ABS-CBN International reversed the asset retirement obligation associated with the leased land which was acquired by ABS-CBN International during the year.500.058 1. The discount is recognized as deferred credits and amortized over the estimated remaining term of the deposit as other income.65 - 19.198 43. Other Noncurrent Liabilities Customers’ deposits Installment payable Deferred credits Asset retirement obligation (see Note 4) Due to a related party (see Notes 4 and 22) Others 2011 P207. Asset retirement obligation in 2011 pertains to MTI as a result of the business combination (see Note 4). 2011. Customers’ deposits are refunded to the customers upon termination of service.

00 15. the BOD approved the declaration of cash dividend of = P1.282 as of December 31.000 1.00 1.724 996.000 Issue Price = P1.861.164.428.000 200.00 Issued Shares 111.954. 2009.00 15. On March 11. 2011 and 2010.00 1.324 178.000 200.090 million and P2. 2010. 1994 50% stock dividends July 25.071 million as of December 31.064 = 10. = Appropriated retained earnings is set aside for capital expenditures particularly for the purchase of Company’s property and equipment needed for business operations. 1996 50% stock dividends Authorized Capital Stock = P200.517 1.776.000 200.000 1. 2011. 1999.600) 21.500. Each PDR grants the *SGVMC214977* . 1992 Initial Public Offering (Primary) Secondary * ESOP* June 16.200 shares existing at the time of the IPO The Parent Company’s total number of stockholders is 6. 1995 100% stock dividends July 2.724 (Amounts in Thousands. On March 4.742 Amount P1.467 (7. the BOD approved the declaration of cash dividend of P0.209 224.523 (1.793. 2011 payable on = April 19.104 259. 1993 40% stock dividends August 18.062 and 6. Retained Earnings Unappropriated retained earnings available for dividend distribution is adjusted to exclude the Parent Company’s accumulated equity in net earnings of subsidiaries and associates amounting to = P2.560.793.000) 37.000 – 38. 2011 and 2010.154.620.000 500.200 12.209 2009 Number of Shares 15.000 200.209 2010 Number of Shares 21. 2009.742 6.104 *Included in the 111.400.954..500.069.064 Amount = P376.90 per share or an aggregate amount of P687 million to all stockholders of = = record as of May 5. 2011. respectively.327.327.10 per share or an = aggregate amount of P1.378 18.00 1. the BOD approved the declaration of cash dividend of P2.900) = P1.240 (395.510. 2010 payable on April 29. Except Number of Shares) This account represents ABS-CBN PDRs held by the Parent Company which are convertible into ABS-CBN shares.178. respectively.00 15.00 1.66 Below are the Parent Company’s track record of the registration of securities: Date of SEC Order Rendered Effective or Permit to Sell Event Registered and Listed Shares (Original Shares) March 31.502.082 – P1. These PDRs were listed in the PSE on October 7.637 million to all stockholders of record as of March 25.403.146 = Amount = P553. 2010.074 86.742 23.154.500 49. 2009 payable on or before May 29.11 per share or an aggregate amount of P865 million to all stockholders of record as of March = 31. PDRs Convertible to Common Shares 2011 Number of Shares Balance at beginning of year Acquisitions during the year Issuances during the year Balance at end of year 37.123) = P553.368 259.861. On March 25.600 (52.

directly or indirectly. Related Party Transactions Parties are considered to be related if one party has the ability.061 187.213 19.156 65..437 17.426 57. 1999 until the expiry date as defined in the terms of the offering. the Parent Company acquired 224. In = 2010.67 holders.737 674. Inc. the delivery of one ABS-CBN share or the sale of and delivery of the proceeds of such sale of one ABS-CBN share. as contribution to the retirement fund (see Note 29).600 ABS-CBN = shares. The ABS-CBN shares are still subject to ownership restrictions on shares of corporations engaged in mass media and ABS-CBN may reject the transfer of shares to persons other than Philippine nationals. a subsidiary of Lopez.440 40.549 30.277 *SGVMC214977* .830 592.548 42. to control the other party or exercise significant influence over the other party in making financial and operating decisions. Any cash dividends or other cash distributions in respect of the underlying ABS-CBN shares shall be applied by ABS-CBN Holdings Corporation.560. to ABS-CBN Global P31.400. = In 2010. which are convertible into 52. to some of its officers as payment for their bonuses (see Note 22).595 2009 = P24. the Parent Company acquired 23. the Parent Company issued P1 million of these PDRs. Bayantel and other related parties Airtime revenue from Bayantel and Meralco Management and other service fees Expenses and charges paid for by the Parent Company which are reimbursed by the concerned related parties Termination cost charges of Bayantel. The PDRs issued were based on quoted prices at the time of issuance.667 57.645 65. In 2011. which are convertible into = 7. towards payment of operating expenses and any amounts remaining shall be distributed pro-rata among outstanding PDR holders.322 = 2010 = P30. the Parent Company issued P396 million of these PDRs.000 PDRs and common shares for P10 million. issuer of PDRs. upon payment of the exercise price and subject to certain other conditions. Parties are also considered to be related if they are subject to common control.174 37. In 2009. significant transactions of the Company with its associates and related parties follow: 2011 Associate Blocktime fees paid by the Parent Company and Studio 23 to Amcara Affiliates: Expenses paid by the Parent Company and subsidiaries to Manila Electric Company (Meralco)..077 523. Transactions with Related Parties In addition to the related party transactions discussed in Notes 4 and 18. The PDRs may be exercised at any time from October 7.467 PDRs and common shares for P996 million.000 ABS-CBN shares.023 10. 22.

Inc.345 339.796 10. 2001.405 5. Management Fees Charged to Sky Cable The Parent Company renders management services to Sky Cable through designated employees.850 306 1. CPI receives license fees from Sky Cable and its cable affiliates computed based on agreed percentage of subscription revenue of Sky Cable and its cable affiliates.230 2. Inc. Inc.677 820.986 2.328 = 2011 Due to: Sky Vision Amcara Bayantel (see Note 4) Others* Total Current portion Noncurrent portion *Various entities within the Lopez group 2010 = P– 5. renewable on a yearly basis upon mutual consent of both parties. Star Cinema First Philippine Holdings. Inc.065 652 P171. Lopez Holdings Knowledge Channel Foundation. Under the terms of the Agreement.990 1. Corporate Information Solutions.706 347.617 = 70.092 1.342 = 17. License Fees Charged by CPI to Sky Cable CPI has an existing cable lease agreement (Agreement) with Sky Cable for the airing of the cable channels (see Note 12) to the franchise areas of Sky Cable and its cable affiliates.319 2010 = P237.238 339.848 3.400 P157.209 2. Said Agreement was renewed for one year in 2009.882 2.111 771 652 = P31.708 = P92. Inc.490 – 111.209 1. Sky Guide. The initial Agreement with Sky Cable is for a period of five years effective January 1. *SGVMC214977* .234 2. presented under “Trade and other receivables” account and payables to related parties. Inc.897 1.766 1.108 727.596 72..129 162.68 The related receivables from related parties. ABS-CBN Holdings Corporation ABS-CBN Bayan Foundation. Goldlink Securities and Investigation Services Rockwell Land Corporation Sky Foundation. Others* P113. CPI develops and produces its own shows and acquires program rights from various foreign and local suppliers.008 5. Inc.713 2.209 3.521 1. are as follows: 2011 Due from: Bayantel ABS-CBN Foundation. b.217 2.686 7.345 P– = a. 2010 and for two years in 2011. presented under “Trade and other payables” account and “Due to a related party” under “Other noncurrent liabilities” account in the consolidated statements of financial position. As the owner of the said cable channels.

613 457. directly to advertisers. 25 and 26) Pension benefits (see Note 29) Vacation leaves and sick leaves Termination benefits P1.619 6.958 10. Other transactions with related parties include cash advances for working capital requirements.764 478.897 32.445 = 2010 = P866.69 c. including airtime sold directly to advertisers.571 1. *SGVMC214977* . 2010 and 2009. Outstanding balances as of year-end are unsecured. Substantially.100 56. For the years ended December 31. and are collectible/payable on demand.164.916 = P22. the Company has not made any provision for doubtful accounts relating to amounts owed by related parties. Compensation of Key Management Personnel of the Company 2011 Compensation (see Notes 24.094.677 = 10. all gross airtime revenue.044.576 = 2009 (As restated see Note 2) = P14.031 = P880. This assessment is undertaken each financial year by examining the financial position of the related party and the market in which the related party operates.577. These spots are sold mainly through advertising agencies which act as the buying agents of advertisers.494 1.461 Industry rules allow ABS-CBN to sell up to 18 minutes of commercial spots per hour of television programming.154. Net Revenues 2010 (As restated see Note 2) = P21.229 818.658 28. d.291. interest-free and settlement occurs in cash.046.276.753 = P27.564 24.209. 2011.739.920 P25.520 521.859.462.941 40.267 23.606 2.613 2009 = P743.465.102 P1.199.590 = 113.128 25. and to a lesser extent.259 25.234.072.028. Terms and Conditions of Transactions with Related Parties The sales to and purchases from related parties are made at normal market prices.452 687..794 = P951. The Parent Company and Studio 23 has an existing blocktime agreement with Amcara for its provincial operations.676 Airtime (see Note 22) Sale of services (see Notes 22 and 30) Sale of goods Less: Agency commissions Incentives and co-producers’ share 2011 P17.948 2.195 40.000.636 53.000 3. Blocktime Fees Paid by the Parent Company and Studio 23 to Amcara The Parent Company and Studio 23 own the program rights being aired in UHF Channel 23 of Amcara. is subject to a standard 15% agency commission.339 10.

set requirements. The revenue earned on these shows is shared between ABS-CBN and the co-producer.976 1. Cost of Sales and Services Cost of services consists of the following: 2010 2011 Facilities related expenses (see Notes 22 and 30) Personnel expenses (see Notes 22 and 29) Programming costs Depreciation and amortization (see Note 10) Amortization of program rights (see Note 12) (Forward) P1.287 250.714 550.908 172.109 476. but not limited to.70 Incentives include early payment and early placement discount as well as commissions paid to the Company’s account executives and cable operators. prizes.903 45.799 146.900.549 856.187 675.508 236.772 = 2.163.205.754 *SGVMC214977* .887 52.169.531 1.238 1.128 985.726 314.097 35.580 2009 (As restated see Note 2) = P1.277 2009 = P2.285 241.126 = P6.868 940.650 1.349 500.914 909.544 476.975 111.130 45. and handles the marketing of the shows.407.183.605 790.512. transportation.227 31.575.785 178. advertising and other expenses related to the promotional activities of various projects during the year. Under this arrangement. The Company has co-produced shows which are programs produced by ABS-CBN together with independent producers.450 (As restated see Note 2) = P1.793 94.367 368. The co-producer shoulders all other costs of production.333 279.775 = 1. 25.298 109.712 931.966 = 2010 = P3..401.138 P9.568 215.522 53.369.286.778 1.769 = P7.531 279.600 481.964 920.099. Production Costs 2011 Personnel expenses and talent fees (see Notes 22 and 29) Facilities related expenses (see Notes 22 and 30) Depreciation and amortization (see Note 10) Amortization of program rights (see Note 12) License and royalty Travel and transportation Set and set requirements Catering and food expenses Stationery and office supplies Advertising and promotions Other program expenses (see Notes 12 and 22) P4.396 888.787 Other program expenses consist of production expenses including.007 113.834. 24.074.865. ABS-CBN provides the technical facilities and airtime.682.

810 2010 = P4.148 116.455 600.139 44.128 420.602 32.516 171.336 34.612 19.462 2009 = P3.986 2.396 2009 = P112..001 149.730 139.331 75.183 24.534 14.041 16.552 6.014 393.163 9.157 21.909 12.947 215.884 11.648 231.287 = 790.325 22. General and Administrative Expenses 2011 Personnel expenses (see Notes 22 and 29) Contracted services Depreciation and amortization (see Notes 10 and 11) Facilities related expenses (see Notes 22 and 30) Taxes and licenses Provision for doubtful accounts (see Note 7) Research and survey Donations and contributions (Forward) P3.825 351.186 (As restated see Note 2) = P274.129 32.955 610.900 14.745 62.726 45.919 82.403 130.894 128.576 292.114 782.345 P274.683 153.556 386.744 11.143 20.324 69.791.711 118.078 143.279 Advertising and promotions Transportation and travel Interconnection costs (see Note 22) Transaction costs Bandwidth costs License fees and royalties Inventory costs Freight and delivery Installation costs Stationery and office supplies Commission and incentives Research and survey Set requirements Catering and food expenses Taxes and licenses Others (see Notes 15 and 22) Cost of sales consists of the following: Printing and reproduction Personnel expenses (see Notes 22 and 29) Inventory costs Facilities related expenses (see Notes 22 and 30) Freight and delivery Advertising and promotions Handling and processing costs Others (see Notes 10 and 22) 2011 P100.778 227.379 104.627.760.712 154.425.907 50.805 29.722 16.843 = 147.339 85.836 42.055 23.370 84.706 373.601 124.126 58.394 139.386 228.924 535.196 *SGVMC214977* .526 = 2010 = P109.919 9.148 20.114 777.033.236 246.471.432 4.399 79.276 93.185 = P287.123 71.468 528.039 63.351 26.571 150.349 668.527 124.506 P6.571 41.324 18.368 28.344 95.472 171.356 118.217 65.855 3.851 = P6.755 515.450 = P6.431 191.623 254.127 26.499 = 2009 (As restated see Note 2) = P245.804 = 69.640 18.395 = P278.71 2010 2011 P304.

395 31.967.561 37.839 17.945 27.789 = P329.812 99.146.075 29.124 = P912.456 = 2010 = P136.810 = – 142.441 P726.408 P7.616 138.224. amusement and recreation Amortization of other intangible assets (see Note 12) Others (see Note 22) Others consist mainly of transportation and travel expenses. 27.600 12..233) 369.72 2011 P130.712 31.871 = 2010 = P915.712 281.365 93. research and survey costs and stationery and office supplies.911 The following are the sources of the Company’s interest expense (see Note 18): Long-term debt Bank loans Obligations under finance lease 2011 P667.693 = P6.195 33.042.045 2009 = P137.322 26.net (see Note 22) P1.753 = P8.963 = P524.665 22.104 52.652 = P852.747 P1.461 = 2010 = P822.461 = 16.712 Other Income (Charges) 2011 Gain on sale of investments (see Note 4) Gain on settlement of a liability (see Note 4) Rental income (see Note 30) Royalty income Impairment loss (see Note 13) Mark-to-market loss on derivative instruments .192.897 332.600 Advertising and promotions Entertainment.812 2009 = P798. Other Income and Expenses Finance Costs Interest expense (see Note 18) Amortization of debt issue costs (see Note 18) Bank service charges 2011 P698.504 = P915.313 – (1.969 11.849 2009 = P852.net (see Note 32) Other income .716 = 2010 = P– 2009 = P– 143.659 = 68. studio tours.853 40.600 P698.091. management fees and other miscellaneous revenue and expense.134 237.537 117.604 Other income mainly consists of income from gate receipts.022 = 13.092 = P1.113 (53.404 – – 481.868) – 200. *SGVMC214977* .113 60.327 57.887 – 118.

260 = P961.544 114.583 = 31.308) 150.652 43.net: Accrued pension obligation and other employee benefits Capitalized interest.168) 168.294) 99.805 30.73 - 28.043 2.173 = 2010 = P374.429 = 2010 = P1.107.055 The components of consolidated net deferred tax assets and liabilities of the Company are as follows: 2011 Deferred tax assets . Income Tax and Registration with the Philippine Economic Zone Authority (PEZA) The provision for (benefit from) income tax follows: Current Deferred 2011 P415.835 166.055 = = P438. duties and taxes (net of accumulated depreciation) Customers’ deposits MCIT Accrued expenses NOLCO Gain on acquisition and exchange of debt (net of accretion) Allowance for doubtful accounts Net unrealized foreign exchange loss Unearned revenue Allowance for inventory obsolescence Allowance for impairment loss on property and equipment Others P361.992 (126.681 *SGVMC214977* .933 50.096 = P442.089 – (74.095) = P1.805 (388.663 1.761) 181.481) = P684.119 = (127.569 135.585 – 4.690) P287.622 850 P438.611 11.495.535) P689.196 (248.391 Deferred tax liabilities: Excess of the fair value over the book value of net assets of Sky Cable Unrealized foreign exchange gain Others P405.976 168.727 368.985 = (239.710 2009 = P825..636 45.536 (141.651 1.463 – (139.

respectively.811 159.979 99. deferred tax liability on undistributed earnings of ABS-CBN Global.821 5.939 – 3. *SGVMC214977* .570.946 18..776 226. 2014 Amount = P17.251 23. MCIT of the subsidiaries amounting to P183 million can be claimed as tax credit against future = RCIT as follows: Year Paid 2009 2010 2011 Expiry Dates December 31.259 40.797 42. 2013 December 31.579.584 28. has not been recognized since the Parent Company is = able to control the reversal of the temporary difference.699 110. The undistributed earnings are earmarked for expansion in the Company’s foreign operations.119 = P182.573 981. NOLCO and MCIT of certain subsidiaries follow: Allowance for doubtful accounts Allowance for decline in value of inventories NOLCO Unearned revenue Accrued retirement expense and others Accretion of interest expense MCIT Allowance for impairment loss on property and equipment 2011 P1. amounting to = P762 million and P505 million.74 The details of the unrecognized deductible temporary differences.140. NOLCO and MCIT will be utilized.725 = 2010 = P1.104 As of December 31.312 Management believes that it is not probable that taxable income will be available against which the temporary differences. 2012 December 31.333.916 – P3.935 686. MCIT and NOLCO amounting to P4 million and P63 million were claimed as = = deduction against RCIT due and taxable income. holding company of the Parent Company’s foreign subsidiaries.984 13. 2011 and 2010.832 = P1. MCIT and NOLCO amounting to P19 million and P68 million expired and were written = = off.589 60. 2012 December 31.499 = P1.751 NOLCO of the subsidiaries amounting to P823 million can be claimed as deductions from future = taxable income as follows: Year Incurred 2009 2010 2011 Expiry Dates December 31. 2013 December 31. respectively.140. In 2011. 2014 Amount = P47.583 = 955.

Total income tax holiday incentives availed by Big Dipper amounted to P204 million and = P268 million in 2011 and 2010. Pension Plan The Company’s pension plans are composed of funded (Parent Company and Sky Cable) and unfunded (other subsidiaries). Eugenio Lopez Drive. except for ABS-CBN International (contributory) covering substantially all of its employees.75 The reconciliation of statutory tax rate to effective tax rates applied to income before income tax is as follows: Statutory tax rates Additions to (reduction in) income taxes resulting from the tax effects of: Gains subject to capital gains tax Interest income subjected to final tax Nondeductible interest expense Others.766 = P351. respectively.504 (63. Quezon City. = 29.525 2009 = P74.887) – = P135.084 (29.899 (16. the PEZA approved the application of Big Dipper for registration as an Ecozone Information Technology (IT) Enterprise to provide digital film archiving.net Effective tax rates 2011 30% (8) (6) 2 (8) 10% 2010 30% – (2) 1 (4) 25% 2009 30% – (4) 2 – 28% Registration with the Philippine Economic Zone Authority (PEZA) On July 14. digital central library.. Jr. content licensing and transmission at the 3rd Floor.927 168.386 = 246.675 (876) P508.978) 48. noncontributory and actuarially computed pension plans.753) (35.919 *SGVMC214977* .236 5. The following tables summarize the components of consolidated net benefit expense recognized in the consolidated statements of income and accrued pension obligation recognized in the consolidated statements of financial position: Net Pension Expense Current service cost Interest cost Expected return on plan assets Net actuarial loss (gain) Past service cost Net pension expense 2011 P278.660 113. mainly income subject to different tax rates and change in tax rates . Eugenio Lopez. Communications Center.488) 23. 2009. The benefits are based on years of service and compensation during the last year of employment.711 = 2010 = P183.

949 (125.854) P889.295.788 = 63.783) = 2010 = P610.123) 1.468.308 = 2010 = P2.021.504 1.0 The overall expected rate of return on assets is determined based on the market prices prevailing on that date. applicable to the period over which the obligation is to be settled.365 = (1.317.389 (1.788) 1.445 The Parent Company and Sky Cable expect to contribute nil and P71 million.764. *SGVMC214977* .762.0 Investment in fixed/floating rate treasury note Investment in government securities and bonds Investment in stocks Others 34.0 49.899) 3.280 183.5 12.386 246.5 100.466 6.295. respectively.978 78.039 (3.365 = 2010 = P1.260 P4.788 = P157.894 (142.389 = 278.927 168.76 Accrued Pension Obligation Present value of obligation Fair value of plan assets Unfunded obligation Unrecognized amortizations past service cost Unrecognized net actuarial loss Accrued pension obligation 2011 P4.295.317.761) P1.764.295.0 5.0 5.875) (3.1 50.832 (852.601 8.151.899 = (P78.488 527.066) = P2.957 = P1.389 Changes in the fair value of plan assets of the Parent Company and Sky Cable are as follows: Fair value of plan assets at beginning of year Expected return on plan assets Actual contribution Actuarial (losses) gains Fair value of plan assets at end of year Actual return on plan assets \ 2011 P1.084 657.5 100.528 29.4 10.764.815 127.. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: 2011 (Percentage) 2010 33.406 Consolidated changes in the present value of the defined benefit obligation are as follows: Defined benefit obligation at beginning of year Current service cost Interest cost Actuarial loss on obligation Benefits paid Past service cost Defined benefit obligation at end of year 2011 P2.138. to the = retirement fund in 2012.027) = P625.295.696 (2.

752) 491. the BOD approved the re-establishment of the retirement committee who will actively manage the pension fund.9 5.761) 2010 (P2. 2011 and = 2010.655) (10) 1. As = of December 31. the Company contributed 7. the retirement fund acquired 32. b. 2011 is 10. In 2010. Allow the acquisition of Lopez shares and shares of other listed companies. = = In 2010. Appoint an investment officer of the retirement plan. and d. The contribution was made in open market at a price of P53.706) 2007 (P860. = *SGVMC214977* .2 The discount rate prevailing as of December 31. the value of each share is at P5. respectively.151. 2010.425 (212.764.70 and P45.601) (78.. 2010. Amounts for the current and previous four years are as follows: Defined benefit obligation Fair value of plan assets Deficit Experience adjustments on defined benefit obligation Experience adjustments on plan assets 2011 (P4. the value of each PDR is at P29.50 each. 2011 and 2010.5%.496) 127.0 5. c.203) (15.762.295. Migrate to an investment management account arrangement in lieu of a “Trusteed” arrangement with BDO.466) 25.0 2010 (Percentage) 2009 11.8 5.899 (3.392 On March 11.788 (1.389) = 1.2 million shares of Lopez Holdings for P129 million. 2011.0 7.280) = 610.0 9.400.365) = 1.317.77 The principal assumptions used as of January 1.528 (1.370 2008 (P569. Acquisition of ABS-CBN securities to fully fund the retirement fund deficiency. the retirement committee of the retirement fund.113) = 264.295.957 2009 (P1.468.458 (595.0 7.31 or a total of = = = P164 million and P171 million.50.103 (142.10 and P5.414) = 356.000 ABS-CBN PDRs to the retirement fund. approved the following: a. 2010 and 2009 in determining pension benefit obligations for the Company’s plans are shown below: 2011 Discount rate Expected rate of return on plan assets Future salary rate increases 8.849 67. On July 27.989) (223. As of December 31. respectively (see Note 21).0 5.021.

respectively. including the substitution or withdrawal of any scheduled programs.202 = 2010 = P116.771 240.521. These non-cancelable leases have remaining non-cancelable lease terms of 3 to 5 years.934 = P357.855 = 247. provided that the Parent Company agrees that the programs will consist substantially the same content and genre provided for in the Memorandum. The Memorandum also provides that subscription revenues. Commitments Deal Memorandum with DirecTV On June 1.347 P489.78 - 30.874 = P1. internet protocol technology and satellite master antenna television system or similar system.192. Future minimum rental payable under non-cancelable operating leases are as follows: Within one year After one year but not more than five years 2011 P410. all rights. space and satellite equipment. As provided in the Memorandum.149 1.158. Future minimum rental receivable under non-cancelable operating leases are as follows: Within one year After one year but not more than five years 2011 P241. ABS-CBN International’s share in the subscription revenue earned from subscribers that have migrated to DirecTV amounted to P671 million. All costs under any mutually agreed marketing plans shall be shared equally between DirecTV and ABS-CBN International.705 *SGVMC214977* . exhibit. computed as the current and stand alone retail price per month for a subscription to The Filipino Channel multiplied by the average number of subscribers. 2010 and = = = 2009.. perform and distribute certain programs of the Parent Company that are listed in the Memorandum. 2005. All programming decisions with respect to the programs shall be in the Parent Company’s commercially reasonable discretion.569.023 As Lessor. the Parent Company and ABS-CBN International entered in to a 25-year Deal Memorandum (Memorandum) with DirecTV in which the Parent Company granted DirecTV the exclusive right via satellite. The Parent Company has entered into commercial property leases on its building. Operating Lease As Lessee. ABS-CBN International may engage in any marketing plan mutually agreed by both parties. The Parent Company and subsidiaries lease office facilities. P765 million and P830 million in 2011.769 = 1. All leases include a clause to enable upward revision of the rental charge on a predetermined rate. to display. consisting of the Parent Company’s surplus office buildings. discrete programs or channels not granted to DirecTV are expressly reserved by the Parent Company. shall be divided equally between DirecTV and ABS-CBN International.596 P1.365 = 2010 = P328. title and interest in and to the content.

. The estimated fees include channel license fees contracted by Sky Cable for its subsidiaries. for which Sky Cable will be reimbursed.886 P24.933 = P34. Estimated fees for the next four years are as follows: Year 2012 2013 2014-2015 Amount* = P455. *SGVMC214977* . and has been throughout the year under review. The main purpose of these financial instruments is to raise funds for the Company’s operations. Cash Flow Interest Rate Risk The Company’s exposure to the risk for changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates. the Company’s policy that no trading in financial instruments shall be undertaken.79 Obligations under Finance Lease The Company has finance leases over various items of equipment. 2011. foreign currency risk. The BOD reviews and agrees on the policies for managing each of these risks and they are summarized below.778 108. Financial Risk Management Objectives and Policies The Company’s principal financial instruments comprise cash and cash equivalents.380 43.160 68. AFS investments and interest-bearing loans and borrowings.278 Purchase Commitments Sky Cable has commitments with various program suppliers for a period of 1 to 5 years.327 118.989 10.270 73.540 5. The main risks arising from the Company’s financial instruments are cash flow interest rate risk. Channel license fees are based on fixed and variable rates. credit risk and liquidity risk. It is.912 28. which arise directly from its operations. Future minimum lease payments under finance leases and hire purchase contracts together with the present value of the net minimum lease payments are as follows: Within one year After one year but not more than five years Total minimum lease payments Less amounts representing finance charges Present value of minimum lease payments Less current portion 2011 P48. amounting to P131. The Company has various other financial assets and liabilities such as trade receivables and trade payables.270 = 25.211 73.494 = 2010 = P81.4 million.186 *Includes variable fees based on the number of active subscribers as of December 31.064 268.662 37. = 31.

550 = P44.010 (P4. the Company’s loan with fixed rate of interest is at about 56% and 57% of the total loans at the end of 2011 and 2010.041 P1. however.723) = (40.80 To manage this mix in a cost-efficient manner.833 = 167. The following table sets out the carrying amount.006.530 36. Based on these experiences. Looking at past trends. by maturity.230.339.332 = P4. Effect on Income Before Income Tax 2010 2011 Parent Company: Increase by 2% Decrease by 2% PCC: Increase by 1% Decrease by 1% (P101.530 134.183) = P5.209 P162. 2011.733.030 642.985 (P69.395 = P104.987 125.252) P6. the Company provides the following table to demonstrate the sensitivity of the Company’s income before income tax (through the impact on floating rate borrowings) to a reasonably possible change in interest rates.860 = P144. As of December 31.350 3.757) = 69. respectively.754 = 5. Before the prepayment of all outstanding loan obligations under Tranche A of the SCA facility and after taking into account the effect of interest rate swaps. 2011 and 2010. As of December 31. 3-month PDST-F.654.498 *SGVMC214977* .236 (P200.757 (P2.185 P63.345 = 51. with all other variables held constant. of the Company’s consolidated financial instruments that are exposed to interest rate risk: Two to Within One to Two One Year Years Three Years 2011 Interest-bearings loans and borrowings: Fixed rate Floating rate 2010 Interest-bearings loans and borrowings: Fixed rate Floating rate Three to Four Years Four to Five Years More than Five Years Transaction Costs and Discount Total P122..315. benchmark interest rates.498) = 2.977 Interest on financial instruments classified as floating rate is repriced at intervals of three months.640.530 = P987. The other financial instruments of the Company that are not included in the above tables are noninterest-bearing and are therefore not subject to interest rate risk.801 P63.493 (P254. approximately 43% of the Company’s borrowings are at a fixed rate of interest.165 = 51.221) = (46.127 = P45.857. Without the existence of any swaps.010) = 101. There is no impact on the Company’s equity other than those already affecting the net income.000 = 4.530 131.985) = 4. increased by 34 basis points since the end of 2010. it is the Company’s policy to enter into interest rate swaps whenever the need arises.453 = 137. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument.736 4.681 = 553.302.907 P5. there are no freestanding derivative contracts. this has not always been the case with several periods showing some downward adjustments due to several market pressures.

*SGVMC214977* . Before the prepayment of all outstanding dollar loan obligations under Tranche A of the SCA facility. 2011 and 2010. approximately 26% of the Company’s borrowings are denominated in currencies other than the functional currency of the operating unit. As of December 31. the Company has transactional currency exposures. Such exposure arises when the transaction is denominated in currencies other than the functional currency of the operating unit or the counterparty. Other than the debt obligations.81 Foreign Currency Risk The Company’s primary exposure to the risk in changes in foreign currency relates to the Company’s long-term debt obligation. It is the Company’s policy to enter into cross currency swaps whenever the need arises to manage foreign currency risk and eliminate the variability of cash flows due to changes in the fair value of the foreign-currency denominated debt with maturity of more than one year. These were all covered by cross currency swaps which have all been terminated as a result of the prepayment of the underlying loan obligation.. there are no freestanding derivative contracts and all the Company’s long-term loan obligations are generally in Philippine currency.

424 47.820 263.368 65.208 – 312.088 87.624 308 (221.569 954.041 Taiwan Dollar (TWD) – 841 841 317 – 317 524 Israeli New Shekel Peso (ILS) Equivalent – 4.150) USD Financial assets: Cash and cash equivalents Trade and other receivables Financial liabilities: Trade and other payables Obligations for program rights Net foreign currency-denominated financial assets (liabilities) 39.947 453.452 99.873 CAD 982 2.815 302.219) EUR 3.792 19.059 44.345 33.848 56.909 223 18.736 272.401.510 3.261 223 18.437.687 8.216 8.672 – 65.838 252.672 11.170 123.673 (93.232 5.078 308 22.044) 11 116 127 81 – 81 46 Norway Kroner (NOK) – 72 72 51 – 51 21 Denmark Kroner (DKK) 47 51 98 – – – 98 Sweden Kroner (SEK) 75 131 206 134 – 134 72 Saudi Arabia Riyal (SAR) 3.267 – 20.681 *SGVMC214977* .223 20.104 5.253 – – – 2.320 7.219 – 4.538.729 4.361 4.787 2.967 Taiwan Dollar (TWD) Peso Equivalent – 2.396 308 18.023 4.340) GBP 120 3.672 2.939.131 JPY 6.523 172.280.184.185 6.848.580 4.688 150.123 CAD 1.836 795 – 795 172.82 The following tables show the Company’s significant foreign currency-denominated financial assets and liabilities and their Philippine peso equivalents as of December 31.463 – 16.696 AUD 11 5.898 212.156.947 – 263.104 (19) 8.835 (966) 2010 Original Currency United Arab Emirates Dirham Swiss Franc AUD (AED) (CHF) 189 2. 2011 and 2010: 2011 Original Currency United Arab Emirates Swiss Norway Dirham Kroner Franc (AED) (CHF) (NOK) 11.636 95.386 41.792 17.673 – 150.160.687 – 39.313 138.671 – 297.878 7.200 11.309 68.869 4.496 2.085 25.463 109.253 USD Financial assets: Cash and cash equivalents Trade and other receivables Financial liabilities: Trade and other payables Obligations for program rights Net foreign currency-denominated financial assets (liabilities) 18.976 98 – 98 2.430 16.989 717.810 39.260 126.151 370.219 (490) GBP 24.428 283.444 (2.900 4.835 – 4.207 Denmark Kroner (DKK) 287 23 310 – – – 310 Sweden Kroner (SEK) 138 241 379 170 – 170 209 Saudi Arabia Riyal (SAR) 34.474 – 22.416 – 23.267 (9.770 278.653 19 87.985) 119 629 748 179 – 179 569 757 1.444 – 5..482.840 44.955 (26.122 3.471 (68.871 9.243 36 – 36 5.228) EUR 23.749 3.831 691.416 JPY 25.219 2.243 363.

3%) 2.153 (2.93 46.2% (3.8% 127 (7.971) 0.1% (6.3%) (9.29 7.6% (6. 2011 Increase (Decrease) in P to Foreign = Effect on Currency Income Before Exchange Rate Income Tax 2.7% 196 (1.249 13.79 6.7%) 9.7%) 8.243 32.50 12.79 0.8% (6.5% (4.764 (1.7% 81 (3.96 67.2%) 125.2%) 4.43 7.84 58.308 (1.0%) 3.1%) (23) 10.9%) 6.9%) (46) 14.83 In translating the foreign currency-denominated monetary assets and liabilities into Philippine peso amounts.2% (5.941) 5.247) 8.789 (7.39 7.8%) – – USD EUR JPY CAD GBP AUD AED CHF NOK DKK SEK SAR TWD ILS Effect on Income Before Income Tax (P30.850) 2.481 2.29 The following tables demonstrate the sensitivity of the Company’s income before income tax to a reasonably possible change in foreign exchange rates.241) 215 (466) – – *SGVMC214977* .56 42.7% (2.84 56.9%) (360) 5.3%) 2.9%) 1.710 (77.540 11.7% (5.3% 106.4%) (156) 2010 Increase (Decrease) in P to Foreign = Currency Exchange Rate 2. the Company used the following exchange rates: Currency USD EUR JPY CAD GBP AUD AED CHF NOK DKK SEK SAR TWD ILS 2011 43.45 11.8%) (24) 5.6% (6.147) (2.160 (3.232) (526) 4.6% (4.6%) 40.3% (3. There is no impact on the Company’s equity other than those already affecting the net income.65 6.36 11.265 (1.95 46.78 67.55 44.732 (0.4%) 494 5.4% 367 (4.53 11.68 1.7%) (74.7% (7.42 11.5% (1.9% (0.0% 3.54 43.5%) (95) 5.501) 10.580 28 (64) 12 (9) 70 (28) 40 (32) 87.6% 165.7% 419 (1.285) (7.383) 1.45 11.70 1.1%) 3.457 (1.923 (12.256 (4.51 2010 43.661) (3.0%) 0.60 7.9% 10.0%) 7.8% 2.0%) (14.7% 13.17 0.4% (5.2% (P65. with all other variables held constant.7%) 6..53 44.3%) (213) 17.499) = (4.5%) (394) 13.414) = 48.

as a general rule. Credit Risk The Company is exposed to credit risk from operational and certain of its financing activities.754 = 7. without considering the effects of collateral. The table below shows the gross maximum exposure to on. the Company only extends credit with recognized and accredited third parties.476 265.758. The maximum exposure to credit risk is partly represented by the carrying amounts of the financial assets that are reported in the consolidated statements of financial position. With regard to the Company’s financing activities.340 *SGVMC214977* . There is no requirement for collateral over trade receivables since the Company trades only with recognized and accredited counterparties.892 P15.572.807 5..286 102.327 264. The Company implements a pay before broadcast policy to new customers.84 The change in currency rate is based on the Company’s best estimate of expected change considering historical trends and experiences.066 = P12. With respect to credit risk arising from the financial assets of the Company.961. On the Company’s credit risk arising from operating activities. Positive change in currency rate reflects a weaker peso against foreign currency. receivable balances are monitored on an ongoing basis. Such determination takes into consideration the age of the receivable and the current solvency of the individual accounts.net (excluding advances to suppliers) Deposits AFS investments P8.024. The Company computes for the percentages of changes in exchange rates for the foreign currency-denominated accounts by comparing the year-end closing rates or existing foreign currency exchange rates with the forward foreign currency exchange rates three months before and after financial reporting date. In addition.964. exposure to credit risk arises from default of the counterparty.259 = 2010 = P5.991 111.097. The Company assumes the trend for the six months period to be its exposure on foreign currency fluctuations. credit enhancements and other credit risk mitigation techniques as of December 31: 2011 Loans and receivables: Cash and cash equivalents (excluding cash on hand) Trade and other receivables . The policy of the Company is to have the BOD accredit these banks and/or financial institutions before any of these financing activities take place. Credit Risk Exposures. the Company transacts these activities with counterparties that have a long credit history in the market and outstanding relationship with the Company.and offbalance sheet credit risk exposures of the Company.

The credit quality of financial assets is being managed by the Company using internal credit ratings.468.670 55.85 Credit Quality per Class of Financial Asset. as of financial reporting date. this covers.319 111.476.049.089 37.068 87.937 2.870 1.969 33.177 635.485 171.149 522.951.524 32.528 64.725.236.893 31.476 265.228 2.806.951.856 – – – P104. The following tables below shows the credit quality by class of financial assets based on the Company’s credit rating system as of December 31.373 317.889 264.806 = 5.476 265.064 – – – = P880. accounts of good paying customers.140 270.086.319 – – = P3.948 5. with good credit standing and with no history of account treatment for a defined period.483 31. 2011 and 2010: 2011 Neither Past Due nor Impaired Past Due but High Moderate Low not Impaired Loans and receivables: Cash and cash equivalents: Cash in banks Cash equivalents Trade receivables: Airtime Subscriptions Others Nontrade receivables Due from related parties Deposits AFS investments Impaired Total P3.703 98.030 425.943 – – – = P107.541 = P– – 683.461 768.776.870 4.865 81.974 29.863.945 624..291.468.892 P16.923 = P2.327 1.188 = Neither Past Due nor Impaired Moderate High Loans and receivables: Cash and cash equivalents: Cash in banks Cash equivalents Trade receivables: Airtime Subscriptions Others Nontrade receivables Due from related parties Deposits AFS investments 2010 Past Due but Low not Impaired Impaired Total = P2.483 689.638 58.066 = P12.633.260 = P– = – 1.327 264. This also includes claims from Elite subscribers. advance payers.677 891 – 35.685 185.189 – – – P1.901 266.388 246.877 = P– = – 11.798.103.995 372. *SGVMC214977* .892 P11.661 77.948 2.293 163.538 52.806 = 5.608 – 66.330 1.182.014.137 167.938.941 – 111.122 = P– = – 789.190 The credit quality of the financial assets was determined as follows: § High Credit Quality This includes deposits or placements to counterparties with good credit rating or bank standing.010 = P– – 7.275 65.305 3.682 882.436 32. related parties with offsetting arrangement and existing employees.746 = P– – 390.328 102.591.037.066 = P7.103.328 – – P2. airtime and channel lease with advance payment arrangements. For receivables.937 2.248 1.044 = P– = – 618.902 38.885 = P3.806.029 171.970 = P– – 1.438 – P727.642 – – – = P461.

that are reasonably expected to be realized in cash.121.667.306 117. subscription. A financial asset is past due when a counterparty has failed to make a payment when contractually due.661 = 252.328 P1. or (2) direct sale of publications to subscribers.720 1. This also includes claims from Superior subscribers.871 517. and new customers for which sufficient credit history has not been established.821) (61. this covers accounts of standard paying customers. airtime and channel lease and related parties without offsetting arrangement. services and goods in the ordinary course of business.760 23.865 81.103 171. 2011 and 2010. advertisers or trade customers arising from the sale of airtime. Trade Receivables These represent amounts collectible from advertising agencies.928 = 343.024.528) (23. this covers accounts of slow paying customers and those whose payments are received upon demand at financial reporting date.355 – P3.293 163.377 144.086. § Low Credit Quality For receivables. arising from sources other than the sale of airtime. Others.158.328 460.782 = P470.334 = 119. subscriptions.208 = P1. The following tables below show the aging analysis of past due but not impaired receivables per class that the Company held as of December 31.286 = *SGVMC214977* .382 – P1.929) = Total P4.885 = Allowance (P525.018 = 709.86 § Moderate Credit Quality For receivables. This account refers to revenue generated from regular subscriber’s fees for either: (1) access to programs aired through DTH and cable television systems.340 = Impaired P789. This account refers to other revenue generated from the sale of goods and services.381. 2011 Neither Past Past Due but not Impaired Due nor 30 Days Impaired Less than 30 and Over Trade receivables: Airtime Subscriptions Others Nontrade receivables Due from related parties P2.524.892 171. those whose payments are within the credit term. This account refers to revenue generated from the sale of time or time block within the on-air broadcast hours on television and radio.443) = (58. This also includes claims from Special subscribers.189 – P1.556. services and/or goods in the ordinary course of business..328 P7.668. Subscriptions.147 273.778 383.538 = 52.137) – (P668. Nontrade Receivables These represent claims. Airtime.

243 10.377 = P792.383 = P800.000 207.849 – – P8.183 246.659.730.745.246) = (54. *SGVMC214977* .000 – – 207. the Company regularly evaluates its projected and actual cash flows.892 171. covers only a short period of time.629 1.311.000 million fund raising activities with final maturity of up to = 2017.759 365. the Company continuously assesses conditions in the financial markets for opportunities to pursue fund raising activities.720 1.670 55.5 to 6 years.328 460.533.708 = 985.053 = 4.138.869 31.138. the Company places funds in the money market only when there are surpluses from the Company’s requirements. As such. It is the Company’s objective to maintain a balance between continuity of funding and flexibility through the use of bank credit and investment facilities.243 P10.517 471.436 827. accrued taxes and other payables to government agencies.614) – (P627.697 250.664 100.427 = P926.053 = 4.428 152.400 – = P1.659.632 Impaired = P683. The tables below summarize the maturity profile of the Company’s financial assets and liabilities based on contractual undiscounted payments.961. the Company closed a P10.597 P– = 97. Currently. As part of its liquidity risk management. Also.689.158.193.493 31.319 = P5.064 – = P880.526 – = P2.271) (59.87 2010 Past Due but not Impaired Neither Past Due nor 30 Days Impaired Less than 30 and Over Trade receivables: Airtime Subscriptions Others Nontrade receivables Due from related parties = P1. Within One Year Cash and cash equivalents Trade receivables: Airtime Subscription Others Nontrade receivables Due from related parties P8.808 P– = – P– = – P– = – P7.991 Based on the cash flow projection.158.339 = Trade and other payables* Obligations for program rights Interest-bearing loans and borrowings Convertible note Customers’ deposits P7. The Company did not carry out any fund or capital raising activity in 2011.328 460.745.071.319 = P2.635.018 709.601 94.719) (22. the debt maturity profile of the Company ranges from 2.757 = 704. past due receivables are expected to be collected within 2011.757 = 606.524.339 = One to Two Years P– = – – – – – P– = Two to Three Years P– = – – – – – P– = 2011 Three to Four Years P– = – – – – – P– = More than Four Years P– = – – – – – P– = Total P8.218 – – – – 250.661 77.417 119. In 2010.819 589.328 P15.850) = Total = P3.164.923 Allowance (P491.635.232.018 709.405 14.909 = P1.528 64.484 147. This undertaking specifically considers the maturity of both the financial investments and financial assets and projected operational disbursements.328 P15. cash balance should be equal to P2 billion at any given time to compensate for 2 months of operational = exigencies amidst occasional fluctuation of cash inflows. Placements are strictly made based on cash planning assumptions and as much as possible.849 P23.953.073 828.067 202.783.437 = P1.608 991.534 800.892 171.720 1. As a general rule.524. Liquidity Risk The Company seeks to manage its funds through cash planning on a weekly basis..218 = = *Excluding deferred revenue.892.

741 9.783.075 – – = P9.745. Capital Management The Company’s capital structure pertains to the mix of long-term sources of funds.759 365.278 703.98 7. and that capital can come from debt or equity.04 Less than or equal to 2.400 261.421.370 = P– 20.821.123 922.86 4.993 *Excluding deferred revenue.319 = P11.001.970 704.319 = P11.666 646.869 31.61 5.861 592.397 – 92.540.436 827.745.83 7.783.10 1.069 = P– 35. Syndicated Loan Facility.231 92.568 = P654.87 2nd Quarter 1.00 – 1. depreciation and amortization Debt service coverage ratio SCA Facility.816 = P7.325 One to Two Years = P– – – – – – = P– Two to Three Years = P– – – – – – = P– More than Four Years = P– – – – – – = P– Total = P5.821. The Company’s approach focuses on efficiently allocating internally generated cash for operational requirements and investments to grow the existing business as well as to deliver on its commitment of a regular dividend payout at a maximum of 50% of the previous year’s net income. Combined Facility Agreements Debt to earnings before income tax.48 – *SGVMC214977* .00 Greater than or equal to 1.32 1..869 31.278 607.951.334 3.018. BDO Facility.109 – = P8.68 15.93 3.334 3.00 – 1.325 Trade and other payables* Obligations for program rights Interest-bearing loans and borrowings Due to a related party Customers’ deposits = P7. all financial ratios are within the required limits all throughout 2011 and 2010 as follows: 2011 Financial Ratios Loan Agreement Debt to equity Debt to earnings before income tax.07 4.421.88 2010 Three to Four Years = P– – – – – – = P– Within One Year Cash and cash equivalents Trade receivables: Airtime Subscription Others Nontrade receivables Due from related parties = P5.870 = P– 31.608 991. accrued taxes and other payables to government agencies. it needs capital.400 – – – – 261. When the Company expands.02 11.439 = P1.793 = P– 8. The primary objective of the Company’s capital management is to ensure that it maintains healthy capital ratios and strong credit ratings while viably supporting its business to maximize shareholder value.045 = P705. Shortages if any and acquisitions or investments in new business are funded by the incurrence of additional debt largely capped by existing loan covenants on financial ratios.705.674. As evidenced by the quarterly financial certificates that the Company issued to its lenders.759 365.843 12.51 3rd Quarter 1.20 1.70 4th Quarter 1.10 1st Quarter 1.25 Greater than or equal to 1.50 Less than or equal to 2. depreciation and amortization Earnings before income tax to financing cost Debt service coverage ratio Required Less than or equal to 2.20 2.25 Greater than or equal to 3.436 827.88 – 2.15 1.608 991.109 = P21.

10 1st Quarter – – – 2nd Quarter – – – 3rd Quarter 1.85 2.49 32.066 = P12. BDO Facility.476 265. depreciation and amortization Earnings before income tax to financing cost Debt service coverage ratio Required Less than or equal to 2. Financial Assets and Liabilities The following tables set forth the carrying amounts and estimated fair values of consolidated financial assets and liabilities recognized as of December 31.334 5. 2011 and 2010.64 2.50 Less than or equal to 2.25 1.024.635.307 264.867 110.211 265.18 1.00 Greater than or equal to 1.024.03 9. depreciation and amortization Debt service coverage ratio SCA Facility.10 1.018.159.821.05 5.026.04 7.053 = 7.47 – 1.55 2010 0.5 times 2011 0.88 – The following table shows the financial ratios that Sky Cable is required to maintain in accordance with the DRA: Financial ratios Total liabilities to equity Debt service coverage ratio Required Maintain at all times not exceeding 2:1 Maintain at least 1.991 102.11 17.89 2010 Financial Ratios Loan Agreement Debt to equity Debt to earnings before income tax.892 P16.991 Fair Value P8.821.18 1.18 1.25 Greater than or equal to 3.286 Fair Value = P5.13 5.961.602 *SGVMC214977* . Syndicated Loan Facility.25 Greater than or equal to 1.26 4th Quarter 1. Combined Facility Agreements Debt to earnings before income tax.053 = 7.538 = 111.635.286 2010 Carrying Amount = P5.39 Less than or equal to 2.. 2011 Carrying Amount Financial Assets Loans and receivables: Cash and cash equivalents Trade and other receivables net (excluding advances to suppliers) Deposits (included under “Other noncurrent assets” account in the consolidated statements of financial position) AFS investments P8.74 7.334 5.04 7.327 264. 2011 and 2010.558 = 94.158.961.066 = P12.20 7. There are no material unrecognized financial assets and liabilities as of December 31.892 P16.

479 *Excluding deferred revenue.511.757 = 12.357 714.389 207.109 = P18.849 P20.e.405 – 211.825.904.656 = P18. Fair value was computed based on the following: Fair Value Assumptions Estimated fair value is based on the discounted value of future cash flows using the applicable risk-free rates for similar types of loans adjusted for credit risk.881 704. Due to the short-term nature of transactions.121. Trade and Other Receivables and Trade and Other Payables.642.138. the fair values of these instruments approximate the carrying amounts as of financial reporting date..278 9.281 = P7.4%. The interest rates used to discount the future cash flows have ranged from 1. net of any impairment.935 = = P7. Deposits.138. AFS Investments. Investments in unquoted equity securities for which no reliable basis for fair value measurement is available are carried at cost. accrued taxes and other payables to government agencies.400 P20. Interest-bearing Loans and Borrowings.688 – 239.421.90 2011 Carrying Amount Financial Liabilities Other financial liabilities at amortized cost: Trade and other payables* Interest-bearing loans and borrowings Obligations for program rights Due to a related party (included as part of “Other noncurrent liabilities”) Convertible note Customers’ deposits (included as part of “Other noncurrent liabilities”) 2010 Carrying Amount Fair Value Fair Value P7.400 – 261. *SGVMC214977* .269.713 703.774.843 92.879 700.670 83.421. Estimated fair value is based on the discounted value of future cash flows using the applicable risk-free rates for similar types of loans adjusted for credit risk.569. 3 months) based on market conditions.211 256.757 = 12. Fair value of these instruments is computed by discounting future cash flows using the risk-free interest rates for similar type of instruments adjusted for credit risk. Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value: Cash and Cash Equivalents.0% to 5.518 – 224. The fair values of publicly-traded instruments were determined by reference to market bid quotes as of financial reporting date.278 9. Term loans Other variable rate loans Obligations for Program Rights..343 = P7. The face value approximates fair value because of recent and frequent repricing (i.

Sky Cable bifurcated embedded derivatives from its various nonfinancial contracts.5% in 2011 and 1. The fair values were calculated by discounting the expected future cash flows at prevailing PDST-F rate plus applicable credit spread ranging from 2. These are denominated in USD which is not the functional currency of Sky Cable or its counterparty. the Company’s AFS financial assets amounting P126 million = and P117 million (see Note 13). are measured at fair value under Level 1 of the fair = value hierarchy. Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable. Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. Also. 2008 amounted to P 16 million. As of December 31. the Company has no financial instruments carried at fair value which is based on Levels 2 and 3. Convertible Note.7 million. 2011 and 2010. either directly or indirectly. there were no transfers between levels in the fair value hierarchy.990) = P– Fair Value Hierarchy The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities. 2009 are as follows: Balance at beginning of year Net changes in fair value of derivatives Not designated as accounting hedges Less fair value of settled instruments Balance at end of year = P16.91 Due to a Related Party. *SGVMC214977* . 2011 and 2010.3% to 8. 2011 and 2010.5% in 2010. There are no other financial assets and liabilities recognized at fair value. As of December 31. The fair value of the embedded derivative assets as of December 31. Customers’ Deposits. Derivative Instruments Embedded Derivatives. 2008 amounted to $0.1% to 6. The total notional amount as of December 31. respectively. = The net movements in fair value changes of the Company’s derivative instruments as of December 31. as of December 31.223 (1.233) 14. Fair value was computed based on the discounted value of future cash flows using the PDST-R2 rate plus 1% credit spread as of December 31. 2011..990 (14. The fair value of the Company’s payable to Bayantel was calculated by discounting future cash flows using the applicable risk-free rates for similar types of loans adjusted for credit risk.

336 – = P410. EPS Computations Basic EPS amounts are calculated by dividing the net income for the period attributable to common shareholders by the weighted average number of common shares outstanding during the period. (RPN) from 1972 to 1979.397 754. 34.273 – = P345. In 1972.333 754.239. and Maharlika Broadcasting System (MBS) from 1980 to 1986.072 = 2010 = P3. Other Matters a. In the succeeding years.083.000) – 754.886 45. The following table presents information necessary to calculate EPS: 2011 (a) Net income attributable to equity holders of the Parent Company (b) Weighted average of shares outstanding: At beginning of year Acquisitions of PDRs (see Note 21) Issuances of PDRs (see Note 21) At end of year Basic/diluted EPS (a/b) P2.203 = 20. *SGVMC214977* .563.239. Note to Consolidated Statements of Cash Flows 2011 Noncash investing and financing activities: Acquisitions of program rights on account Acquisitions of property and equipment under finance lease Acquisition of noncontrolling interests 2010 2009 P391. therefore basic EPS is the same as diluted EPS.631 2009 = P1.683 765.759.759.178. A substantial portion of these property and equipment was also used from 1986 to 1992 without compensation to the Parent Company by People’s Television 4.247 P3. the Parent Company discontinued its operations when the government took possession of its property and equipment.420. In 1986.716) 30.200 35. the property and equipment were used without compensation to the Parent Company by Radio Philippines Network.390.92 - 33.225 The Company has no dilutive potential common shares outstanding.181.247 = P4.563 (2.247 (224.530 (13.207 = 765. Inc. another government entity.211 767. the Parent Company resumed commercial operations and was granted temporary permits by the government to operate several television and radio stations.877 37..535.702.530 = P2.031 277.616) 3.

As of March 2. While the funeral and medical expenses have all been shouldered by the Company. there still exist claims for compensation for the deaths and injuries. before the Sandiganbayan to press collection of the unpaid rentals for the use of its facilities from September 1972 to February 1986 totaling P305 million plus legal interest compounded = quarterly and exemplary damages of P100 million. As of March 2. Management is nevertheless of the opinion that should there be any adverse judgment based on these claims. al. which resulted in the death of 71 people and injury to about 200 others led the Company to shoulder the burial expenses of the dead and medical expenses of the injured. said expenses do not constitute a material financial obligation of the Company. 2006. In 2003. The Company has contingent liabilities with respect to claims and lawsuits filed by third parties. this will not materially affect the Company’s financial position and performance. MBS. On April 28. c. Given the income flows and net asset base of the Company. The compromise agreement includes payment to the Parent Company of P30 million (net of the government’s counterclaim against the = Parent Company of P68 million) by way of TCCs or other forms of noncash settlement as full = and final settlement of the rentals from 1986 to 1992. as the Company remains in sound financial position to meet its obligations. 1988 against Ferdinand E. the amount of which have not been declared and cannot be determined with certainty at this time. the Parent Company and the government entered into a compromise settlement of rental claims from 1986 to 1992. 1995. which did not result in any direct or contingent financial obligation that is material to the Company. Marcos and his family. additional scrip dividends of P13 million were recognized for the = said stockholders. together with Chronicle Broadcasting System. a competitor television broadcasting company (complainant) filed a case before the NTC for unlawful merger and unlawful cross-ownership and common control and operations of telecommunications companies and cable companies with a prayer for cease and desist order. The Company has settled all of the funeral and medical expenses of the victims of the tragedy. It is the opinion of Sky Vision’s legal counsels that the case filed by the complainant is without legal basis and would not have a material impact to the consolidated financial statements. whatever amount that may be recovered from the foregoing pending claims and the rentals subsequently settled in 1995. 2012. 1991 to declare as scrip dividends. et. The scrip dividends were declared on March 29. the hearing of this case is ongoing before the NTC. b. the claims in connection with the events of February 4. 2012. 2006 are still pending and remain contingent liabilities. The TCCs were issued in 1998. RPN. In relation to the consolidation of Sky Cable and Home Cable in 2004.93 The Parent Company. The events that transpired last February 4. = The BOD resolved on June 27. 2000. filed a civil case on January 14. *SGVMC214977* . in favor of all stockholders of record as of that date..

ABS-CBN CORPORATION AND SUBSIDIARIES INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES DECEMBER 31. V. 2011 I. Schedule D. Schedule H.Other Assets Long-Term Debt Indebtedness to Related Parties (Long-Term Loans from Related Companies) Guarantees of Securities of Other Issuers Capital Stock II. Schedule C. Officers. IV. Schedule E. Employees. III. Supplementary Schedules required by Annex 68-E Schedule A. Schedule F. Schedule G. Financial Assets Amounts Receivable from Directors. Related Parties and Principal Stockholders (Other than Related Parties) Amounts Receivable/Payable from/to Related Parties which are Eliminated during the Consolidation of Financial Statements Intangible Assets . Schedule B. Reconciliation of Retained Earnings Available for Dividend Declaration Schedule of Effective Standards and Interpretations Map of the Relationships of the Companies within the Group Financial Ratios .

328 260. Financial Assets December 31.461 768.248 1.149 261.461 768.024.659.195 (668.635.ABS-CBN CORPORATION and SUBSIDIARIES Schedule A.531.053 3.182.053 86.105 5.328 260.531.105 5.286 - 15.339 177.929) 7.195 (668.061 Trade and other receivables (excluding advances to suppliers) Airtime Subscriptions Others Advances to employees and talents Due from related parties (see Note 22) Others Allowance for doubtful accounts Subtotal Deposits AFS investments Total - 5.410 90.834 171.834 171.149 261.659.929) 7.024.182.948 8.339 5.286 Not Applicable Not Applicable 15.248 1. 2011 Value Based on Market Quotations at end of reporting period Name of Issuing Entity and Description of Each Issue Loans and Receivables : (Amounts in Thousands) Cash and Cash Equivalents Cash on hand and in banks Cash equivalents Subtotal Number of Shares or Principal Amount of Bonds and Notes Amount Shown in the Balance Sheet Income received & accrued 3.049.049.103.103.651 177.635.061 .948 8.

Amounts Receivable from Directors. Employees.ABS-CBN CORPORATION and SUBSIDIARIES Schedule B. Officers. Related Parties and Principal Stockholders (Other than Affiliates) December 31. . 2011 Deductions Balance at beginning of period Amounts collected Amounts written off Balance at end of period Name and Designation of debtor Additions Current Not current NONE Note: Receivables from officers and employees are within the ordinary course of business.

798.56 341.273.512.55 166342.150.59 15.89) Amounts Written Off Current 2.52 52.170.489.030.487.112 15.908.519.00 178.822. 2011 DEDUCTIONS Name and Designation of debtor ABS-CBN CORPORATION ABS-CBN CONSUMER PRODUCTS ABS-CBN FILM PRODUCTIONS.68 25.074.63 57.237.043.739.611.592.512.70 538.630.93 91.170.910.611.00 178. INC.961.80 75.06 1.52 5.822.82) (1.49 324.867. LOPEZ.041.17 139.537.682.961.348. INC.98 2.578.464.642.555.18 5.190.927.075.846.06 1.26 1.400.70 110.519.77) (87.703.847.683.259. E-MONEY PLUS.469.991.542.707.40 1.859.336.859.444.468.464.912.074.88 8.17 47.708.091.47 Non Current Balance at end of Period 2.406.) CENTER FOR COMMUNICATION ARTS.868.444.648.75 11.79 3.18 1.339.405.56 35.815.314.22) (16.612.888.804.00 122.577.744.99) (233.634.149.33 16.648.682.506.16 2.78 366. INC.300.192.07 8. ABS-CBN HUNGARY KFT.26 1.315.26 10.K.927. AMCARA BROADCASTING CORPORATION CENTRAL CATV.47 4.131.52 21.781. INC.03 374.024.612.24 11.663.443.88 386.146. ABS-CBN PUBLISHING. INC.673.339.26 10. (ROHQ) ABS-CBN NEWS CHANNEL INC. ABS-CBN GLOBAL CARGO CORPORATION ABS-CBN SSC PTE.88 379.311.041.126.010.56 341.00 122.537.683.165.576.190.ABS-CBN CORPORATION and SUBSIDIARIES Schedule C.39 178.72) (14.024..258.844. INC. SAPIENTIS HOLDINGS CORPORATION STAR RECORDINGS.024.798.44 5.482.859.844.33 23.238. (SKY CABLE INC.648.28 98.70 538.058.76 168.094.611.ULC ABS-CBN MULTIMEDIA.03 374.927.688.962.014.266.273.861.181. K.42 15.429.703.642.504.594.56) (35.40 15.504.283.015.252.134. INC CREATIVE PROGRAMS.336.258.14 5.887.519.28 4.616.512.469.78 779.401.074.87 95.795.300.138.598.18 5.149.213.40 173.59 15.243.27 19.447.384.024.594.27 19.47 35.ME ABS-CBN INTL EUROPE LTD .164. INC.846. INC.87 366.479. PROSTAR.689.514.66 14. LTD-SG ABS-CBN SHARED SERVICE CENTER PTE.70 110.587.311.26 10.868.621.47 4.469. ABS-CBN GLOBAL PHILS ABS-CBN INTL JAPAN.226.54 72.010.68 25. INC.248.797.022.72 1.195.27 3. ROADRUNNER NETWORK INC.75 11.81 1.861.47 - .42 15.52 106.355.623.590.243.682.555.17 139.573.82 101. ABS-CBN AUSTRALIA PTY LTD ABS-CBN INTL UK ABS-CBN INTERNATIONAL .213.415.31 2.33 23.663.621.52 106.88 379.227.322.490.634.122.06 15.17 25.50 1.655.47 35.309.84) (37.231. INC.23 83.309.72) (324.07 4.119. INC.471.245.76 168.192.945.041.63 5. ABS-CBN INTEGRATED AND STRATEGIC ABS-CBN INTERACTIVE.36 67.165.88 8.55) (148.238.007.79 125.767.027.47 24.1 Amounts Receivable from Related Parties which are eliminated during Consolidation of Financial Statements December 31.00 64.07 4.78 366.77) (53.38 2.202. Others Balance at beginning of period 1.587.648.871.21 95.015. STAR SONGS INC STUDIO 23.514.144.337.34) (2.480.415.637.194.134.798.146.16 341.010.00 66.87 95.400.259.63 5.041.00 22.334.18 1.195.708.688.621.128.32) (39.744.74) (372.640.833.ITALY ABS-CBN CANADA.72) (3.138.339.79) (6.964.94 Additions 1.900.31 391.41 Amounts Collected (74.258.593.300.943.490.70 538.438.227.237.

992.075.964. INC.81) Amounts Paid 5.742.00 101.899.708.489.800.740.780.031.271.251. Balance at beginning of period (241.07) (70. INC CREATIVE CREATURES (CCI) CREATIVE PROGRAMS.90) (2.670.431.52) (3.654.84) (5.195.096.352.745.440.874.800.928. ABS-CBN Culinary INC.99) (1.456.417.58) (1.275. INC.134. INC.299.733.54) (81.742.128.81) (72.117.497.803.709.07) (70.838.544.32) (82. LOPEZ.51 115.468.59) (708.88) (0.394.093.500.11) (4.074. ABS-CBN GLOBAL CARGO CORPORATION ABS-CBN SHARED SERVICE CENTER PTE.37) (49.13) (321.01) (7. INC.674.61) (465.071.485.296.485.778. (ROHQ) ABS-CBN NEWS CHANNEL INC. MANILA ELECTRIC COMPANY ROADRUNNER NETWORK INC.95) (1.04) (108.275.742.674.25) (81.00 72.28) (0.51) (115.795.12) (8.88) (0.794.046.K.440.239.272.330.576.12) (8. INC.43) (764.417.964.388.35) (26.271.401.64) (346.367.65 6.46) (3.49) (316.ABS-CBN CORPORATION and SUBSIDIARIES Schedule C.627.456.690.437.239.542.374.88 8.80) (8.330.489.108.. ABS-CBN HUNGARY KFT.096.43) (137.778.78) (111.809.52 2.ME ABS-CBN INTL EUROPE LTD .43) (764.164.794.872.779.46) (3.ITALY ABS-CBN PUBLISHING.497. ABS-CBN INTEGRATED AND STRATEGIC ABS-CBN INTERACTIVE.182.01) (4.000.119.708.LLC ABS-CBN INTL UK ABS-CBN INTERNATIONAL .15) (6.503.742.000.417.393.64) (346.80) (117.777.88 49.182.01) (61.35) (18.199.497.879.99) (1.450.92) (27.779.20) (7.61) (465.35) (26.58 Amounts Written Off Current (1.195.332.196. INC.49 135.733.00) (178.096.803.128.093.93) (607. ABS-CBN AUSTRALIA PTY LTD ABS-CBN INTERNATIONAL .670.391.75) (322.332.393.01) (4.497.309.24) Additions (787.97) (1.108.00) (80.672.01) (61.00 80.955.04) (247.544.93 200.777.330.288.2 Amounts Payable from Related Parties which are eliminated during Consolidation of Financial Statements December 31.17) (0.239.28) (0. E-MONEY PLUS.30) (4.576.028. AMCARA BROADCASTING CORPORATION BENPRES HOLDINGS BENPRES PUBLISHING.88) (0.087.928.150.66) .500. K.096.367.654.50) (3.04) (247.456.337. (SKY CABLE INC.440.132.32) (82.84) (24. INC.78) (111.97) (563.489.50) (3.12) (8.04) (108.028.254.096.04) (247. ABS-CBN GLOBAL PHILS ABS-CBN INTL JAPAN.690.576.82) (172.075.921.61) (465.12) (8.93 602.59) (1.) CENTER FOR COMMUNICATION ARTS.11) (9.84) (5.398.096.49) (316.195.485.402.97) (1. 2011 DEDUCTIONS Name and Designation of creditor ABS-CBN CORPORATION ABS-CBN CONSUMER PRODUCTS ABS-CBN FILM PRODUCTIONS.203.51) (10.000.66) Non-Current Balance at end of Period (1.46) (3.32) (136.95) (1. (FORMER GUIDE MAGAZINE) CENTRAL CATV.305.394.59) (1.42 4.708.254.388.872.431.795.117. INC.80 7.

419 6.609 915.172.095) (466.054.250 471.Process Video Rights and Record Master Customer Relationships Trademark Cable Channels. Music and Publication Rights Movie In.372 214.030 71.252.391 459.968 89.359 3.077.580 Note: Charge to other accounts and other changes represent effect of business combination .572 1. 2011 Description (Amounts in Thousands) Program Rights Story.148 915.968 92.325.111) (2.568 459.876 2.369 97.068 128.852) (9.711) (240.095) 133.061) (1.452 31. Intangible Assets .460 35.183) (466.568 6.ABS-CBN CORPORATION and SUBSIDIARIES Schedule D.CPI Production and Distribution Business-ME Total Beginning balance Additions at cost Charged to Cost and Expenses Deductions Charged to other accounts (Disposal) Other changes additions (deductions) Ending balance 2.066 (990.458 4.Other Assets December 31.613) (5.375.510.463.958 7.916 1.160 1.835) (3.670 1.621 9.

364 12.193 41.215 12.902 53.780 Title of Issue and type of obligation (Amounts in Thousands) Bank Loans Term Loans : Loan Agreement Term Loans : Syndicated loans Term Loans : Obligations under finance lease Total Amount of authorized indenture 400. 2011 Amount shown under caption "Current portion of long-term debt" Amount shown under caption "Longin related balance sheet term debt" in related balance sheet 400.709 11.693 663.615 1.671 11.ABS-CBN CORPORATION and SUBSIDIARIES Schedule E. Long-Term Debt December 31.101 10.000 209.686.000 10.698.848.150.881 .400 1.359.511.

Indebtedness to Related Parties December 31. 2011 Name of Related Parties Balance at beginning of period Balance at end of period NOT APPLICABLE .ABS-CBN CORPORATION and SUBSIDIARIES Schedule F.

2011 Total amount guaranteed and outstanding Name of issuing entity of securities guaranteed by Title of issue of each class the company for which this statement is filed of securities guaranteed Amount owned by person for which statement is filed Nature of guarantee NONE . Guarantees of Securities of Other Issuers December 31.ABS-CBN CORPORATION and SUBSIDIARIES Schedule G.

676 - . warrants.500.034 Others 330. 2011 Title of Issue Common Shares -₱1 Par value Number of shares authorized 1.000 Number of shares issued and outstanding as shown under related balance sheet caption 779.000.602 Directors. held by related conversion and other rights parties 447.985. Capital Stock December 31.312 Number of shares reserved Number of shares for options.583.ABS-CBN CORPORATION and SUBSIDIARIES Schedule H. officers and employees 1.012.585.

.

Financial Instruments: Presentation Adopted/Not adopted/ Not applicable Adopted Not applicable Adopted Not applicable Not applicable Not applicable Adopted Adopted Adopted Adopted Adopted Adopted Adopted Not applicable Adopted Adopted Adopted Adopted Adopted Not applicable Adopted Adopted Adopted Not applicable Adopted Adopted Not applicable Adopted Adopted . Leases PAS 18. Accounting and Reporting by Retirement Benefit Plans PAS 27. Exploration for and Evaluation of Mineral Resources PFRS 7. Financial Instruments: Disclosures PFRS 8. Accounting Policies. Operating Segments PAS 1. Construction Contracts PAS 12. Insurance Contracts PFRS 5. Share-based Payment PFRS 3. Non-current Assets Held for Sale and Discontinued Operations PFRS 6. Statement of Cash Flows PAS 8. Events after the Reporting Period PAS 11. Related Party Disclosures PAS 26. Inventories PAS 7. Borrowing Costs PAS 24. Employee Benefits PAS 20. Consolidated and Separate Financial Statements PAS 28. Accounting for Government Grants and Disclosure of Government Assistance PAS 21. First-time Adoption of Philippine Financial Reporting Standards PFRS 2.ABS-CBN CORPORATION AND SUBSIDIARIES SCHEDULE OF EFFECTIVE STANDARDS AND INTERPRETATIONS DECEMBER 31. Financial Reporting in Hyperinflationary Economies PAS 31. Presentation of Financial Statements PAS 2. The Effects of Changes in Foreign Exchange Rates PAS 23. Plant and Equipment PAS 17. Investments in Associates PAS 29. Property. Business Combinations PFRS 4. Interests in Joint Ventures PAS 32. 2011 PFRSs PFRS 1. Income Taxes PAS 16. Revenue PAS 19. Changes in Accounting Estimates and Errors PAS 10.

2008-01 (Revised): PAS 19. Reassessment of Embedded Derivatives Philippine Interpretation SIC–27. Intangible Assets . Contingent Liabilities and Contingent Assets PAS 38. Revenue .-2PFRSs PAS 33.78 – Rate used in discounting Adopted post-employment benefit obligations PIC Q&A No. Earnings per Share PAS 34. 2010-02: PAS 1R. Impairment of Assets PAS 37. Provisions.16 – Basis of preparation of financial statements Adopted . Agriculture Adopted/Not adopted/ Not applicable Adopted Not applicable Adopted Adopted Adopted Adopted Adopted Not applicable Philippine Interpretation IFRIC–4. Interim Financial Reporting PAS 36. Intangible Assets PAS 39.Barter Transactions Involving Advertising Services Philippine Interpretation SIC–32. Determining whether an Arrangement Adopted contains a Lease Philippine Interpretation IFRIC–9. Evaluating the Substance of Transactions Involving the Legal Form of a Lease Philippine Interpretation SIC–31.Web Site Costs Adopted Adopted Adopted Adopted PIC Q&A No. Financial Instruments: Recognition and Measurement PAS 40. Investment Property PAS 41.

2011 LOPEZ.24 60.84 LOPEZ HOLDINGS CORPORATION 57.3% Economic rights only ABS-CBN CORPORAT 100% 100% .ABS-CBN CORPORATION AND SUBSIDIARIES MAP OF THE RELATIONSHIPS OF THE COMPANIES WITHIN THE GROUP DECEMBER 31. INC. 52.

Incorporated 40% Sarimanok News Network. 100% ABS-CBN Integrated and Strategic Property Inc. Inc 100% ABS-CBN Interactive. PTE. 100% ABS-CBN Global Hungary Kft. Inc. Inc. 100% ABS-CBN Global Hungary Kft. 100% Culinary Publications. 100% Sky Vision Corporation 18. 100% ABS-CBN Multimedia. 100% ABS-CBN Film Productions. 100% Star Recording. Inc. Inc. Inc. . Inc. Ltd. 100% TV Food Chefs. Inc. Inc. Inc. Inc. 100% Roadrunner Network. Inc. Inc. Inc. ULC 100% ABS-CBN Australia Pty.8% ABS-CBN Global Ltd. 100% ABS-CBN Publishing. Inc. 100% Star Songs. 100% Sapientis Holdings Corporation 100% Columbus Technologies. Ltd. 100% ABS-CBN Global Manila Branch ABS-CBN Global Taiwan Branch ABS-CBN Europe Ltd. Inc. 100% ABS-CBN Shared Service Center.V. 100% Creative Programs. Inc. Inc. Ltd. 95% ABS-CBN Global Netherlands B. Inc. 100% Sky Cable Corporation 56. Luxembourg Branch ABS-CBN International. 100% ABS-CBN Global Remittance. 100% ABS CBN Center for Communication Arts. 100% Amcara Broadcasting Network.ABS-CBN Corporation Broadcasting Cable and Satellite Others ABS-CBN Corporation Parent Company Studio 23. 100% ABS-CBN Telecom North America. 100% ABS-CBN Italy Branch ABS-CBN Spain Branch ABS-CBN Japan. 100% ABS-CBN Middle East-FZ LLC 100% ABS-CBN Middle East LLC E-Money Plus. Inc.7% . 100% 100% The Big Dipper Digital Content & Design. 100% ABS-CBN Europe Remittance.Manila ROHQ ABS-CBN Global Cargo Corporation 100% Professional Services for Television & Radio. 100% ABS-CBN Canada. Inc. 100% ABS-CBN Canada Remittance. Inc. Inc. Inc. 100% ABS-CBN Shared Service Center PTE. 70% Multi-Media Telephony.

Home-Lipa Cable. Inc. Mactan CATV Network. Inc. Inc. – 100% 91. (SCHI) 100% Telemondial Holdings. Inc. Inc. Moonsat Cable Television.5% Pilipino Cable Corporation (PCC) Isla Cable TV. Inc.5% Discovery Cable. 70% JMY Advantage Corporation – 95% 100% Suburban Cable Network. Inc. – 100% 100% Satellite Cable TV. – 60% . – 100% 100% 45% Bisaya Cable Television Network. Inc. Inc. Inc. – 100% HM CATV. Inc. – 100% Sun Cable Holdings. 55% Cepsil Consultancy and Management Corporation – 100% Hotel Interactive Systems. Inc. (THI) 45. Davao Cableworld Television. Inc. – 100% Sun Cable Systems. Inc. – 70% 30% Cebu Cable Television.5% Cavite Cable Corporation – 100% HM Cable Networks.25% 91.52% 100% First Ilocandia CATV. Inc. – 100% 100% 54. Inc. Inc. Inc Bright Moon Cable Networks. Inc. – 92. Pacific CAT V.Sky Cable Sunvision Cable. – 100% Tarlac Cable Television Network. Inc. Inc.

658 3.832 10.64 5.518.19 0.046.240.461 0.658 44.585 25.67 Profitability ratios Gross Profit Margin Gross Profit Net Revenue Net Income Net Revenue 8.808.22 Asset-to-equity ratio 2.827 20.ABS-CBN CORPORATION and SUBSIDIARIES Financial Ratios December 31.576 2.163 25.335.490.507.046.876.948 1.76 1.076 20.36 Net Debt-to-equity ratio Interest-bearing loans and borrowings less Cash and Cash equivalent Total Stockholders' Equity Total Assets Total Stockholders' Equity EBIT Interest Expense 3.335.511.342 698.20 2. 2011 RATIOS Formula In Php ('000s) 2011 2010 Current Ratio Current Assets Current Liabilities 18.576 34% 46% Net Income Margin 10% 12% .20 Interest rate coverage ratio 4.