ABS-CBN Corporation Sgt
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ABS-CBN Corporation Sgt. Esguerra Avenue, Quezon City, Philippines 2 May 2011 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: SEC 17-A Gentlemen / Ladies: In compliance with the Philippine Stock Exchange’s disclosure regulations for publicly listed companies, we are submitting herewith the SEC 17-A for the year ending December 31, 2010 Very truly yours, Paul Michael V. Villanueva, Jr. Compliance Officer for Corporate Governance COVER SHEET 1 8 0 3 SEC Registration Number A B S - C B N C O R P O R A T I O N ( f o r m e r l y A B S - C B N B R O A D C A S T I N G C O R P O R A T I O N ) A N D S U B S I D I A R I E S (Company’s Full Name) S G T . E S G U E R R A A V E . C O R N E R M O . I G N A C I A S T . Q U E Z O N C I T Y (Business Address: No. Street City/Town/Province) Rolando P. Valdueza 415-2272 (Contact Person) (Company Telephone Number) 1 2 3 1 1 7 A 0 6 1 6 Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) (Secondary License Type, If Applicable) Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings 6,286 P=9.6 billion $1.0 million Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S 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, 2010 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 6. (SEC Use Only) Province, Country or other jurisdiction of Industry Classification Code: incorporation or organization 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 Title of Each Class Outstanding and Amount of Debt Outstanding Common Stock, Php1.00 par value 779,584,602 as at December 31, 2010 Short-term & Long-term debt (current & non-current) Php9.6 billion 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. ABS-CBN commanded 45% in total day audience share (6am to 12mn), the highest among all free-to-air and cable channels, based on Taylor Nelson Sofres’ National Urban Philippines Television Audience Measurement for 2009 (the service was officially launched on February 1, 2009). 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-2010, ABS-CBN Global accounts for almost eighteen percent (18%) 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 ABS-CBN traces its roots from Bolinao Electronics Corporation (BEC), established in 1946 as an assembler of radio transmitting equipment. In 1952, BEC adopted the business name Alto Broadcasting Corporation (ABS) and began setting up the country’s first television broadcast by 1953. On September 24, 1956, Chronicle Broadcasting Network (CBN), owned by Don Eugenio Lopez Sr. of the Lopez family, was organized primarily for radio broadcasting. In 1957, Don Eugenio Lopez Sr. acquired ABS and on February 1, 1967, the operations of ABS and CBN were integrated and BEC changed its corporate name to ABS-CBN Broadcasting Corporation. ABS-CBN achieved many firsts since it started the television industry in the country in 1953. However, with the imposition of martial law in September 1972, ABS-CBN ceased operations as the government forcibly took control of the Company. ABS-CBN resumed commercial operations in 1986 after the People Power or EDSA revolution. Recovery after 14 years of absence was difficult as resources were scarce.