Blurb-25 File-464 Fph 2010 Annual Report Volume 1 .Pdf
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ABOuT Our COvEr On the cover is the Balangay team raising the Philippine flag. The Balangay team, consisting of a hardy crew of 40, journeyed throughout Southeast Asia in 14 months, using three replicas of ancient Filipino boats and relying on the sun, the stars, the wind, BuSiNESS MiSSiON Our basic purpose is to create new wealth for our stakeholders. cloud formations, wave patterns, and bird migrations to navigate. The team covered 14,000 kilometers and braved unfamiliar, even Our businesses will focus on vital needs for national development stormy seas thereby showcasing the best of the Filipino to the in the areas of energy, infrastructure, manufacturing and supporting industries. world. CrEdO First Philippine Holdings renews its commitment to Philippine We believe in the Filipino’s ability to innovate, to seize developmental opportunities borne from the real needs development, as it braves new horizons through pioneering and of domestic and overseas markets. sustainable undertakings. The Company will continue to represent the best of the Filipino, united by shared values and consistently We affirm our partnership with the Filipino in their endeavor of ever adhering to global best practices in clean and renewable energy pushing the social development frontiers beyond currently known limits. generation, power distribution, property and infrastructure development, and manufacturing for the electrical and solar We share the Filipino’s vision of spreading gainful employment to power industries, while consciously and deliberately protecting all who are willing to put their talents in the total betterment of the Filipino. the environment for the benefit of future generations. ThE FPh Commitments We at the First Philippine Holdings commit to the Filipino nation: TABLE OF CONTENTS • Our continuing search for innovative ventures and technology Business Mission, Credo and Commitments IFC that optimize human and natural resources bringing out the Financial Highlights 1 best from the Filipino mind and skills; and Investment Summary 2 • Our thrust towards the development of communities and Organizational Structure 3 persons we influence in our work. At a Glance 4 FPH at Fifty 6 We commit to our suppliers of goods and services: Message of the Chairman Emeritus and Chief Strategic Officer 8 • Our adherence to conducting business transactions with Message of the Chairman and Chief Executive Officer 14 integrity, fairness, and professionalism; Message of the President and Chief Operating Officer 16 • Our willingness to assist in their development; and Message of the Chief Finance Officer 20 • Our continuous assistance in improving the quality of such Board of Directors 24 services. Senior Management 28 Key Officers 30 We commit to our stockholders: Corporate Governance 32 • Our untiring efforts to give competitive returns on their Board Committees 35 investments while exercising prudence in our decisions. Business Excellence 36 Corporate Social Responsibility 40 We commit to our customers: Operations Review • Our unceasing quest to meet their needs; and Power Generation • Our uncompromising struggle for excellence in meeting their First Gen Corporation (First Gen) 44 expectations. Power Distribution Manila Electric Company (Meralco) 48 We commit to all members of the FPH family: Panay Electric Company (PECO) 51 • Our institution of better and more comprehensive programs Manufacturing that allow for total personal development; and First Philippine Electric Corporation (First Philec) 52 • Our constant search for more effective ways to foster Property teamwork and employee participation to attain higher levels of Rockwell Land Corporation (Rockwell Land) 56 productivity and creativity. First Philippine Industrial Park (FPIP) 58 Other Businesses First Balfour, Inc. (First Balfour) 60 First Philippine Industrial Corporation (FPIC) 62 Securities Transfer Services, Inc. (STSI) 63 Asian Eye Institute (Asian Eye) 64 Corporate Directory 66 Lopez Credo and Acknowledgements IBC The First Philippine Holdings 2010 Annual Report is printed on 9Lives Silk, a paper made of carbon neutral quality composed of 55% post-consumer waste. 1 FiNANCiAL highLighTS December 31 OPERATING RESULTS (In million Php)1 2010 2009 (as restated) Revenues 64,285 59,094 Sale of electricity 52,973 48,243 Sale of merchandise 6,076 4,341 Equity in net earnings of associates 2,777 2,097 Contracts and services 1,697 1,390 Sale of real estate 657 1,044 Share in project revenue of joint ventures 105 1,979 Finance costs (5,594) (6,897) Foreign exchange loss (241) (442) Provision for income tax 1,935 2,027 Gain on sale of investment in an associate 23,560 8,957 Net income for the year 28,372 13,074 Net income attributable to equity holders of the parent 24,850 8,731 FINANCIAL POSITION (In million Php)2 Total assets 160,534 149,027 Investments and deposits in associates 57,222 63,529 Total debt 66,437 86,236 Total long-term debt 42,311 54,852 Total liabilities 69,154 88,920 Total equity attributable to equity holders of the parent 63,679 38,691 Total equity attributable to equity holders of the parent - adjusted3 80,984 53,863 Total equity 91,380 60,107 Total equity - adjusted3 108,685 75,279 FINANCIAL RATIOS Return on equity4 36.86% 17.60% Dividend payout ratio5 13.28% 39.18% Current Ratio (times)6 1.87 1.41 Debt to equity (times)7 0.61 1.15 PER SHARE DATA (In Php) Earnings per share8 Basic 41.076 13.837 Diluted 40.652 13.779 Book value per share9 133.55 83.39 Price earnings ratio10 1.52 3.47 Market price 62.60 48.00 Cash dividend per share11 1.96 0.79 Number of common shares issued, subscribed and outstanding 574,194,048 594,326,513 Weighted average number of shares Basic 591,270,907 590,355,623 Diluted 597,441,198 592,805,699 Number of stockholders 12,899 13,019 1 The statements of income for the years ended December 31, 2010 and 2009 are set out on the consolidated financial statements. 2 The statement of financial position as of December 31, 2010 and 2009 are set out on the consolidated financial statements. 3 Equity - adjusted excludes cumulative translation adjustments (CTA), share in other comprehensive income of associates, and equity reserve pertaining to effect of dilution of a subsidiary and effect of acquisition of minority interests 4 Return on equity = net income for the year attributable to equity holders of the parent / average total equity attributable to equity holders of the parent - adjusted 5 Dividend payout ratio = dividends paid to common shareholders by parent / last year’s net income attributable to equity holders of the parent 6 Current ratio = current assets / current liabilities 7 Debt to equity ratio = total debt / total equity - adjusted. The details of the total debt are set out on the notes to consolidated financial statements (Note 32). 8 The EPS computation for the years ended December 31, 2010 and 2009 are set out on the notes to the consolidated financial statements (Note 29). 9 Book value per share = (total equity attributable to equity holders of the parent - adjusted less preferred equity) / number of common shares, subscribed and outstanding 10 Price-Earnings ratio = market value per share / basic earnings per share 11 Cash dividend per share = cash dividends paid to common shareholders / weighted average number of common shares (basic) 2010 Annual Report 2 2010 iNvESTMENT SuMMAry Amounts in Thousands Php % Ownership5 Revenues Net Income Total Total Total (loss)6 Assets Liabilities Equity6 POWER GENERATION AND POWER RELATED1 First Gas Power Corporation 4 39.75 34,768,088 3,538,814 35,633,853 26,778,524 8,855,329 Energy Development Corporation 28.54 24,901,616 4,115,747 81,303,593 49,064,612 30,669,891 FGP Corp. 4 39.75 18,166,689 2,358,288 16,023,695 7,043,291 8,980,405 First Gen Hydro Power Corporation 43.62 2,139,536 704,552 9,016,116 5,087,161 3,928,955 Bauang Private Power Corporation 4 24.71 457,194 (7,286) 251,452 13,639 237,813 FG Bukidnon Power Corp. 66.25 37,359 7,282 163,703 26,565 137,138 POWER DISTRIBUTION Manila Electric Company2 6.60 245,461,000 9,685,000 178,968,000 115,772,000 58,969,000 Panay Electric Company 7 30.00 3,790,867 321,561 2,358,706 1,195,494 1,163,212 MANUFACTURING3 First Philec Solar Corporation 7 74.54 4,424,633 200,953 5,239,488 3,299,732 1,939,756 First Sumiden Circuits, Inc. 4 40.00 2,647,529 (97,318) 1,715,188 1,322,889 392,299 Philippine Electric Corporation 99.15 1,353,999 43,406 1,086,026 652,479 433,547 First Philec Manufacturing 100.00 399,542 26,350 361,836 249,579 112,257 Technologies Corporation First Philippine Power Systems, Inc. 100.00 178,424 26,577 148,602 42,587 106,016 First Electro Dynamics Corporation 100.00 77,764 (4,603) 151,989 100,439 51,550 PROPERTY Rockwell Land Corporation 49.00 4,949,367 801,307 13,955,404 5,708,330 8,247,074 First Philippine Industrial Park, Inc. 70.00 873,432 312,250 3,054,392 131,378 2,923,014 First Philippine Realty Corporation 100.00 95,143 (16,788) 1,583,900 21,918 1,561,983 First Sumiden Realty, Inc.3, 4 60.00 17,861 8,514 127,085 7,259 119,826 OTHER BUSINESSES First Balfour, Inc. 100.00 933,961 35,819 1,924,979 1,346,641 578,337 First Philippine Industrial Corporation 60.00 580,275 (45,595) 1,797,565 698,516 1,099,048 Securities Transfer Services, Inc. 100.00 11,149 (17,997) 19,150 15,946 3,204 1 Through First Gen 2 Direct and through FPUC 3 Through First Philec 4 Dollar denominated results of operations and financial conditions were converted to Php using the conversion rate of US$1:Php45.309 and US$1:Php43.840, respectively.