AYALA LAND, INC. ______(Company’S Full Name)
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SEC Number: 152-747 File Number: ________ AYALA LAND, INC. ___________________________________ (Company’s Full Name) 31F, Tower One, Ayala Triangle Ayala Avenue, Makati City 1226 ___________________________________ (Company Address) (632) 750-6974 ___________________________________ (Telephone Number) June 30, 2018 ___________________________________ (Quarter Ending) SEC Form 17-Q Quarterly Report (Amended) ___________________________________ (Form Type) April 1 – June 3, 2018 Income Statement Items ___________________________________ (Amendments) SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended June 30, 2018 2. Commission Identification Number 152747 3. BIR Tax Identification No. 000-153-790-000 4. Exact name of issuer as specified in its charter: AYALA LAND, INC. 5. Province, Country or other jurisdiction of incorporation or organization: Makati City, Philippines 6. Industry Classification Code: _______ (SEC Use Only) 7. Address of issuer’s principal office and postal code: 31F, Tower One, Ayala Triangle, Ayala Avenue, Makati City 1226 8. Issuer’s telephone number, including area code: (632) 750-6974 9. Former name, former address, former fiscal year: Not applicable 10. Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA As of June 30, 2018 Title of each class Number of shares issued and outstanding Common shares 14,726,564,771 Preferred shares 13,066,494,759 Amount of Debt Outstanding P105,387,600,000.00 11. Are any or all of the securities listed on a Stock Exchange? Yes [x] No [ ] Stock Exchange: Philippine Stock Exchange Securities listed: Common shares 12. Indicate by check mark whether the registrant: (a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 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 12 months (or for such shorter period that the registrant was required to file such reports): Yes [x] No [ ] (b) has been subject to such filing requirements for the past 90 days: Yes [x] No [ ] TABLE OF CONTENTS Page No. PART I - FINANCIAL STATEMENTS Item 1. Financial Statements • Unaudited Consolidated Statements of Financial Position as of 1 June 30, 2018 and December 31, 2017 • Unaudited Consolidated Statements of Income for the First Half 2 ended June 30, 2018 and 2017 • Unaudited Consolidated Statements of Comprehensive Income for 3 the First Half ended June 30, 2018 and 2017 • Unaudited Consolidated Statement of Changes in Equity for 4 the First Half Ended June 30, 2018 and 2017 • Unaudited Consolidated Statements of Cash Flows for the First Half 5 Ended June 30, 2018 and 2017 • Notes to Interim Consolidated Financial Statements 6 Item 2. Management’s Discussion and Analysis of the Financial Condition 36 and Results of Operations PART II - OTHER INFORMATION Item 3. Developments as of June 30, 2018 42 Item 4. Other Notes to 1H 2018 Operations and Financials 43 Item 5. Performance Indicators 46 Signature 47 PART I – FINANCIAL INFORMATION Item 1. Financial Statements AYALA LAND, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Amounts in Millions) June 2018 December 2017 Unaudited Audited ASSETS Current Assets Cash and cash equivalents (note 4) ₱22,492 ₱20,998 Short-term investments (note 5) 5,980 4,740 Financial assets at fair value through profit or loss (note 6) 565 541 Accounts and notes receivable (note 7) 109,837 98,311 Inventories (note 8) 60,337 62,192 Other current assets 29,711 31,779 Total Current Assets 228,922 218,561 Noncurrent Assets Noncurrent accounts and notes receivable 34,359 44,523 Available-for-sale financial assets 1,149 1,475 Land and improvements (note 9) 96,083 94,277 Investments in associates and joint ventures (note 10) 20,394 26,801 Investment properties – net 152,288 134,616 Property and equipment – net 29,982 28,524 Deferred tax assets - net 12,083 10,648 Other noncurrent assets 18,836 14,567 Total Noncurrent Assets 365,174 355,431 Total Assets ₱594,096 ₱573,992 LIABILITIES AND EQUITY Current Liabilities Short-term debt (note 11) ₱11,752 ₱17,644 Accounts and other payables (note 12) 140,148 137,684 Income tax payable 1,039 978 Current portion of long-term debt (note 11) 24,723 6,573 Deposits and other current liabilities 15,310 21,744 Total Current Liabilities 192,972 184,623 Non-Current Liabilities Long-term debt - net of current portion (note 11) 145,574 150,168 Pension liabilities 1,532 1,536 Deferred tax liabilities - net 3,616 3,544 Deposits and other non-current liabilities 48,619 41,857 Total Non-Current Liabilities 199,341 197,105 Total Liabilities 392,313 381,728 Equity Equity attributable to equity holders of Ayala Land, Inc. Paid-up capital 62,063 61,949 Retained earnings 119,742 109,976 Stock options outstanding 100 99 Remeasurement loss on defined benefit plans (161) (160) Net unrealized gain on available-for-sale financial assets (17) 41 Cumulative translations adjustments 1,419 1,002 Equity reserves (note 13) (18,635) (6,152) 164,511 166,755 Non-controlling interests 37,272 25,509 Total Equity 201,783 192,264 Total Liabilities and Equity ₱594,096 ₱573,992 1 AYALA LAND, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (Amounts in Millions, Except Earnings Per Share Figures) 2018 Unaudited 2017 Unaudited April 1 to January 1 to April 1 to January 1 June 30 June 30 June 30 June 30 REVENUE Real estate ₱40,571 ₱75,841 ₱30,838 ₱60,519 Interest and Investment Income 1,904 3,077 1,499 2,958 Equity in net earnings of associates and joint ventures 243 410 224 361 Other income 695 1,062 323 688 43,413 80,390 32,883 64,526 COSTS AND EXPENSES Real estate 27,096 49,175 19,586 38,806 General and administrative expenses 2,311 4,282 1,717 3,522 Interest and other financing charges 2,377 4,620 1,999 3,881 Other charges 334 685 213 436 32,118 58,763 23,515 46,644 INCOME BEFORE INCOME TAX 11,295 21,627 9,368 17,882 PROVISION FOR INCOME TAX Current 3,008 6,265 2,190 4,513 Deferred 45 (461) 285 39 3,053 5,804 2,475 4,552 NET INCOME ₱8,242 ₱15,823 ₱6,893 ₱13,330 Net income attributable to: Equity holders of Ayala Land, Inc. ₱7,021 ₱13,538 ₱5,948 ₱11,512 Non-controlling interests 1,221 2,285 945 1,818 ₱8,242 ₱15,823 ₱6,893 ₱13,330 Earnings Per Share Basic ₱0.47 ₱0.92 ₱0.40 ₱0.78 Diluted 0.47 0.92 0.40 0.78 2 AYALA LAND, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in Millions) 2018 Unaudited 2017 Unaudited April 1 to January 1 to April 1 to January 1 to June 30 June 30 June 30 June 30 NET INCOME ₱8,242 ₱15,823 ₱7,900 ₱13,330 Other comprehensive income/loss Net unrealized gain (loss) on available-for-sale financial assets (74) (59) (55) (42) Total comprehensive income for the period ₱8,168 ₱15,764 ₱7,845 ₱13,288 Total comprehensive income attributable to: Equity holders of Ayala Land, Inc. ₱6,947 ₱13,479 ₱6,748 ₱11,470 Non-controlling interests 1,221 2,285 1,097 1,818 ₱8,168 ₱15,764 ₱7,845 ₱13,288 3 AYALA LAND, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in Thousands) AYALA LAND, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in Thousands) Attributable to equity holders of Ayala Land, Inc. Net Unrealized Remeasurement Gain (Loss) Gain (Loss) on Availablefor- Additional Appropriated Unappropriated Stock on Defined Sale Cumulative Paid-in Subscriptions Retained Retained Options Benefit Financial Translation Equity Non-Controlling Capital Stock Capital Receivable Earnings Earnings Outstanding Plans Assets Adjustments Reserves Total Interests Total Equity As of January 1, 2018 16,031,596 47,454,241 (1,537,126) 8,000,000 101,976,450 99,064 (160,015) 40,530 1,001,986 (6,152,115) 166,754,611 25,508,747 192,263,358 Net income 13,538,330 13,538,330 2,284,835 15,823,165 Other comprehensive income (loss) (1,349) (57,205) 416,950 358,396 358,396 Total comprehensive income 16,031,596 47,454,241 (1,537,126) 8,000,000 115,514,780 99,064 (161,364) (16,675) 1,418,936 (6,152,115) 180,651,337 27,793,582 208,444,919 Cost of stock options 64,502 64,502 64,502 Collection of subscription receivable 48,339 48,339 48,339 Stock options exercised 1,617 1,421 3,038 3,038 Acquisition of non-controlling interest - - Increase in non-controlling interest - 9,533,250 9,533,250 Net change in non-controlling interest (12,482,965) (12,482,965) (12,482,965) Cash dividends declared (3,772,725) (3,772,725) (55,232) (3,827,957) As of June 30, 2018 16,033,213 47,518,743 (1,488,787) 8,000,000 111,742,055 100,485 (161,364) (16,675) 1,418,936 (18,635,080) 164,511,526 37,271,599 201,783,126 As of January 1, 2017 16,019,332 46,928,521 (1,385,682) 8,000,000 83,798,555 89,697 (356,918) 43,594 - (5,432,003) 147,705,096 24,978,092 172,683,188 Net income 5,564,096 5,564,096 872,556 6,436,652 Other comprehensive income (loss) 27,408 (1,232) 26,176 26,176 Total comprehensive income 16,019,332 46,928,521 (1,385,682) 8,000,000 89,362,651 89,697 (329,510) 42,362 - (5,432,003) 153,295,368 25,850,648 179,146,016 Cost of stock options 25,348 25,348 25,348 Collection of subscription receivable - - Stock options exercised 1,565 1,565 1,565 Acquisition of non-controlling interest - - Increase in non-controlling interest - 191,394 191,394 Net change in non-controlling interest (2,196) (2,196) (2,196) Cash dividends declared (3,531,044) (3,531,044) (3,531,044) As of June 30, 2017 16,019,332 46,953,869 (1,385,682) 8,000,000 85,831,607 91,262 (329,510) 42,362 - (5,434,199) 149,789,041 26,042,042 175,831,083 4 AYALA LAND, INC.