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TABLE OF CONTENTS
AR 2006.indd 1
3
Financial Highlights
4
Message of the Chairman
6
Financial Review
8
A Kapamilya Nation
16
Management’s Responsibility for Financial Statements
17
Report of Independent Auditors
18
Financial Statements
Balance Sheets
Statements of Income
Statements of Changes in Stockholders’ Equity
Statements of Cash Flows
Notes to Financial Statements
68
Board of Directors
70
Management Committee
72
Awards and Recognition
73
List of Officers
77
Corporate Addresses
79
Banks and Other Financial Institutions
4/24/07 8:10:44 AM
FINANCIAL HIGHLIGHTS
AR 2006.indd 2-3
4/24/07 8:10:49 AM
AR 2006.indd 4-5
4/24/07 8:11:09 AM
Operating expenses, which consist of production cost, general and administrative
expenses, cost of sales and services, and agency commission declined by 2%
to P15,724 million in 2006. Cash operating expenses were flat while non-cash
operating expenses declined by 14% YoY. If we strip-out the non-recurring charges,
total opex went up by 5% to P15,257 million.
Management Discussion and Analysis of Financial Condition and Results of
Operations for 2006
ABS-CBN Broadcasting Corporation’s (ABS-CBN) net income in 2006 more than
doubled to P741 million from P252 million in 2005. Despite an industry wide
slowdown in ad spending particularly in 2H06, airtime revenues grew by 3% to
P10,663 million in 2006. In addition, revenues were boosted by license fees from
the migration of DTH (direct-to-home) subscribers in North America to DIRECTV’s
platform. Expense growth, on the other hand, remained controlled due to more
prudent production cost spending coupled with lower employee cost.
Gross revenues, which consist of gross airtime revenues, sale of services, license
fees, and sale of goods rose by 2% year on year (YoY) to P17,386 million for 2006.
10,663
5,077
1,117
529
17,386
10,334
4,248
1,619
846
17,047
329
829
(502)
(317)
339
3
20
(31)
(37)
2
Consolidated gross airtime revenues improved by 3% to P10,663 million. Parent
airtime revenues, which consist of revenues from Channel 2, AM and FM radio, and
the regional network, likewise went up by 3% to P9,602 million.This can be primarily
attributed to higher revenue contribution from non-traditional advertisements
or creative buys such as product intrusions and product placements. Airtime
revenues of other platforms, on the other hand, grew by 9% YoY to P1,060 million
on the back of higher airtime revenues of ABS-CBN Global.
3,131
1,117
4,248
618
211
829
20
19
20
9,362
971
10,334
240
89
329
3
9
3
License fees, which represent revenues from the migration of existing US DTH
subscribers to DIRECTV’s platform as well as take up of new subscribers, declined
by 31% to P1,117 million in 2006 from P1,619 million in 2005 as the migration
period for both new and existing US DTH subscribers to DIRECTV’s platform ended
last August.
Sale of services, which refers to revenues derived from cable and satellite
programming services, film production and distribution, interactive media, content
development and programming services, post production, text messaging, etc.,
increased by 20% to P5,077 million in 2006.
Accounting for 74% of total, ABS-CBN Global registered a 20% growth in sale of
services to P3,749 million from P3,131 million in 2005. Although DTH subscription
revenues in North America were reduced by half following the deal with DIRECTV,
these were offset by higher subscription revenues on the back of robust subscriber
take-up.
As of end-December, total subscriber base of ABS-CBN Global grew by 21% YoY,
equivalent to 1.6 million viewers worldwide.
2,513
(101)
(4)
840
946
4,300
1,391
5,691
(7)
152
44
(20)
24
(1)
16
1
(1)
0
244
285
529
501
344
846
(258)
(59)
(317)
(51)
(17)
(37)
Expenses
Total expenses went down by 4% to P15,976 million in 2006. However, excluding
non-recurring charges of P467 million in 2006 related to DIRECTV marketing
expenses as well as P1,420 million DIRECTV marketing expenses and Special
Separation Program (SSP) expenses booked in 2005, total recurring expenses went
up by 2% to P15,508 million.
Production cost
5,714
General and administrative
5,135
Cost of sales and services
2,417
Agency commission, incentives,
& co-prod share
2,458
Other expenses
252
Total expenses
15,976
Less: non-recurring expense
467
Total recurring expenses
15,508
5,691
5,847
2,374
24
(712)
44
0
(12)
2
2,085
623
16,620
1,420
15,200
373
(372)
(644)
(952)
308
18
(60)
(4)
(67)
2
1,170
904
2,075
1,235
1,172
2,407
(64)
(268)
(332)
(5)
(23)
(14)
Depreciation expense, on the other hand, decreased by 5% to P1,170 million given
controlled capital spending.
Operating Income
With revenues growing faster than operating expenses, operating income improved
by 58% from P1,051 million to P1,661 million as of December. Consequently,
operating margin went up to 10% as against 6% in the same period last year.
Net Income
Consolidated general and administrative expenses (GAEX) dropped by 12% YoY to
P5,135 million from P5,847 million the previous year. Excluding non-cash charges
such as depreciation and amortization, consolidated cash GAEX likewise declined
by 7% to P4,630 million. However, without the non-recurring charges, total
recurring GAEX is up by 5% or in line with inflation rate.
ABS-CBN Global
Other subsidiaries
Total sale of goods
Parent airtime revenues
9,602
Other platforms
1,060
Gross airtime revenues 10,663
2,412
Personnel expenses and
talent fees
833
Facilities related expenses
1,098
Other program expenses
Sub-total - cash production cost 4,344
1,370
Non-cash production cost
5,714
Total production cost
Meanwhile, sale of goods which refers to revenues arising from the sale of
consumer products such as magazines, audio, video products and phonecards,
dropped by 37% to P529 million in 2006.
ABS-CBN Global’s sale of goods, which contributed 46% of total, dropped by 51%
to P244 million after it stopped selling prepaid phonecards in the United States
to concentrate on its core business of content distribution. Sale of goods of other
subsidiaries, on the other hand, declined by 17% due mainly to lower sales of audio
products by Star Records as there were fewer hit music records in 2006.
Depreciation
Amortization
Non-cash expenses
ABS-CBN Films released nine movies in 2006 compared to five movies the prior
year. Out of the nine movies released, ticket sales of four movies namely Don’t
Give up on Us, Close to You, Sukob, and You are the One surpassed the P100 million
blockbuster mark. In particular, the horror movie, Sukob, grossed more than P200
million at the box office, making it the highest grossing local movie in Philippine
history.
AR 2006.indd 6-7
3,749
1,328
5,077
Other subsidiaries’ sale of services, on the other hand, went up by 19% to P1,328
million due primarily to a 26% increase in ABS-CBN Films’ revenues.
Revenues
Airtime revenues
Sale of services
License fees
Sale of goods
Gross revenues
ABS-CBN Global
Other subsidiaries
Total sale of services
Production cost was almost flat YoY at P5,714 million. Excluding non-cash charges
such as depreciation and amortization of program rights, cash production cost
increased slightly to P4,344 million. Talent fees, which account for 42% of total
production cost, declined by 4% to P2,412 million as a result of a more efficient
production planning which led to lesser number of taping days. Other program
expenses, on the other hand, went up by 16% to P1,098 million due to expenses
related to the Pacquiao fights coupled with increased marketing activities in the
provinces to enhance the Company’s leadership nationwide.
Non-cash operating expenses, composed primarily of depreciation and
amortization, went down by 14% to P2,075 million in 2006 from P2,407 million
in the same period last year. Bulk of the decline can be attributed to lower
amortization costs which dropped by 23% to P904 million as the Company already
completed the amortization of deferred subsidies on the decoder boxes of existing
US DTH subscribers in 2005. Amortization of program rights, on the other hand,
increased by 7% to P887 million as the Company accelerated the amortization of
movies based on their commercial viability.
Personnel expenses
Advertising and promotions
Facilities related expenses
Contracted services
Taxes and licenses
Entertainment, amusement
and recreation
Other expenses
Sub-total -cash GAEX
Non-cash GAEX
Total GAEX
Less: non-recurring expense
Total recurring GAEX
2,078
520
537
448
151
139
2,505
503
496
404
151
119
(427)
16
41
43
0
20
(17)
3
8
11
0
17
757
4,630
505
5,135
467
4,667
816
4,995
852
5,847
1,420
4,427
(58)
(365)
(347)
(712)
(952)
240
(7)
(7)
(41)
(12)
(67)
5
Cost of sales and services went up by 2% to P2,417 million in 2006. This compares
against a 10% growth in combined sale of services and sale of goods hence
reflecting margin improvement of the subsidiaries. ABS-CBN Global, which
accounted for 58% of cost of sales and services, registered a 3% decline in cost
of sales.
ABS-CBN Global
Other subsidiaries
Total cost of sales and
services
1,406
1,011
2,417
1,454
920
2,374
47
91
44
Other expenses declined by 60% to P252 million in 2006 from P623 million in
2005. Net finance costs decreased by 10% to P648 million on the back of lower
outstanding debt as of December. Other income, on the other hand, increased by
56% to P449 million from P287 million due to gate receipts from the PacquiaoLarios boxing bout organized by the Company in July. Meanwhile, equity losses
reached P52 million as against P194 million the prior year, reflecting the continued
improvement in Skycable’s operations.
As a result of the improvement in operating income and lower other expenses, the
Company reported a net income of P742 million in 2006, 187% higher YoY. Net of
minority interest, net income attributable to equity holders reached P741 million
in 2006, up 194% YoY from P252 million in 2005. Similarly, earnings before interest,
taxes, depreciation, and amortization (EBITDA) went up by 19% to P4,188 million,
translating to an EBITDA margin of 24%.
Balance Sheet Accounts
Total consolidated assets reached P23,902 million, 4% lower versus end-2005.
Cash and cash equivalents declined by 5% to P1,662 million. Consolidated trade
and other receivables dropped by 6% to P4,382 million with trade receivables
accounting for 81% of total. Trade receivables increased by 3% to P4,010 million,
translating to trade days sales outstanding (DSO) of 84 days or flat versus 2005.
Other current assets increased by 28% to P1,011 million due mainly to production
expenses of yet to be aired episodes of the Company’s programs particularly soap
operas as well as upcoming movies of ABS-CBN Films. Since 2005, the Company
begun the canning or advanced taping of some shows in order to cut location
rentals and maximize efficiencies from production planning.
Total interest-bearing loans and borrowings declined by 27% to P4,574 million
from P6,276 million in end-2005 following the payment of P1,798 million in loans
in 2006. As a result, net debt to equity ratio declined to 0.21x from 0.34x in 2005.
Meanwhile, total capital expenditure including program rights acquisition reached
P891 million in 2006, 25% lower versus last year as the Company controlled capital
spending to prioritize its loans payments during the year.
(3)
10
2
4/24/07 8:11:11 AM
AR 2006.indd 8-9
4/24/07 8:11:23 AM
AR 2006.indd 10-11
4/24/07 8:11:46 AM
AR 2006.indd 12-13
4/24/07 8:11:58 AM
AR 2006.indd 14-15
4/24/07 8:12:19 AM
STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The management of ABS-CBN Broadcasting Corporation is responsible for all information and representations contained
in the consolidated balance sheets as of December 31, 2006 and 2005 and the related consolidated statements of income,
changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006. The
consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the
Philippines and reflect amounts that are based on the best estimates and informed judgment of management with an
appropriate consideration to materiality.
In this regard, management maintains a system of accounting and reporting which provides for the necessary internal
controls to ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use
or disposition and liabilities are recognized. The management likewise discloses to the company’s audit committee and to
its external auditor: (i) all significant deficiencies in the design or operation of internal controls that could adversely affect
its ability to record, process, and report financial data; (ii) material weaknesses in the internal controls; and (iii) any fraud that
involves management or other employees who exercise significant roles in internal controls.
The Board of Directors reviews the financial statements before such statements are approved and submitted to the
stockholders of the Company. Sycip, Gorres, Velayo & Co., the independent auditors appointed by the stockholders, have
audited the parent and consolidated financial statements of the Company in accordance with generally accepted auditing
standards in the Philippines and have expressed their opinion on the fairness of presentation upon completion of such
examination, in their report to the Board of Directors and stockholders.
EUGENIO L. LOPEZ III
Chairman and Chief Executive Officer
MIGUEL JOSE T. NAVARRETE
Vice President and Chief Financial Officer
AR 2006.indd 16-17
4/24/07 8:12:20 AM
ABS-CBN BROADCASTING CORPORATION
AND SUBSIDIARIES
Consolidated Financial Statements
December 31, 2006 and 2005
and Years Ended December 31, 2006, 2005 and 2004
and
Independent Auditors’ Report
SGV & CO
SyCip Gorres Velayo & Co.
6760 Ayala Avenue
1226 Makati City
Philippines
Phone: (632) 891-0307
Fax:
(632) 819-0872
www.sgv.com.ph
BOA/PRC Reg. No. 0001
SEC Accreditation No. 0012-FR-1
INDEPENDENT AUDITORS’ REPORT
The Stockholders and the Board of Directors
ABS-CBN Broadcasting Corporation
Mother Ignacia Street corner Sgt. Esguerra Avenue
Quezon City
We have audited the accompanying financial statements of ABS-CBN Broadcasting Corporation and Subsidiaries, which
comprise the consolidated balance sheets as at December 31, 2006 and 2005, and the consolidated statements of income,
consolidated statements of changes in equity and consolidated statements of cash flows for each of the three years in the
period ended December 31, 2006, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Philippine Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that
are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in
accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of ABS-CBN Broadcasting
Corporation and Subsidiaries as of December 31, 2006 and 2005, and their financial performance and their cash flows for
each of the three years in the period ended December 31, 2006 in accordance with Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Maria Vivian C. Ruiz
Partner
CPA Certificate No. 83687
SEC Accreditation No. 0073-AR-1
Tax Identification No. 102-084-744
PTR No. 0266539, January 2, 2007, Makati City
March 28, 2007
SGV & Co is a member practice of Ernst & Young Global
ABS-CBN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
December 31
2006
2005
(As restated Note 2)
ASSETS
Current Assets
Cash and cash equivalents (Notes 5 and 26)
Trade and other receivables (Notes 6, 14, 24 and 26)
Derivative assets (Note 26)
Program rights - current (Notes 10, 12, 18 and 19)
Other current assets - net (Note 7)
Total Current Assets
P
= 1,661,832
4,382,530
12,438
773,290
1,011,222
7,841,312
P
= 1,751,730
4,651,900
193,305
807,134
790,767
8,194,836
Noncurrent Assets
Long-term receivable from a related party (Notes 8 and 26)
Property and equipment - net (Notes 9, 15 and 24)
Noncurrent program rights and other intangible assets (Notes 10, 12, 18 and 19)
Deferred tax assets (Note 22)
Other noncurrent assets - net (Notes 11, 12 and 26)
Total Noncurrent Assets
2,423,392
9,724,640
1,444,468
301,779
2,165,923
16,060,202
2,357,413
10,287,599
1,519,859
322,426
2,141,712
16,629,009
P
= 23,901,514
P
= 24,823,845
P
= 4,553,915
28,816
357,920
347,879
2,137,139
7,425,669
P
= 4,528,983
28,150
103,912
360,624
1,766,144
6,787,813
2,436,951
64,065
279,816
17,126
2,797,958
4,509,640
61,778
238,535
1,698
4,811,651
779,583
706,047
(158,223)
12,465,094
(177,621)
13,614,880
63,007
13,677,887
779,583
706,047
153,194
11,724,542
(200,000)
13,163,366
61,015
13,224,381
LIABILITIES AND EQUITY
Current Liabilities
Trade and other payables (Notes 13, 14 and 26)
Income tax payable
Derivative liabilities (Note 26)
Obligations for program rights - current (Note 26)
Interest-bearing loans and borrowings - current (Notes 8, 9, 11, 15, 24, 25 and 26)
Total Current Liabilities
Noncurrent Liabilities
Interest-bearing loans and borrowings - net of current portion
(Notes 8, 9, 11, 15, 24, 25 and 26)
Obligations for program rights - net of current portion (Note 26)
Accrued pension obligation (Note 23)
Asset retirement obligation
Total Noncurrent Liabilities
Equity
Capital stock (Note 16)
Capital paid in excess of par value
Cumulative translation adjustments (Notes 11 and 26)
Retained earnings (Note 16)
Philippine depository receipts convertible to common shares (Note 16)
Total Equity Attributable to Equity Holders of Parent Company
Minority Interest
Total Equity
P
= 23,901,514
See accompanying Notes to Consolidated Financial Statements.
P
= 24,823,845
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Amounts)
Years Ended December 31
2004
2005
(As restated (As restated 2006
Note 2)
Note 2)
REVENUES
Airtime revenues (Note 14)
Sale of services (Notes 14 and 24)
License fees (Note 24)
Sale of goods (Note 14)
EXPENSES (INCOME)
Production costs (Notes 14, 18, 23 and 24)
General and administrative (Notes 11, 14, 20, 23 and 24)
Cost of sales and services (Notes 14, 19, 23 and 24)
Agency commission, incentives and co-producers’ share (Note 17)
Finance costs (Notes 15 and 21)
Finance revenue (Notes 8, 14 and 21)
Equity in net losses of associates (Notes 8 and 11)
Foreign exchange loss (gain) - net
Other income (Notes 14, 21, 24 and 26)
INCOME BEFORE INCOME TAX
PROVISION FOR INCOME TAX (Note 22)
NET INCOME
Attributable to:
Equity holders of Parent Company (Note 27)
Minority interest
BASIC/DILUTED EARNINGS PER SHARE (EPS) (Note 27)
P
= 10,662,767
5,076,780
1,116,978
529,108
17,385,633
5,714,518
5,134,682
2,417,127
2,457,824
1,363,383
(543,342)
51,853
(171,681)
(448,707)
15,975,657
P
= 10,333,677
4,248,144
1,619,367
845,888
17,047,076
5,690,784
5,847,218
2,373,606
2,084,747
1,001,990
(332,263)
193,651
47,161
(287,142)
16,619,752
P
= 11,086,442
3,930,321
–
754,569
15,771,332
5,468,148
4,129,996
2,384,522
2,196,662
910,730
(152,897)
47,325
2,347
(227,143)
14,759,690
1,409,976
427,324
1,011,642
667,432
168,852
266,973
P
= 742,544
P
= 258,472
P
= 744,669
P
= 740,552
1,992
P
= 742,544
P
= 251,731
6,741
P
= 258,472
P
= 734,250
10,419
P
= 744,669
P
= 0.962
P
= 0.327
P
= 0.954
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in Thousands Except Per Share Amounts)
Attributed to Equity Holders of Parent Company
Capital
Stock
(Note 16)
At December 31, 2005,
as previously reported
Prior period adjustment (Note 2)
At December 31, 2005, as restated
Cash flow hedges
Translation adjustments during the year
Amortization of initial CTA
Unrealized fair value gain on availablefor-sale investment (Note 11)
Total income and expense for the year
recognized directly in equity
Net income for the year
Issuance of treasury shares (Note 16)
At December 31, 2006
Cumulative Unappropriated
Capital Paid
Translation
Retained
in Excess of
Adjustments
Earnings
Par Value (CTA) (Note 26) (Notes 2 and 16)
Appropriated
Retained
Earnings
Philippine
Depository
Receipts
Convertible to
Common
Shares
(Note 16)
Total
Minority
Interest
Total Equity
P
= 779,583
–
779,583
–
–
–
P
= 706,047
–
706,047
–
–
–
P
= 153,194
–
153,194
(162,281)
(138,913)
(31,328)
P
= 3,477,060
(52,518)
3,424,542
–
–
–
P
= 8,300,000
–
8,300,000
–
–
–
(P
= 200,000)
–
(200,000)
–
–
–
P
= 13,215,884
(52,518)
13,163,366
(162,281)
(138,913)
(31,328)
P
= 61,015
–
61,015
–
–
–
P
= 13,276,899
(52,518)
13,224,381
(162,281)
(138,913)
(31,328)
–
–
21,105
–
–
–
21,105
–
21,105
–
–
–
–
P
= 779,583
–
–
–
–
P
= 706,047
(311,417)
–
(311,417)
–
(P
= 158,223)
–
740,552
740,552
–
P
= 4,165,094
–
–
–
–
P
= 8,300,000
–
–
–
22,379
(P
= 177,621)
(311,417)
740,552
429,135
22,379
P
= 13,614,880
–
1,992
1,992
–
P
= 63,007
(311,417)
742,544
431,127
22,379
P
= 13,677,887
Attributed to Equity Holders of Parent Company
Capital
Stock
(Note 16)
as previously reported
Prior period adjustment (Note 2)
At December 31, 2004, as restated
Effect of adoption of PAS 39 (Note 2)
At January 1, 2005, as restated
Minority interest
Cash flow hedges
Amortization of initial CTA
recognized directly in equity
recognized directly to equity
Cash dividends P
= 0.64 per share in 2004
(Note 16)
Cumulative Unappropriated
Capital Paid
Translation
Retained
in Excess of
Adjustments
Earnings
Par Value (CTA) (Note 26) (Notes 2 and 16)
Appropriated
Retained
Earnings
Philippine
Depository
Receipts
Convertible to
Common
Shares
(Note 16)
Total
Minority
Interest
Total Equity
P
= 779,583
–
779,583
–
779,583
–
–
–
–
P
= 706,047
–
706,047
–
706,047
–
–
–
–
P
= 138,334
–
138,334
117,071
255,405
–
(52,603)
(31,845)
(17,763)
P
= 3,236,377
(16,505)
3,219,872
(47,061)
3,172,811
–
–
–
–
P
= 8,300,000
–
8,300,000
–
8,300,000
–
–
–
–
(P
= 200,000)
–
(200,000)
–
(200,000)
–
–
–
–
P
= 12,960,341
(16,505)
12,943,836
70,010
13,013,846
–
(52,603)
(31,845)
(17,763)
P
= 42,248
–
42,248
–
42,248
12,026
–
–
–
P
= 13,002,589
(16,505)
12,986,084
70,010
13,056,094
12,026
(52,603)
(31,845)
(17,763)
–
–
–
P
= 779,583
–
–
–
P
= 706,047
(102,211)
–
(102,211)
P
= 153,194
–
251,731
251,731
P
= 3,424,542
–
–
–
P
= 8,300,000
–
–
–
(P
= 200,000)
(102,211)
251,731
149,520
P
= 13,163,366
12,026
6,741
18,767
P
= 61,015
(90,185)
258,472
168,287
P
= 13,224,381
P
= 779,583
P
= 706,047
P
= 130,251
P
= 2,984,556
P
= 8,300,000
(P
= 200,000)
P
= 12,700,437
P
= 31,829
P
= 12,732,266
–
–
–
–
–
–
8,083
–
8,083
–
734,250
734,250
–
–
–
–
–
–
8,083
734,250
742,333
–
10,419
10,419
8,083
744,669
752,752
–
P
= 779,583
–
P
= 706,047
–
P
= 138,334
(498,934)
P
= 3,219,872
–
P
= 8,300,000
–
(P
= 200,000)
(498,934)
P
= 12,943,836
–
P
= 42,248
(498,934)
P
= 12,986,084
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
2006
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation (Note 9)
Amortization of:
Program rights and other intangibles (Note 10)
Debt issue costs (Note 21)
Deferred charges (Notes 19 and 20)
Interest expense (Note 21)
Unrealized foreign exchange gain - net
Interest income (Note 21)
Mark-to-market loss (gain) - net (Note 21)
Provisions for:
Doubtful accounts (Note 20)
Retirement expense (Note 23)
Other employee benefits
Decline in value of inventory
Decline in value of marketable securities
Equity in net losses of associates
Curtailment gain (Note 23)
Gain on sale of property and equipment
Operating income before working capital changes
Decrease (increase) in:
Trade and other receivables
Program rights and other intangible assets
Other current assets
Increase (decrease) in:
Trade and other payables
Obligations for program rights
Payment of accrued pension obligation
Cash generated from operations
Income tax paid
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment
Increase (decrease) in:
Other noncurrent assets
Long-term receivables from a related party
Interest received
Proceeds from sale of property and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of:
Long-term debt
Interest and other financial charges
Bank loans
Capital lease
Cash and scrip dividends
Proceeds from:
Bank loans
Long-term debt
Net cash used in financing activities
EFFECTS OF EXCHANGE RATE CHANGES AND TRANSLATION
ADJUSTMENTS ON CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
Years Ended December 31
2004
2005
(As restated (As restated Note 2)
Note 2)
P
= 1,409,976
P
= 427,324
P
= 1,011,642
1,170,365
1,234,729
1,146,303
1,094,167
83,860
26,683
631,816
(199,659)
(161,905)
114,975
957,212
87,046
348,063
683,465
(20,847)
(297,435)
(34,435)
936,177
107,880
92,509
802,850
(940)
(152,897)
–
94,060
75,437
43,750
1,200
–
51,853
–
–
4,436,578
159,520
79,758
136,283
1,200
4,625
193,651
(158,418)
(8,262)
3,793,479
164,045
80,111
73,194
4,002
918
47,325
–
(292)
4,312,827
284,508
(591,196)
(471,591)
(1,198,013)
(662,896)
(261,538)
398,360
(467,561)
(88,824)
(202,298)
(400,220)
(34,156)
3,021,625
(257,417)
2,764,208
971,196
(243,879)
–
2,398,349
(422,116)
1,976,233
281,246
(167,238)
20,652
4,289,462
(431,653)
3,857,809
(491,566)
(639,040)
(808,117)
(33,079)
–
46,483
2,662
(475,500)
(328,528)
–
36,129
25,468
(905,971)
(571,403)
(2,073,849)
41,528
26,771
(3,385,070)
(1,798,223)
(598,900)
(355,398)
(114,597)
–
(481,381)
(713,921)
(111,545)
(74,819)
–
(5,583,565)
(815,695)
(59,832)
(498,934)
473,979
–
(2,393,139)
–
745,749
(635,917)
246,366
5,975,277
(736,383)
14,533
(89,898)
1,751,730
P
= 1,661,832
25,828
460,173
1,291,557
P
= 1,751,730
(25,154)
(288,798)
1,580,355
P
= 1,291,557
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands Unless Otherwise Specified)
1.
CORPORATE INFORMATION
ABS-CBN Broadcasting Corporation (“ABS-CBN” or “Parent Company”) is incorporated in the Philippines. The Parent
Company’s core business is television and radio broadcasting. Its subsidiaries and associates are involved in the
following related businesses: cable and direct-to-home (DTH) television distribution and telecommunication services
overseas, movie production, audio recording and distribution, video/audio post production, and film distribution. Other
activities of the subsidiaries include merchandising, internet and mobile services and publishing.
The Parent Company is 57% owned by Lopez, Inc. (Lopez), a Philippine entity (see Note 14). The registered office
address of the Parent Company is Mother Ignacia Street corner Sgt. Esguerra Avenue, Quezon City.
The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors
(BOD) on March 28, 2007.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial
instruments and available-for-sale investments which are measured at fair value.
The consolidated financial statements are presented in Philippine Peso, which is the Company’s functional and
presentation currency under Philippine Financial Reporting Standards (PFRS) and all values are rounded to the nearest
thousand except when otherwise indicated.
Statement of Compliance
The consolidated financial statements of ABS-CBN Broadcasting Corporation and all its subsidiaries (the Company) have
been prepared in compliance with PFRS. PFRS include standards named PFRS and Philippine Accounting Standards
(PAS), including Interpretations issued by the Financial Reporting Standards Council.
Changes in Accounting Policies
The Company has adopted the following amendments to PFRS and Philippine Interpretation of International Financial
Reporting Interpretations Committee (IFRIC) interpretations during the year. The accounting policies adopted are
consistent with those of the previous financial year except the adoption of the amended standards and interpretation
below.
§
§
§
§
Amendment to PAS 19, “Employee Benefits”
Amendment to PAS 21, “The Effects of Changes in Foreign Exchange Rates”
Amendments to PAS 39, “Financial Instruments: Recognition and Measurement”
Philippine Interpretation IFRIC 4, “Determining Whether an Arrangement Contains a Lease”
The principal effects of these changes, if any, are as follows:
§
Amendment to PAS 19, “Employee Benefits”
Amendment for Actuarial Gains and Losses, Group Plans and Disclosures — As of January 1, 2006, the Company
adopted the amendment of PAS 19. As a result, additional disclosures on the financial statements are made to
provide information about trends in the assets and liabilities in the defined benefit plans and the assumptions
underlying the components of the defined benefit cost. The Company chose not to apply the new option offered to
recognize actuarial gains and losses outside of the consolidated statement of income.
The Company’s financial statement has been restated to adjust the employee benefits recognized and adjusted in
2005 in line with the adoption of PAS 19, “Employee Benefits”. A new interpretation has been issued related to the
implementation of the Standard. The Company revisited its computation which resulted to P
= 16 million (net of tax
amounting to P
= 8 million) adjustment to decrease the 2005 beginning retained earnings and increase “General and
administrative expenses” account in 2005 by P
= 57 million, decrease the “Provision for income tax” account by
P
= 20 million and increase the “Trade and other payables” account by P
= 81 million as of December 31, 2005.
§
Amendment to PAS 21, “The Effects of Changes in Foreign Exchange Rates”
Amendment for Net Investment in Foreign Operation — As of January 1, 2006, the Company adopted the
amendment to PAS 21 which requires that all exchange differences arising from a monetary item that forms part of
the Company’s net investment in a foreign operation are recognized in a separate component of equity in the
consolidated financial statements regardless of the currency in which the monetary item is denominated. This
change has no impact on the consolidated financial statements.
§
Amendments to PAS 39, “Financial Instruments: Recognition and Measurement”
Amendment for Financial Guarantee Contracts (issued August 2005) — This amended the scope of PAS 39 to
require financial guarantee contracts that are not considered as insurance contracts to be recognized initially at fair
value and to be remeasured at the higher of the amount determined in accordance with PAS 37, “Provisions,
Contingent Liabilities and Contingent Assets” and the amount initially recognized less, when appropriate, cumulative
amortization recognized in accordance with PAS 18, “Revenue”. This amendment did not have an effect on the
consolidated financial statements.
Amendment for Cash Flow Hedge Accounting of Forecast Intra-Group Transactions (issued August 2005) — This
amended PAS 39 to permit the foreign currency risk of a highly probable intra-group forecast transaction to qualify as
the hedged item in a cash flow hedge, provided that the transaction is denominated in a currency other than the
functional currency of the entity entering into that transaction and that the foreign currency risk will affect the
consolidated statement of income. As the Company currently has no such transactions, the amendment did not have
an effect on the consolidated financial statements.
Amendment for the Fair Value Option (issued June 2005) — This amended PAS 39 to restrict the use of the option to
designate any financial asset or any financial liability to be measured at fair value through profit or loss. This
amendment has no significant impact on the consolidated financial statements.
§
Philippine Interpretation IFRIC 4, “Determining Whether an Arrangement Contains a Lease”
This interpretation provides guidance in determining whether arrangements contain a lease to which lease accounting
must be applied. The adoption of the interpretation has no significant impact on the consolidated financial
statements.
The following Philippine Interpretations are effective for annual periods beginning on or after January 1, 2006 but are not
relevant to the Company:
§
Philippine Interpretation IFRIC 5, “Rights to Interests Arising from Decommissioning Restoration and Environmental
Rehabilitation of Funds”
§
Philippine Interpretation IFRIC 6, “Liabilities Arising from Participating in a Specific Market - Waste Electrical and
Electronic Equipment”
Standards and Interpretations Not Yet Effective
The Company did not opt for the early adoption of the following PFRS and Philippine Interpretations that have been
approved but are not yet effective:
§
PFRS 7, “Financial Instruments: Disclosures,” and the complementary amendment to PAS 1, “Presentation of
Financial Statements: Capital Disclosures” (effective for annual periods beginning on or after January 1, 2007)
PFRS 7 introduces new disclosures to improve the information about the financial instruments. It requires the
disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments,
including specified minimum disclosures about credit risk, liquidity risk and market risk, as well as sensitivity analysis
to market risk. It replaces PAS 30, “Disclosures in the Financial Statements of Banks and Similar Financial
Institutions,” and the disclosure requirements in PAS 32, “Financial Instruments: Disclosure and Presentation.” It is
applicable to all entities that report under PFRS. The Company is currently assessing the impact of PFRS 7 and the
amendment to PAS 1 and expects that the main additional disclosures will be the sensitivity analysis to market risk
and capital disclosures required by PFRS 7 and the amendment to PAS 1. The Company will apply PFRS 7 and
amendment to PAS 1 in 2007.
§
PFRS 8, “Operating Segments” (effective for annual periods beginning on or after January 1, 2009)
This PFRS adopts a management approach to reporting segment information. The information reported would be
that which management uses internally for evaluating the performance of operating segments and allocating
resources to those segments. Such information may be different from that reported in the balance sheet and
statement of income and companies will need to provide explanations and reconciliations of the differences.
PFRS 8 will replace PAS 14, “Segment Reporting.” The Company is currently assessing the impact of this standard
to its current manner of reporting segment information.
§
Philippine Interpretation IFRIC 7, “Applying the Restatement Approach under PAS 29, Financial Reporting in
Hyperinflationary Economies” (effective for annual periods beginning on or after March 1, 2006)
This interpretation provides guidance on how to apply PAS 29 when an economy first becomes hyperinflationary, in
particular the accounting for deferred income tax. The interpretation will have no impact on the consolidated financial
statements.
§
Philippine Interpretation IFRIC 8, “Scope of PFRS 2” (effective for annual periods beginning on or after May 1, 2006)
This interpretation requires PFRS 2, “Group and Treasury Share Transactions,” to be applied to any arrangements
where equity instruments are issued for consideration which appears to be less than fair value. The Company
expects that the interpretation will have no material impact on the consolidated financial statements.
§
Philippine Interpretation IFRIC 9, “Reassessment of Embedded Derivatives” (effective for annual periods beginning
on or after June 1, 2006)
This interpretation prohibits subsequent reassessment of embedded derivatives unless there is a change in the terms
of the contract that significantly modifies the cash flows that otherwise would be required under the contract, in which
case, reassessment is required. An entity determines whether a modification to cash flows is significant by
considering the extent to which the expected future cash flows associated with the embedded derivatives, the host
contract or both have changed and whether the change is significant relative to previously expected cash flows on the
contract. This interpretation will have no significant impact on the consolidated financial statements.
§
Philippine Interpretation IFRIC 10, “Interim Financial Reporting and Impairment” (effective for annual periods
beginning on or after November 1, 2006)
This interpretation prohibits the reversal of impairment loss on goodwill and available-for-sale equity investments
recognized in the interim financial reports even if impairment is no longer present at the annual balance sheet date.
This interpretation will have no significant impact on the consolidated financial statements.
§
Philippine Interpretation IFRIC 11, PFRS 2, “Group and Treasury Share Transactions” (effective for annual periods
beginning on or after March 1, 2007)
This interpretation requires arrangements whereby an employee is granted rights to an entity’s equity instruments to
be accounted for as an equity-settled scheme by the entity even if (a) the entity chooses or is required to buy those
equity instruments (e.g., treasury shares) from another party, or (b) the shareholder(s) of the entity provide the equity
instruments needed. It also provides guidance on how subsidiaries, in their separate financial statements, account
for such schemes when their employees receive rights to the equity instruments of the parent. Currently, the
Company does not have any stock option plan and therefore, does not expect this interpretation to have significant
impact on the consolidated financial statements.
§
Philippine Interpretation IFRIC 12, “Service Concession Arrangements” (effective for annual periods beginning on or
after January 1, 2008)
This interpretation covers contractual arrangements arising from entities providing public services and is not relevant
to the Company’s current operations.
Basis of Consolidation
The consolidated financial statements comprise the financial statements of ABS-CBN Broadcasting Corporation and its
subsidiaries as at December 31 each year (see Note 14). The financial statements of the subsidiaries are prepared for
the same reporting year as the parent company, using consistent accounting policies.
All intra-company balances, transactions, income and expenses and profits and losses resulting from intra-company
transactions that are recognized in assets, are eliminated in full.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and
continue to be consolidated until the date that such control ceases.
Minority Interests
Minority interests represent the portion of profit or loss and net assets not held by the Company and are presented
separately in the statements of income and within the equity in the consolidated balance sheets separately from parent
shareholders’ equity.
Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of
exchange ruling at the balance sheet date. All differences are taken to the consolidated statement of income with the
exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These are taken directly to equity until the disposal of the net investment, at which time they are recognized in the
statement of income. Tax charges and credits attributable to exchange differences on those borrowings are also dealt
with in equity. 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. 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.
The functional currencies of the foreign subsidiaries are as follows:
Subsidiary
ABS-CBN International
ABS-CBN Australia Pty. Ltd. (ABS-CBN Australia)
ABS-CBN Middle East FZ-LLC (ABS-CBN Middle East)
ABS-CBN Europe Ltd. (ABS-CBN Europe)
Functional Currency
United States Dollar
Australian Dollar
Great Britain Pound
As at the reporting date, the balance sheets of these subsidiaries are translated into the presentation currency of the
Company (the Philippine Peso) at the rate of exchange ruling at the balance sheet date and, their statement of income are
translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are
taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount
recognized in equity relating to that particular foreign operation is recognized in the consolidated statement of income.
Financial Instruments
The Company made use of exemption provided by PFRS 1. As allowed by the Securities and Exchange Commission
(SEC), the effect of adopting PAS 39 did not result in a restatement of prior period’s consolidated financial statements.
The cumulative effect of adopting this standard was credited to the January 1, 2005 retained earnings.
Adoption of this Standard has increased (decreased) the following accounts at January 1, 2005:
Other noncurrent assets
Interest-bearing loans and borrowings - net of current portion
Derivative assets
CTA
Trade and other receivables
Deferred tax assets
Program rights and other intangibles
Retained earnings
Notes
a
a
b
b
c
d
b
d
Increase
(Decrease)
(P
= 255,261)
(249,949)
125,575
117,071
(59,588)
(17,170)
14,545
(22,838)
(458)
(47,061)
a.
Implementation of the effective interest method resulted to a decrease of P
= 5 million in January 1, 2005 retained
earnings; unamortized debt issued costs were reclassified from other noncurrent assets and presented as deduction
from long-term debt.
b.
The Company recognized the fair value of its derivatives (freestanding and embedded) as of January 1, 2005. The
fair value of freestanding derivatives which qualified for hedge accounting under previous Generally Accepted
Accounting Principles was reported in CTA. Embedded derivatives were bifurcated from program rights and license
agreements.
c.
The Company tested its trade and other receivable for impairment on January 1, 2005 resulting to additional
impairment losses.
d.
The Company discounted its long-term noninterest-bearing payables to comply with PAS 39’s requirement to record
all financial instruments at fair value upon initial recognition. Subsequently, these were carried at amortized costs.
The policies on financial instruments effective January 1, 2005 follow:
Financial Assets and Financial Liabilities
Date of Recognition. Purchases or sale of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace are recognized on the settlement date. Derivatives are recognized on
trade date basis (i.e. the date that the Company commits to purchase or sell the asset).
Initial Recognition of Financial Instruments. Financial assets and financial liabilities are recognized initially at fair value.
Transaction costs are included in the initial measurement of all financial assets and liabilities, except for financial
instruments which are measured at fair value through profit and loss.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to a financial instrument or a component that is a financial
liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are
charged directly to equity net of any related income tax benefits. Financial instruments are offset when there is a legally
enforceable right to offset and intention to settle either on a net basis or to realize the asset and settle the liability
simultaneously.
Financial assets are further classified into the following categories: (a) financial asset at fair value through profit or loss;
(b) loans and receivables; (c) held-to-maturity investments; and (d) available-for-sale financial assets. Financial liabilities,
on the other hand, are classified into: (a) financial liabilities at fair value through profit or loss; and (b) other liabilities at
amortized cost. The Company determines the classification at initial recognition and where allowed and appropriate, reevaluates this designation at every reporting date.
a.
Financial Assets or Financial Liabilities at Fair Value through Profit or Loss
Financial assets and financial liabilities at fair value through profit or loss include financial assets and liabilities held
for trading purposes, financial assets and financial liabilities designated upon initial recognition as at fair value
through profit or loss, and derivative instruments.
Financial assets and financial liabilities are classified as held for trading if they are acquired for the purpose of selling
and repurchasing in the near term. Included in this classification are debt and equity securities which have been
acquired principally for trading purposes.
Financial assets and financial liabilities may be designated at initial recognition as at fair value through profit or loss if
the following criteria are met:
§
the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from
measuring the assets or liabilities or recognizing gains or losses on them on a different basis;
§
the assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed and
their performance evaluated on a fair value basis, in accordance with a documented risk management or
investment strategy; or
§
the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly
modify the cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
The Company’s derivative instruments (including embedded derivatives) that are not accounted for as accounting
hedges are classified under this category.
b.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are not entered into with the intention of immediate or short-term resale, are not classified as
financial assets at fair value through profit or loss, designated as available-for-sale financial assets or held-to-maturity
investments.
After initial measurement, loans and receivables are subsequently measured at amortized cost using the effective
interest method less allowance for impairment. Amortized cost is calculated by taking into account any discount or
premium on acquisition and fees and costs that are an integral part of the effective interest rate. The amortization is
included in the interest income in the consolidated statement of income. The losses arising from impairment are
recognized in provision for doubtful accounts in the consolidated statement of income.
This category includes the Company’s trade, intercompany and other receivables.
c.
Held-to-Maturity Investments
Quoted nonderivative financial assets with fixed or determinable payments and fixed maturities are classified as heldto-maturity when the Company has the positive intention and ability to hold to maturity. Investments intended to be
held for an undefined period are not included in this classification. Other long-term investments that are intended to
be held-to-maturity, such as bonds, are subsequently measured at amortized cost. This cost is computed as the
amount initially recognized minus principal repayments, plus or minus the cumulative amortization using the effective
interest method of any difference between the initially recognized amount and the maturity amount. This calculation
includes all fees and points paid or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums and discounts. For investments carried at amortized cost,
gains and losses are recognized in the consolidated statement of income when the investments are derecognized or
impaired, as well as through the amortization process.
The Company has no held-to-maturity investments as of December 31, 2006 and 2005.
d.
Available-for-Sale Financial Assets
Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale
or are not classified in any of the three preceding categories. They are purchased and held indefinitely and may be
sold in response to liquidity requirements or changes in market conditions.
After initial recognition, available-for-sale financial assets are measured at fair value. The effective yield component
of debt securities classified as available-for-sale financial assets, as well as the impact of restatement on foreign
currency-denominated debt securities classified as available-for-sale, is reported in the consolidated statement of
income. The unrealized gains and losses arising from the fair valuation of available-for-sale financial assets are
excluded, net of applicable tax, from the consolidated statement of income and are reported as cumulative translation
adjustments in the equity section of the consolidated balance sheet and in the consolidated statement of changes in
equity.
The Company’s available-for-sale financial assets include investments in ordinary common shares and debt
instruments.
Other Financial Liabilities at Amortized Cost
This classification includes loans and borrowings which are initially recognized at fair value of the consideration received
less directly attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the
effective interest method.
Gains or losses are recognized in income or loss when the liabilities are derecognized as well as through the amortization
process.
Derivative Financial Instruments and Hedging
The Company uses derivative financial instruments such as interest rate swaps and cross currency swaps to hedge its
risks associated with interest rate and foreign currency fluctuations. Such derivative financial instruments are initially
recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair
value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
Any gains or losses arising from changes in fair value on derivatives that do not qualify for hedge accounting are taken
directly to the consolidated statement of income.
For the purpose of hedge accounting, hedges are classified as:
§
fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability;
§
cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk
associated with a recognized asset or liability or a forecast transaction; or
§
hedges of a net investment in a foreign operation.
A hedge of the foreign currency risk of a firm commitment is accounted for as a cash flow hedge.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which
the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the
hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of
the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to
changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be
highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to
determine that they actually have been highly effective throughout the financial reporting periods for which they were
designated.
Hedges which meet the strict criteria for hedge accounting are accounted for as follows:
Fair Value Hedges. Fair value hedges are hedges of the Company’s exposure to changes in the fair value of a recognized
asset or liability or an unrecognized firm commitment, or an identified portion of such an asset, liability or firm
commitment, that is attributable to a particular risk and could affect profit or loss. For fair value hedges, the carrying
amount of the hedged item is adjusted for gains and losses attributable to the risk being hedged, the derivative is
remeasured at fair value and gains and losses from both are taken to the consolidated statement of income.
The Company has no derivatives that are designated or accounted for fair value hedges as of December 31, 2006 and
2005.
Cash Flow Hedges. Cash flow hedges are hedges of the exposures to variability in cash flows that are attributable to a
particular risk associated with a recognized asset or liability or a highly probable forecast transaction and could affect the
consolidated statement of income. Changes in the fair value of a hedging instrument that qualifies as a highly effective
cash flow hedge are recognized directly in equity, while any hedge ineffectiveness is recognized immediately in the
consolidated statement of income.
Amounts taken to equity are transferred to the consolidated statement of income when the hedged transaction affects
profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale or
purchase occurs. Where the hedged item is the cost of a non-financial asset or liability, the amounts taken to equity are
transferred to the initial carrying amount of the non-financial asset or liability.
If the forecast transaction is no longer expected to occur, amounts previously recognized in equity are transferred to the
consolidated statement of income. If the hedging instrument expires or is sold, terminated or exercised without
replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognized in equity remain in
equity until the forecast transaction occurs. If the related transaction is not expected to occur, the amount is taken to the
In October 2005, the Company designated its outstanding interest rates and cross currency swaps as cash flow hedges.
Hedges of a Net Investment. Hedges of a net investment in a foreign operation, including a hedge of a monetary item that
is accounted for as part of the net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on
the hedging instrument relating to the effective portion of the hedge are recognized directly in equity while any gains or
losses relating to the ineffective portion are recognized in the consolidated statement of income. On disposal of the
foreign operation, the cumulative value of any such gains or losses recognized directly in equity is transferred to the
The Company has no hedges of a net investment in 2006 and 2005.
Impairment of Financial Assets
The Company assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.
Assets Carried at Amortized Cost. If there is objective evidence that an impairment loss on loans and receivables carried at
amortized cost has been incurred, 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 (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial
recognition). The carrying amount of the asset shall be reduced either directly or through use of an allowance account.
The amount of the loss shall be recognized in the consolidated statement of income.
The Company first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant, and individually or collectively for financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant
or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial
assets is collectively assessed for impairment. 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.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any
subsequent reversal of an impairment loss is recognized in the consolidated statement of income, to the extent that the
carrying value of the asset does not exceed its amortized cost at the reversal date.
Assets Carried at Cost. If there is 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, or on a derivative asset that is linked to and must
be settled by delivery of such an unquoted equity instrument has been incurred, 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.
Available-for-Sale Financial Assets.
If an available-for-sale asset is impaired, an amount comprising the difference
between its cost (net of any principal payment and amortization) and its current fair value, less any impairment loss
previously recognized in the consolidated statement of income, is transferred from equity to the consolidated statement of
income. Reversals in respect of equity instruments classified as available-for-sale are not recognized in the consolidated
statement of income. Reversals of impairment losses, if any, on debt instruments are reversed through the consolidated
statement of income, if the increase in fair value of the instrument can be objectively related to an event occurring after
the impairment loss was recognized in the consolidated statements of income.
Derecognition of Financial Assets and Liabilities
Financial Assets. A financial asset (or, where applicable 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;
§
the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full
without material delay to a third party under a ‘pass-through’ arrangement; or
§
the Company has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset.
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 asset is recognized to the
extent of the Company’s continuing involvement in the asset. 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.
Financial Liability. A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is
recognized in the consolidated statement of income.
Determination of Fair Value. The fair value of financial instruments traded in organized financial markets is determined by
reference to quoted market bid prices that are active at the close of business at the balance sheet date. When current bid
and asking prices are not available, 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.
For all other financial instruments not listed in an active market, the fair value is determined using valuation techniques.
Such techniques include using reference to similar instruments for which observable prices exist, discounted cash flows
analyses, and other relevant valuation models.
Financial Instruments (Prior to 2005)
The Company enters into long-term foreign currency swap agreements to manage its foreign currency exposures relating
to certain long-term foreign currency-denominated loans. Translation gains or losses on foreign currency swaps entered
into as hedges are computed by multiplying the swap notional amounts by the difference between the spot exchange rate
prevailing on balance sheet date and the spot exchange rate on the contract inception date (or the last reporting date).
The resulting translation gains or losses are offset against the translation losses or gains on the underlying foreign
currency-denominated liabilities.
The Company also enters into interest rates swaps to manage its interest rate exposures on underlying floating-rate
loans. Swap costs accruing on foreign currency swaps and interest rate swaps that are currently due to or from the swap
counterparties are charged to current operations. Mark-to-market values of the foreign currency swaps are not included in
the determination of net income but are disclosed in the relevant note to these consolidated financial statements.
Cash and Cash Equivalents
Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash with original maturities of three months or less and that are subject to an
insignificant risk of change in value.
Inventories
Inventories included under “Other current assets - net” account in the consolidated balance sheet are valued at the lower
of cost or net realizable value. Cost is determined on the weighted average method. Net realizable value of inventories
that are for sale is the selling price in the ordinary course of business, less the cost of marketing and distribution. Net
realizable value of inventories not held for sale is the current replacement cost. Unrealizable inventories are written off.
Property and Equipment
Property and equipment, except land, are carried at cost (including capitalized interest), excluding the costs of day-to-day
servicing, less accumulated depreciation and amortization and accumulated impairment in value. Such cost includes the
cost of replacing part of such property and equipment when that cost is incurred if the recognition criteria are met. Land is
stated at cost less any impairment in value. Depreciation is computed on a straight line method over the property and
equipment’s useful lives.
The carrying values of property and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. 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.
The property and equipment’s residual values, useful lives and methods are reviewed, and adjusted if appropriate, at
each financial year-end.
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. Construction in progress is not depreciated until such time that
the relevant assets are completed and put into operational use.
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.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in
a business combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangible
assets are assessed to be either finite or indefinite. 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.
The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at
each financial year-end. 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, as appropriate, and
treated as changes in accounting estimates. The amortization expense 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.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating
unit level. Such intangibles are not amortized. The useful life of an intangible asset with an indefinite life is reviewed
annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life
assessment from finite to indefinite is made on a prospective basis.
A summary of the policies applied to the Company’s acquired intangible assets is as follows:
Intangible Asset
Useful Lives
Impairment
Testing/
Recoverable
Amount Testing
Amortization
Method Used
Current and
Noncurrent
Portion
Program rights
Finite (license term or Amortized on the basis
economic life whichever of program usage except
is shorter)
for Creative Programs,
Inc. (CPI) which is
amortized on a straightline method over the
lease term.
To the extent that a
given future expected
benefit period is shorter
than the initial Company
estimates, the Company
writes off the purchase
price or the license fee
sooner than anticipated.
Cable Channels - CPI
Indefinite
No amortization.
Annually
and
more Not applicable.
frequently
when
an
indication of impairment
exists.
Production and
Distribution Business Middle East
Finite- 25 years
Amortized
over
period of 25 years.
Movie in-process
Finite
Individual-film-forecast
computation method.
the To the extent that a Not applicable.
writes off the cost sooner
than anticipated.
Video rights and Record Finite (six months or Amortized on the basis
master
10,000 copies sold of of number of copies sold.
video discs and tapes,
whichever comes first)
Story, music and
publication rights
Based on the estimated
year of usage except CPI
which is based on
license term.
To the extent that the fair Based on the estimated
value of the film is less year of usage.
than its unamortized film
costs and writes off the
amount by which the
unamortized capitalized
costs exceeds the film’s
fair value.
To the extent that a Not applicable.
writes off the purchase
price or the license fee
sooner than anticipated.
Finite (useful economic Amortized on the basis To the extent that a Based on the estimated
benefit)
of the useful economic given future expected year of usage.
life.
writes off the cost sooner
than anticipated
Investment in an Associate
The Company’s investment in an associate is accounted for under the equity method of accounting. An associate is an
entity in which the Company has significant influence and which is neither a subsidiary nor a joint venture.
Sky Vision Corporation (Sky Vision) was considered as an associate although the Company’s equity interest is only
10.2% (see Note 8), as the Company exercise significant influence over Sky Vision with the combination of the
Company’s interest with that of Lopez (the ultimate parent company) and Benpres Holdings Corporation (a co-subsidiary)
(collectively, the Lopez Group). The combined Lopez Group interest represents controlling interest in Sky Vision and
results in Sky Vision being consolidated in Lopez, the ultimate parent. In addition, the Company has a significant longterm receivable from Sky Vision which is convertible into Sky Vision shares upon determination of the conversion price.
Upon conversion, the Company will gain control over Sky Vision (see Note 8).
Under the equity method, the investment in an associate is carried in the balance sheets at cost plus post-acquisition
changes in the Company’s share of net assets of the associate. Goodwill relating to an associate is included in the
carrying amount of the investment and is not amortized. After application of the equity method, the Company determines
whether it is necessary to recognize any additional impairment loss with respect to the Company’s net investment in the
associate. The consolidated statement of income reflects the share of the results of operations of the associate. Where
there has been a change recognized directly in the equity of the associate, the Company recognizes its share of any
changes and discloses this, when applicable, in the consolidated statement of changes in equity. The reporting dates of
the associate 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.
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business
combination over the Company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed
for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be
impaired.
Tax Credits
Tax credits from government airtime sales availed under Presidential Decree No. 1362 are recognized in the books upon
actual airing of government commercials and advertisements. This is included under “Other noncurrent assets - net”
account in the consolidated balance sheet.
Deferred Charges
Gain or loss on sale of decoders which has no stand alone value without the subscription revenues 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 - net” account in the consolidated balance sheets. As explained in Note 24,
the Parent Company and ABS-CBN International entered into an agreement with DirecTV, Inc. (DirecTV) whereby directto-home (DTH) subscribers of ABS-CBN International are expected to migrate to DirecTV in 2006. ABS-CBN
International will continue to service its subscribers until February 28, 2006. Accordingly, the deferred charges related to
the DTH subscribers of ABS-CBN International are written off as of December 31, 2005, since management is of the
opinion that the corresponding future benefits from these assets, if any, are not material.
Impairment of Nonfinancial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the
asset’s recoverable amount. 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, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, 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. Impairment
losses are recognized in the consolidated statement of income in those expense categories consistent with the function of
the impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment
losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. 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. If that is the case the carrying amount of the
asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal
is recognized in the consolidated statement of income unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to
allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
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.
Airtime revenue is recognized as income on the dates the advertisements are aired. The fair values of barter transactions
are included in airtime revenue and the related accounts. These transactions represent advertising time exchanged for
program materials, merchandise or service.
Sale of services include:
a.
Subscription fees which are recognized as follows:
DTH Subscribers and Cable Operators. Subscription fees are recognized under the accrual basis in accordance with
the terms of the agreements.
Share in Direct TV, Inc. (DirecTV) Subscription Revenue.
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 24.
Subscription revenue from ABS-CBN Now. Subscription revenue from online streaming services of Filipino-oriented
content and programming are received in advance (included under “Trade and other payables” account) and are
deferred and recognized as revenue over the period during which the service is performed.
b.
Telecommunications revenue which is recognized when earned. These are stated net of the share of the other
telecommunications carriers, if any, under existing correspondence and interconnection agreements. Interconnection
fees and charges are based on agreed rates with the other telecommunications carriers.
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 balance sheet date, is presented as “Other current liabilities” under “Trade and other payables”
account in the consolidated balance sheets.
c.
Channel lease revenue which is recognized as income on a straight-line basis over the lease term.
d.
Income from film exhibition which 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.
License fees earned from DirecTV is recognized upon migration of the DTH subscribers of ABS-CBN International to
DirecTV. The additional license fees for each migrated subscriber that will remain for 14 consecutive months from the
date of activation, will be recognized on the 14th month (see Note 24).
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 related to the sale and installation of decoders of ABS-CBN Australia (included under “Sale of goods” account in
the consolidated statement of income) which has no stand alone value without the subscription revenues are aggregated
and recognized ratably over the longer of subscription contract term or the estimated customer service life.
Short-messaging-system/text-based revenues, sale of news materials and Company-produced programs included under
“Sale of services” account in the consolidated statement of income are recognized upon delivery.
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.
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. A reassessment is made after inception of the lease only if one of the
following applies:
a.
there is a change in contractual terms, other than a renewal or extension of the agreement;
b.
a renewal option is exercised or extension granted, unless the term of the renewal or extension was initially included
in the lease term;
c.
there is a change in the determination of whether the fulfillment is dependent on a specified asset; or
d.
there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the change in
circumstances gave rise to the reassessment for scenarios a, c or d and the date of renewal or extension period for
scenario b.
For arrangements entered prior to January 1, 2005, the date of inception is deemed to be January 1, 2005 in accordance
with the transitional requirements of Philippine Interpretation IFRIC 4.
Company as 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 an expense in the consolidated statement of income on a straight-line basis over the lease
term.
Company as 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.
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 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 are generally expensed as incurred. Borrowing costs are capitalized if they are directly attributable to the
acquisition, construction or production of a qualifying asset. Capitalization of borrowing costs commences when the
activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred and ceases when
the assets are ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount,
an impairment loss is recorded. Borrowing costs include interest charges and other costs incurred in connection with the
borrowing of funds.
Pension Costs
The Company has a funded 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 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 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 plan.
Income 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 taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the balance sheet date.
Deferred Tax. Deferred income tax is provided, using the balance sheet liability method, on all temporary differences at
the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, including asset revaluations. Deferred
income tax assets are recognized for all deductible temporary differences, carryforward benefits of unused tax credits
from excess minimum corporate income tax (MCIT) and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences and carryforward benefits of unused tax credits
and unused tax losses can be utilized. Deferred income tax, however, 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, at the time of the transaction,
affects neither the accounting profit nor taxable profit.
Deferred income tax liabilities are not provided on non-taxable temporary differences associated with investments in
domestic subsidiaries and associates. With respect to investments in other subsidiaries and associates, 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.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to
be utilized. Unrecognized deferred tax assets are measured at each balance sheet date and are recognized to the extent
that it has become probable that future taxable profit will allow the deferred tax to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Income tax relating to items recognized directly in equity is recognized in equity and not in the statement of income.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
EPS
Basic EPS amounts are calculated by dividing the net income attributed to equity holders of the Parent Company for the
period attributable to common shareholders by the weighted average number of common shares outstanding during the
period. The Company has no dilutive potential common shares outstanding that would require disclosure of diluted
earnings per share in the consolidated statement of income.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. They are disclosed unless the possibility
of an outflow of resources embodying economic benefits is remote. A contingent asset is not recognized in the
consolidated financial statements but disclosed when an inflow of economic benefits is probable.
Subsequent Events
Post-year-end events that provide additional information about the Company’s financial position at the balance sheet date
(adjusting events) are reflected in the consolidated financial statements. Post-year-end events that are not adjusting
events are disclosed in the notes to the consolidated financial statements when material.
3.
MANAGEMENT’S USE OF JUDGMENT AND ESTIMATES
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. Future events may
occur which will cause the judgments and assumptions used in arriving at the estimates to change. The effects of any
change in judgments and estimates are reflected in the consolidated financial statements as they become reasonably
determinable.
Judgments and estimates are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Judgments
In the process of applying the Company’s accounting policies, management has made the following judgments, apart from
those involving estimations, which have the most significant effect on the amounts recognized in the consolidated financial
statements.
Leases. The evaluation whether an arrangement contains a lease is based on its substance. An arrangement is, 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.
The Company has entered into operating lease arrangements as a lessor and as a lessee. The Company, as a lessee, has
determined that the lessor retains substantial risks and rewards of ownership of these properties which are on operating lease
agreements. As a lessor, the Company retains substantially all the risks and benefits of ownership of the assets.
The Company has also entered into finance lease agreements covering certain property and equipment. The Company has
determined that it bears substantially all the risks and benefits incidental to ownership of said properties which are on finance
lease agreements.
The carrying amount of property and equipment under finance lease amounted to P
=175 million and P
=177 million as of
December 31, 2006 and 2005, respectively (see Note 9).
Determination of Functional Currency. Below are the functional currencies of the foreign subsidiaries based on the economic
substance of the underlying circumstance relevant to the Company:
Subsidiary
ABS-CBN Australia
ABS-CBN Middle East
ABS-CBN Europe
Functional Currency
Australian Dollar
Great Britain Pound
The functional currency of the foreign subsidiaries is the currency of the primary economic environment in which it operates. It
is the currency that mainly influences the revenue from and cost of rendering services.
Fair Value of Financial Instruments. PFRS requires that certain financial assets and liabilities (including derivative instruments)
be carried at fair value, which requires the use of accounting estimates and judgment. While significant components of fair
value measurement are determined using verifiable objective evidence (i.e. foreign exchange rates, interest rates, volatility
rates), the timing and amount of changes in fair value would differ using a different valuation methodology. Any change in the
fair values of financial assets and liabilities (including derivative instruments) directly affect the consolidated statement of
income and equity.
The fair value of financial assets and liabilities are set out in Note 26.
Financial Assets not Quoted in an Active Market. The Company classifies financial assets by evaluating, among others, whether
the asset is quoted or not in an active market. 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, and whether those prices represent
actual and regularly occurring market transactions on an arm’s length basis.
Estimates
The key assumptions concerning future and other key sources of estimation at the balance sheet 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.
Allowance for Doubtful Accounts. The Company maintains an allowance for doubtful accounts at a level considered adequate
to provide for potentially uncollectible receivables. The level of allowance is evaluated by management based on experience
and other factors that may affect the recoverability of these assets. If there is an objective evidence that an impairment loss on
trade and other receivables carried at amortized cost has been incurred, 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 (excluding future credit losses that
have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset
shall be reduced either directly or through use of an allowance account. The allowance is established by charges to income in
the form of provision for doubtful accounts. The amount and timing of recorded expenses for any period would therefore differ
based on the judgments or estimates made. An increase in provision for doubtful accounts would increase the Company’s
recorded expenses and decrease current assets.
Provision for doubtful accounts amounted to P
= 94 million in 2006, P
= 160 million in 2005 and P
= 164 million in 2004
(see Note 20). Trade and other receivables, net of allowance for doubtful accounts, amounted to P
= 4,383 million and
P
= 4,652 million as of December 31, 2006 and 2005, respectively (see Note 6). Allowance for doubtful accounts as of
December 31, 2006 and 2005 amounted to P
= 551 million and P
= 599 million, respectively (see Note 6).
Net Realizable Value of Inventories.
Inventories are carried at net realizable value whenever net realizable value of
inventories becomes lower than cost due to damage, physical deterioration, obsolescence, changes in price levels or
other causes. The allowance account is reviewed on a regular basis to reflect the accurate valuation in the financial
records. Inventory items identified to be obsolete and unusable are written off and charged as expense in the period such
losses are identified.
Inventories at net realizable value, amounted to P
= 207 million and P
= 139 million as of December 31, 2006 and 2005,
respectively (see Note 7).
Estimated Useful Lives. The useful life of each of the Company’s property and equipment and intangible assets with definite life
is estimated based on the period over which the asset is expected to be available for use. Estimation for property and
equipment is based on a collective assessment of industry practice, internal technical evaluation and experience with similar
assets while for intangible assets with definite life, estimated life is based on the life of agreement covering such intangibles.
The estimated useful life of each asset is reviewed periodically and updated if expectations differ from previous estimates due
to physical wear and tear or other limits on the use of the asset. It is possible, however, that future results of operations could
be materially affected by changes in the amounts and timing of recorded expenses brought about by changes in the factors
mentioned above. A reduction in the estimated useful life of any property and equipment or intangible assets would increase
the recorded expenses and decrease noncurrent assets.
The carrying values of property and equipment and intangible assets with definite life are as follows (see Notes 9 and 10):
Property and equipment - net
Program rights
Production and distribution business - Middle East
Movie in-process
Story, music and publication rights
Video rights and record master
2006
P
= 9,724,640
1,536,958
124,684
83,561
4,787
7,800
2005
P
= 10,287,599
1,629,849
141,759
79,461
4,561
11,395
Impairment of Available-for-sale Equity Investments. The Company treats available-for-sale equity investments as impaired
when there has been a significant or prolonged decline in the fair value below its cost or where there are objective evidence of
impairment exists. The determination of what is ‘significant’ or ‘prolonged’ requires judgment. The Company treats ‘significant’
generally as 20% or more of the original cost of investment, and ‘prolonged’ as greater than 6 months. In addition, the
Company evaluates other factors, including normal volatility in share price for quoted equities and the future cash flows and
discount factors for unquoted equities.
As of December 31, 2006 and 2005, available-for-sale investments are carried at P
=68 million and P
=47 million, respectively
(see Note 11).
Asset Retirement Obligation.
Determining asset retirement obligation requires estimation of the costs of dismantling
installations and restoring leased properties to their original condition. While it is believed that the assumptions used in the
estimation of such costs are reasonable, significant changes in these assumptions may materially affect the recorded expense
or obligation in future periods.
Asset retirement obligation amounted to P
=17 million and P
=2 million as of December 31, 2006 and 2005, respectively.
Recognition of Deferred Tax Assets. The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax assets to be utilized. However, there is no assurance that sufficient taxable profit will be generated to allow all or part of the
deferred tax assets to be utilized.
Unrecognized deferred tax assets as of December 31, 2006 and 2005 amounted to P
= 193 million and P
= 124 million,
respectively. Net recognized deferred tax assets as of December 31, 2006 and 2005 amounted to P
= 302 million and
P
Present Value of Pension Obligation. The cost of defined benefit obligation is determined using actuarial valuations. The
actuarial valuation involves making assumptions about discount rates, expected rates of return on assts, future salary
increases, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are
subject to uncertainty.
The expected rate of return on plan assets was based on average historical premium on plan assets. The assumed
discount rates were determined using the market yields on Philippine bonds with terms consistent with the expected
employee benefit payout as of statements of income dates (see Note 23).
As of December 31, 2006 and 2005, the present value of the pension obligation of the Company amounted to
P
= 845 million and P
As of December 31, 2006 and 2005, unrecognized net actuarial gain (loss) amounted to (P
= 390 million) and P
= 34 million,
respectively (see Note 23).
Impairment of Non-financial Assets.
The Company assesses impairment on assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the group considers
important which could trigger an impairment review include the following:
§
§
§
significant underperformance relative to expected historical or projected future operating results;
significant changes in the manner of use of the acquired assets or the strategy for overall business; and
significant negative industry or economic trends.
The Company recognizes an impairment loss whenever the carrying amount of an asset exceeds it recoverable amount. The
recoverable amount is computed using the value in use approach. Recoverable amounts are estimated for individual assets
or, if it is not possible, for the cash-generating unit to which the asset belongs.
Noncurrent assets that are subjected to impairment testing when impairment indicators are present and annually for those
intangibles with indefinite useful lives are as follows:
Program rights
Cable channels - CPI
Production and distribution business - Middle East
Long-term receivables from a related party
Property and equipment - net
Tax credits
No impairment loss for noncurrent assets was recognized in 2006 and 2005.
2006
P
= 854,112
459,968
124,684
2,423,392
9,724,640
1,741,030
2005
P
= 914,831
459,968
141,759
2,357,413
10,287,599
1,767,484
Impairment of Goodwill. The Parent Company’s management conducts an annual review for any impairment in value of the
goodwill. The impairment on the goodwill is determined by comparing: (a) the carrying value of goodwill; 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. Refer to Note 12 for the key assumptions used in the impairment test of goodwill.
The carrying amount of goodwill at December 31, 2006 and 2005 amounted to P
=23 million included in “Other noncurrent
assets - net” account under “Deferred charges and others” in the consolidated balance sheets (see Note 11).
No impairment loss was recognized in 2006 and 2005.
Contingencies. The Company is currently involved in various legal proceedings. 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. The Company currently does not believe these proceedings will
have a material adverse effect on its consolidated financial position and results of operations. It is possible, however, that
future results of operations could be materially affected by changes in the estimates or in the effectiveness of strategies
relating to these proceedings (see Note 29).
4.
SEGMENT INFORMATION
Segment information is prepared on the following bases:
Business Segments
For management purposes, the Company is organized into three business activities - broadcasting, cable and satellite,
and other businesses. This segmentation is the basis upon which the Company reports its primary segment information.
The broadcasting segment is principally the television and radio broadcasting activities which generates revenue from
sale of national and regional advertising time. Cable and satellite business primarily develops and produces programs for
cable television, including delivery of television programming outside the Philippines through its DTH satellite service,
cable television channels and blocked time on television stations. Other businesses include movie production, consumer
products and services.
Geographical Segments
Although the Company is organized into three business activities, they operate in three major geographical areas. In the
Philippines, its home country, the Company is involved in broadcasting, cable operations and other businesses. In the
United States and other locations (which includes Middle East, Europe and Australia), the Company operates its cable
and satellite operations to bring television programming outside the Philippines.
Inter-segment Transactions
Segment revenue, segment expenses and segment results include transfers among business segments and among
geographical segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers
for similar services. Those transfers are eliminated in consolidation.
Business Segment Data
The following tables present revenue and income information and certain asset and liability information regarding business segments for the years ended
December 31, 2006, 2005 and 2004:
Broadcasting
2004
2005
(As restated - (As restated Note 2)
Note 2)
2006
Revenues
External sales
Inter-segment sales
Total revenue
Results
Segment result
Finance cost
Finance revenue
Equity in net earnings (losses)
of associates
Foreign exchange gain (loss)
Other income
Income tax
Net income (loss)
Assets and Liabilities
Segment assets
Investments in associates - at equity
Consolidated total assets
Segment liabilities
Other Segment Information
Capital expenditures:
Property and equipment
Intangible assets
Depreciation and amortization
of program rights and other rights
Noncash expenses other than
depreciation and amortization
of program rights and other rights
Cable and satellite
2006
Other Businesses
Consolidated
2004
2005
(As restated - (As restated 2006
Note 2)
Note 2)
2004
2006
2005
P
= 11,168,762 P
= 11,612,208 P
= 10,856,408 P
= 4,820,554 P
= 4,068,221 P
= 3,895,790 P
= 1,396,317 P
= 1,366,647 P
= 1,019,134
217,032
110,815
59,027
103,371
–
117,605
236,122
273,159
94,776
P
= 11,385,794 P
= 11,723,023 P
= 10,915,435 P
= 4,923,925 P
= 4,068,221 P
= 4,013,395 P
= 1,632,439 P
= 1,639,806 P
= 1,113,910
P
=–
(556,525)
(P
= 556,525)
P
=–
(383,974)
(P
= 383,974)
P
=– P
= 17,385,633 P
= 17,047,076 P
= 15,771,332
(271,408)
–
–
–
(P
= 271,408) P
= 17,385,633 P
= 17,047,076 P
= 15,771,332
2005
2004
2006
Eliminations
2005
2004
P
= 815,000
(1,353,368)
533,578
P
= 300,454
(989,996)
294,799
P
= 924,852
(911,843)
138,222
P
= 73,709
(52,400)
5,159
P
= 385,466
(11,122)
32,545
P
= 231,633
(67)
8,226
P
= 96,561
(177)
4,605
(P
= 538,785)
(872)
4,955
P
= 89,459
1,180
6,449
P
= 676,212
42,562
–
P
= 903,586
–
(36)
P
= 346,060 P
= 1,661,482 P
= 1,050,721 P
= 1,592,004
– (1,363,383) (1,001,990)
(910,730)
–
543,342
332,263
152,897
–
119,151
671,971
(375,273)
P
= 411,059
–
(9,606)
469,311
8,517
P
= 73,479
–
(2,347)
498,525
(210,226)
P
= 437,183
(51,853)
35,305
345,231
(216,795)
P
= 138,356
(194,166)
(29,905)
746,489
62,465
P
= 991,772
(45,976)
–
17,231
(41,891)
P
= 169,156
–
17,225
53,746
(75,364)
P
= 96,596
515
(7,650)
23,056
(239,834)
(P
= 758,615)
(1,349)
–
46,801
(14,856)
P
= 127,684
–
–
(622,241)
–
P
= 96,533
–
–
(951,714)
–
(P
= 48,164)
–
–
(335,414)
–
P
= 10,646
(51,853)
171,681
448,707
(667,432)
P
= 742,544
(193,651)
(47,161)
287,142
(168,852)
P
= 258,472
(47,325)
(2,347)
227,143
(266,973)
P
= 744,669
P
= 18,543,208 P
= 20,694,815 P
= 20,027,343 P
= 4,417,299 P
= 1,642,458 P
= 3,695,695 P
= 4,631,595 P
= 3,976,767 P
= 1,124,338 (P
= 4,036,600) (P
= 1,856,854) (P
= 1,539,776) P
= 23,555,502 P
= 24,457,186 P
= 23,307,600
3,580,822
2,487,992
2,606,705
–
–
–
–
–
– (3,536,589) (2,443,759) (2,368,821)
44,233
44,233
237,884
P
= 22,124,030 P
= 23,182,807 P
= 22,634,048 P
= 4,417,299 P
= 1,642,458 P
= 3,695,695 P
= 4,631,595 P
= 3,976,767 P
= 1,124,338 (P
= 7,573,189) (P
= 4,300,613) (P
= 3,908,597) P
= 23,599,735 P
= 24,501,419 P
= 23,545,484
P
= 4,176,947 P
= 4,000,924 P
= 2,885,411 P
= 1,623,141 P
= 2,402,669 P
= 1,842,427 P
= 3,908,614
P
= 814,048
P
= 845,996 (P
= 4,059,165) (P
= 1,893,961) (P
= 1,617,844) P
= 5,649,537 P
= 5,323,680 P
= 3,955,990
P
= 442,914
646,632
P
= 651,185
636,090
P
= 752,196
578,789
P
= 119,913
124,171
P
= 223,346
67,076
P
= 147,517
141,164
P
= 47,241
214,129
P
= 14,718
196,756
P
= 13,587
77,238
P
=–
–
P
=–
28,826
P
=–
(14,346)
P
= 610,068
984,932
P
= 889,249
928,748
P
= 913,300
782,845
1,705,721
1,761,354
1,762,888
252,750
201,534
176,649
99,217
99,159
98,229
–
–
(4,325)
2,057,688
2,062,047
2,033,441
196,649
572,025
335,239
90,125
465,378
205,042
11,540
11,517
22,304
–
(292,391)
–
298,314
756,529
562,585
Geographical Segment Data
The following tables present revenue and expenditure and certain asset information regarding geographical segments for the years ended December 31, 2006,
2005 and 2004:
2004
2006
Others
2005
2004
2006
Eliminations
2005
P
= 13,084,107 P
= 13,202,093 P
= 12,654,058 P
= 3,437,104 P
= 2,919,411 P
= 2,779,571
556,525
383,974
271,408
–
–
–
P
= 13,640,632 P
= 13,586,067 P
= 12,925,466 P
= 3,437,104 P
= 2,919,411 P
= 2,779,571
P
= 864,422
–
P
= 864,422
P
= 925,572
–
P
= 925,572
P
= 337,703
–
P
= 337,703
P
=–
(556,525)
(P
= 556,525)
P
=–
(383,974)
(P
= 383,974)
P
= 28,153,007 P
= 25,769,513 P
= 22,000,305 P
= 2,659,344 P
= 1,863,083 P
= 1,911,374
P
= 360,573 P
= 1,169,437 P
= 3,541,769 (P
= 7,573,189) (P
= 4,300,614) (P
= 3,907,964) P
= 23,599,735 P
= 24,501,419 P
= 23,545,484
2006
Revenue
External sales
Inter-segment sales
Total revenue
Other Segment Information
Segment assets
Capital expenditures:
Property and equipment
Intangible assets
560,225
984,932
Philippines
2005
707,714
899,922
2004
806,731
745,160
2006
29,728
–
United States
2005
170,079
–
65,065
6,039
20,115
–
11,456
–
41,504
45,992
–
–
–
28,826
2004
2006
Consolidated
2005
2004
P
=– P
= 17,385,633 P
= 17,047,076 P
= 15,771,332
(271,408)
–
–
–
(P
= 271,408) P
= 17,385,633 P
= 17,047,076 P
= 15,771,332
–
(14,346)
610,068
984,932
889,249
928,748
913,300
782,845
5.
CASH AND CASH EQUIVALENTS
Cash on hand and in banks
Short-term placements
2006
P
= 1,334,611
327,221
P
= 1,661,832
2005
P
= 1,284,690
467,040
P
= 1,751,730
Cash in banks earn interest at the respective bank deposit rates. Short-term placements are made for varying periods of
up to three months depending on the immediate cash requirements of the Company, and earn interest at the respective
short-term placement rates.
6.
TRADE AND OTHER RECEIVABLES
Trade receivables
Due from related parties (see Note 14)
Advances to employees and talents
Advances to suppliers
Receivable from DirecTV (see Note 24)
Other receivables
Less allowance for doubtful accounts (see Note 3)
2006
P
= 4,010,212
288,715
217,630
121,214
97,963
197,965
4,933,699
551,169
P
= 4,382,530
2005
P
= 3,904,848
246,698
206,948
97,002
439,499
356,312
5,251,307
599,407
P
= 4,651,900
Trade receivables are noninterest-bearing and are generally on 60-90 days’ terms.
Receivable from DirecTV was subsequently collected in January 2007.
7.
OTHER CURRENT ASSETS - NET
Prepaid taxes
Inventories at net realizable value (see Note 3)
Preproduction expenses
Advance payment to a supplier
Prepaid expenses and others
2006
P
= 360,723
206,899
281,497
80,000
82,103
P
= 1,011,222
2005
P
= 461,881
138,978
103,070
–
86,838
P
= 790,767
Inventories consist mainly of materials and supplies of the Parent Company and records and other consumer products
held for sale by subsidiaries. The cost of inventories carried at net realizable value amounted to P
= 244 million and
P
= 170 million in 2006 and 2005, respectively.
8.
LONG-TERM RECEIVABLE FROM A RELATED PARTY
On June 30, 2004, Sky Vision and Central CATV, Inc. (“Central” or “Issuer”) issued a convertible note (note) to the Parent
Company amounting to US$30 million equivalent to P
= 1,579 million and P
= 1,576 million as of December 31, 2006 and
2005, respectively. The Parent Company’s long-term receivable from Sky Vision, includes accrued interest receivable of
P
= 459 million and P
= 344 million as of December 31, 2006 and 2005, respectively. The note is subject to interest of 13%
compounded annually and matured on June 30, 2006. The principal and accrued interest as of maturity date shall be
mandatorily converted, based on the prevailing U.S. Dollar to Philippine Peso exchange rate on Maturity Date, at a
conversion price equivalent to a twenty percent (20%) discount of: (a) the market value of the Shares, in the event of a
public offering of the Issuer before Maturity Date; (b) the valuation of the Shares by an independent third party appraiser
that is a recognized banking firm, securities underwriter or one of the big three international accounting firms or their
Philippine affiliate jointly appointed by the Lopez and Benpres Holdings Corporation (Benpres Group) and Philippine Long
Distance Telephone Company and Mediaquest Holdings, Inc. (PLDT Group) pursuant to the Master Consolidation
Agreement (MCA) (see Note 11) dated July 18, 2001 as amended or supplemented.
As of December 31, 2006, the conversion price has not been determined. Based on the provisions of the convertible
note, its conversion cannot be completed without the determination of the conversion price, which in turn depends on the
valuation of Sky Vision or Central, by an independent third party. Consequently, ABS-CBN cannot convert the notes
without such valuation. The conversion date was effectively extended since the conversion price was not fixed on
June 30, 2006. The conversion date will effectively be the date when the conversion price will be set. ABS-CBN will gain
control of Sky Vision upon their conversion of the convertible note. Consequently, the voting rights on the underlying
shares are retained by the original shareholders and ABS-CBN has no right to exercise such voting rights.
The convertible note does not specifically state that interest shall accrue after June 30, 2006 in the event that the
convertible note is not converted for any reason. Thus, no interest was charged after June 30, 2006.
Prior to the issuance of the convertible note, Sky Vision, Central and The Philippine Home Cable Holdings, Inc. (Home)
had trade and advances payable to its shareholders in the Benpres Group and the PLDT Group, respectively. Upon
receipt of the proceeds of the note, Sky Vision, Central and Home prioritized the servicing of its outstanding payables to
third-party suppliers and creditors, as well as new payables due to CPI. As a result, these companies did not service
payables to its existing shareholders outstanding as of June 30, 2004. Included in the amounts left unpaid were CPI's
receivable from Central of around P
= 437 million. Subject to approval of its creditors, the Parent Company intends to
include CPI's receivable in the above equity conversion in Sky Vision under the same terms of the note.
On January 11, 2007, the Parent Company signed a commitment letter with ABN Amro Bank N.V., BPI Capital
Corporation and ING Bank N.V. (together, the Mandated Lead Arrangers) to arrange and underwrite on a firm
commitment basis the refinancing/restructuring of the existing long-term loan. Consequently, the execution copies of the
agreement amending the Senior Credit Agreement (SCA) facility was signed on March 27, 2007. It provides a carve out
allowing P
= 437 million in receivables of CPI from Central to be converted into equity. This shall effectively supersede the
consent requirement under the old facility.
As of December 31, 2006, equity in net losses amounting to P
= 52 million has been credited against the “Long-term
receivable from a related party” account in the consolidated balance sheet.
9.
PROPERTY AND EQUIPMENT
Land and
Land
Building and
Improvements Improvements
P
= 297,944
P
= 8,114,474
At January 1, 2006, net of accumulated depreciation
–
7,194
Additions
–
–
Disposals
42,584
(61)
Reclassifications
Depreciation charge for the year
(1,192)
(473,481)
(see Notes 18, 19 and 20)
P
= 7,690,771
P
= 296,691
net of accumulated depreciation
Television,
Radio, Movie
and Auxiliary
Equipment
P
= 1,055,532
311,034
(218)
(5,455)
Other
Equipment
P
= 700,871
54,036
(2,444)
203,900
(404,627)
(291,065)
Construction
in Progress
P
= 118,778
237,804
–
(240,968)
–
Total
P
= 10,287,599
610,068
(2,662)
–
(1,170,365)
P
= 956,266
P
= 665,298
P
= 115,614
P
= 9,724,640
At January 1, 2006:
Cost
Accumulated depreciation
Net carrying amount
P
= 305,940
(7,996)
P
= 297,944
P
= 9,778,788
(1,664,314)
P
= 8,114,474
P
= 5,530,811
(4,475,279)
P
= 1,055,532
P
= 3,201,128
(2,500,257)
P
= 700,871
P
= 118,778
–
P
= 118,778
P
= 18,935,445
(8,647,846)
P
= 10,287,599
At December 31, 2006:
Cost
Net carrying amount
P
= 298,983
(2,292)
P
= 296,691
P
= 9,825,584
(2,134,813)
P
= 7,690,771
P
= 5,765,479
(4,809,213)
P
= 956,266
P
= 3,477,171
(2,811,873)
P
= 665,298
P
= 115,614
–
P
= 115,614
P
= 19,482,831
(9,758,191)
P
= 9,724,640
P
= 291,008
3,835
–
4,201
P
= 8,356,900
157,908
(3,083)
46,491
P
= 1,219,179
149,192
(9,487)
183,073
P
= 692,455
243,040
(4,636)
73,474
(443,742)
(486,425)
(303,462)
At January 1, 2005, net of accumulated depreciation
Additions
Disposals
Reclassifications
Depreciation charge for the year
net of accumulated depreciation
At January 1, 2005:
Cost
Reclassifications
Net carrying amount
(1,100)
P
= 90,743
335,274
–
(307,239)
–
P
= 10,650,285
889,249
(17,206)
–
(1,234,729)
P
= 297,944
P
= 8,114,474
P
= 1,055,532
P
= 700,871
P
= 118,778
P
= 10,287,599
P
= 297,904
–
(6,896)
P
= 291,008
P
= 9,585,198
(1,234,616)
6,318
P
= 8,356,900
P
= 5,296,294
(4,069,106)
(8,009)
P
= 1,219,179
P
= 2,969,740
(2,285,872)
8,587
P
= 692,455
P
= 90,743
–
–
P
= 90,743
P
= 18,239,879
(7,589,594)
–
P
= 10,650,285
Land and
Land
Improvements
At December 31, 2005:
Cost
Net carrying amount
Building and
Improvements
P
= 305,940
(7,996)
P
= 297,944
Television,
Radio, Movie
and Auxiliary
Equipment
P
= 9,778,788
(1,664,314)
P
= 8,114,474
P
= 5,530,811
(4,475,279)
P
= 1,055,532
Other
Equipment
Construction
in Progress
P
= 3,201,128
(2,500,257)
P
= 700,871
P
= 118,778
–
P
= 118,778
Total
P
= 18,935,445
(8,647,846)
P
= 10,287,599
Property and equipment of the Parent Company with a carrying amount of P
= 9,461 million as of
December 31, 2006 and 2005, respectively, was pledged as collateral to secure the Parent Company’s long-term debt
(see Note 15).
Unamortized borrowing costs capitalized as part of property and equipment amounted to P
= 973 million and P
= 1,011 million
as of December 31, 2006 and 2005, respectively. No borrowing cost was capitalized beginning 2002.
Property and equipment includes the following amounts where the Company is a lessee under a finance lease
(see Note 24):
2006
P
= 467,608
(292,875)
P
= 174,733
Cost - capitalized finance lease
Net book value
2005
P
= 393,823
(216,327)
P
= 177,496
The useful lives of the Company’s assets are estimated as follows:
Land improvements
Building and improvements
Television, radio, movie and auxiliary equipment
Other equipment
10 years
15 to 40 years
10 to 15 years
3 to 10 years
The Company determined depreciation charges for each significant part of an item of property and equipment.
10. PROGRAM RIGHTS AND OTHER INTANGIBLE ASSETS
2006
Balance at beginning of year
Additions
Amortization and write-off during the year
Balance at end of year
Less current portion
Noncurrent portion
Program
Rights
P
= 1,629,849
793,514
(886,405)
1,536,958
682,846
P
= 854,112
Story,
Music and
Publication
Rights
P
= 4,561
1,144
(918)
4,787
220
P
= 4,567
Movie
In-Process
P
= 79,461
172,503
(168,403)
83,561
82,424
P
= 1,137
Video Rights
and Record
Master
P
= 11,395
17,771
(21,366)
7,800
7,800
P
=–
Cable
Channels CPI
P
= 459,968
–
–
459,968
–
P
= 459,968
Costs and related accumulated amortization of other intangible assets is as follow:
Cost
Accumulated amortization
Net carrying amount
Cable
Channels CPI
P
= 574,960
(114,992)
P
= 459,968
2006
Production
and
Distribution
Business Middle East
P
= 212,358
(87,676)
P
= 124,682
Total
P
= 787,318
(202,668)
P
= 584,650
Production
and
Distribution
P
= 141,759
–
(17,075)
124,684
–
P
= 124,684
Total
P
= 2,326,993
984,932
(1,094,167)
2,217,758
773,290
P
= 1,444,468
2005
Additions
Amortization and write-off during the year
Noncurrent portion
Program
Rights
P
= 1,629,447
821,992
(821,590)
1,629,849
715,018
P
= 914,831
Story,
Music and
Publication
Rights
P
= 3,840
6,449
(5,728)
4,561
1,260
P
= 3,301
Movie
In-Process
P
= 79,607
84,554
(84,700)
79,461
79,461
P
=–
Video Rights
and Record
Master
P
= 25,011
15,753
(29,369)
11,395
11,395
P
=–
Cable
Channels CPI
P
= 459,968
–
–
459,968
–
P
= 459,968
Production and
Distribution
P
= 157,584
–
(15,825)
141,759
–
P
= 141,759
Total
P
= 2,355,457
928,748
(957,212)
2,326,993
807,134
P
= 1,519,859
Costs and related accumulated amortization of other intangible assets is as follow:
Cost
Accumulated amortization
Net carrying amount
2005
Production and
Cable
Distribution
Channels Business CPI
Middle East
P
= 574,960
P
= 212,358
(114,992)
(70,599)
P
= 459,968
P
= 141,759
Total
P
= 787,318
(185,591)
P
= 601,727
The cable channels, namely, Lifestyle Channel, Cinema One and Myx Channel, were acquired by CPI from Sky Vision in
2001. Based on the Company’s analysis of all the relevant factors, there is no foreseeable limit to the period over which
this business is expected to generate net cash inflows for the Company and therefore, assessed to have an indefinite life.
As at December 31, 2006 and 2005, cable channels were tested for impairment (see Note 12).
Production and distribution business for the Middle East operations represents payments arising from the sponsorship
agreement between Arab Digital Distribution (ADD) and ABS-CBN Middle East. This agreement grants the Company the
right to operate in the Middle East with ADD as sponsor for a period of 25 years.
11. OTHER NONCURRENT ASSETS - NET
Tax credits with tax credit certificates (TCCs)
Available-for-sale investments
Investments in associates
Deferred charges and others (see Note 12)
2006
P
= 1,741,030
68,426
44,233
312,234
P
= 2,165,923
2005
P
= 1,767,484
47,321
44,233
282,674
P
= 2,141,712
Tax Credits
Tax credits represent claims on the government arising from airing of government commercials and advertisements.
Pursuant to Presidential Decree No. 1362, these will be collected in the form of TCCs which the Parent Company can use
in paying for import duties and taxes on its broadcasting equipment. The Parent Company expects to utilize these tax
credits within the next 10 years.
Deferred Charges
In view of the Deal Memorandum with DirecTV discussed in Note 24, the Company has written off the deferred charges
amounting to P
= 348 million pertaining to the DTH subscribers as of December 31, 2005.
Available-for-sale Investments
Available-for-sale investments are investments in ordinary shares and therefore have no fixed maturity date or coupon
rate. Available-for-sale investments with a carrying value of P
= 15 million and P
= 14 million as of December 31, 2006 and
2005 respectively was pledged as part of the collateral to secure the Parent Company’s long-term debt (see Note 15).
As of December 31, 2006, unrealized fair value gains on available-for-sale investments amounting to P
= 21 million was
directly charged to equity.
Investments in Associates
Investments in associates are as follows:
Company
AMCARA Broadcasting
Network, Inc. (Amcara)
Star Cinema
Sky Vision
Place of
Incorporation
Principal
Activities
Philippines
Philippines
Philippines
Services
Movie Production
Cable operation
Acquisition costs
Accumulated equity in net losses:
Equity in net losses during the year
Balance at end of year, as restated
Ownership Interest
2006
2005
2006
P
= 541,292
(497,059)
–
(497,059)
P
= 44,233
49.0
45.0
10.2
49.0
45.0
10.2
2005
P
= 541,292
(303,408)
(193,651)
(497,059)
P
= 44,233
As of December 31, 2006 and 2005, the remaining carrying value of investments in associates pertains to Amcara.
Investments in Star Cinema and Sky Vision have been reduced to zero due to accumulated equity in net losses.
Condensed financial information of the associates follows:
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Net capital deficiency
Revenues
Cost and expenses
Net loss
2006
P
= 1,197,691
3,181,357
(7,850,401)
(316,626)
(P
= 3,787,979)
2005
P
= 2,038,169
6,494,213
(3,073,041)
(6,012,886)
(P
= 553,545)
P
= 2,221,032
(2,341,186)
(P
= 120,154)
P
= 3,051,591
(4,974,049)
(P
= 1,922,458)
On July 18, 2001, the Parent Company, along with the Benpres Group signed an MCA whereby they agreed with the
PLDT Group to consolidate their respective ownership or otherwise their rights and interests in Sky Vision and Unilink
Communications Corporation (Unilink) under a holding company to be established for that purpose. Beyond Cable
Holdings, Inc. (Beyond) was incorporated on December 7, 2001 as the holding company. Sky Vision owns Central and
Pilipino Cable Corporation (PCC), which in turn operate cable television systems in Metro Manila and key provincial areas
under the tradenames “Sky Cable” and “Sun Cable”. Unilink owns Home, which operates cable television systems in
Metro Manila and key provincial areas under the tradename “Home Cable”.
Pursuant to the MCA, the Benpres Group and the PLDT Groups shall, respectively, own 66.5% and 33.5% of Beyond
upon the transfer of their respective ownership and rights and interests in Sky Vision and Unilink into Beyond. Although
the original MCA envisioned the transfer to be completed within six months from signing date, or by January 18, 2002, the
Benpres Group and PLDT Group agreed on January 16, 2002, to extend this closing date.
In view of the above, in a separate Memorandum of Agreement (Agreement) executed on April 8, 2004, the major
stockholders of Home and Sky Vision have agreed to consolidate the ownership of their respective shares in Home and
Sky Vision and to combine the operations, assets and liabilities of Home and the Central. To effect the consolidation,
Home transferred its assets and liabilities to Central in exchange for a 33% ownership. The issuance of shares was
approved by the SEC on August 30, 2004.
It is a plan to transfer Sky Vision’s Minority Shareholders (Sky Vision Minority) to Central to put into effect in Central what
was originally intended for Beyond. With this transfer and as stipulated in the MCA, the Sky Vision Minority shall hold
17.3% of Central while Sky Vision will hold 55% and Home holding the balance of 27.7%. Barring any unforeseen
impediments, it is expected that the transfer of the Sky Vision Minority to Central will be completed in 2007.
In relation to the consolidation discussed above, a competitor broadcasting company filed a case before National
Telecommunications Commission (NTC) asking for NTC to declare as null and void the consolidation of the cable
operating companies. On November 16, 2004, the NTC denied the motion for cease and desist order filed by the
competitor broadcasting company. On November 30, 2004, the competitor broadcasting company filed a motion for
reconsideration which is still pending with the NTC. It is the opinion of Sky Vision’s legal counsels that the case filed by
the competitor broadcasting company is without legal basis.
In November 2005, Sky Vision met with its creditors to request for an extension of the grace period on its long-term debt
for another five (5) years, with principal amortization to start in 2011. The creditors have already formed a steering
committee to address the request of Sky Vision.
In September 2006, Central paid a token payment amounting to P
= 5 million, upon which the principal payments due in
September 2006, December 2006 and March 2007 were deferred to be paid on June 2007. A second token payment
amounting to P
= 5 million should be paid upon finalization of the debt restructuring. As of March 28, 2007, negotiations are
still ongoing.
12. IMPAIRMENT TESTING OF GOODWILL AND CABLE CHANNELS
Cable channels of CPI amounted to P
= 460 million as of December 31, 2006 and 2005 (see Note 10).
Goodwill in investment in a subsidiary included under “Other noncurrent assets - net” account in the consolidated balance
sheets totaled P
= 23 million as of December 31, 2006 and 2005.
For the impairment test of goodwill and cable channels, the difference between the recoverable amount and the carrying
amount of the cash-generating unit was compared. The recoverable amount of the cash-generating unit is its value-inuse. Value-in-use was determined using cash flow projections which were based on financial budgets approved by the
subsidiaries’ senior management covering a five-year period. The discount rate applied to the cash flow projections as of
December 31, 2006 and 2005 is 15.22% and 21.1%, respectively, while cash flows beyond the 5-year period are
extrapolated using a 0% perpetual growth rate in 2006 (5% in 2005) that is based on projected long-term inflation rate and
long-term real growth.
Key Assumptions
Following are the key assumptions on which management has based its cash flow projections to undertake impairment
testing of goodwill and cable channels:
Gross Revenues. On the average, gross revenues of the subsidiaries over the next five years were projected to grow in
line with the economy or with nominal Gross Domestic Product (GDP). 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. Historically, advertising spending growth had a direct correlation with economic growth.
Operating Expenses.
Cash expenses of the subsidiaries particularly employee costs and general and administrative
expenses were projected to rise at an inflationary pace. On the other hand, production costs or cost of sales were
forecasted to increase in line with revenue growth.
Gross Margins. Increased efficiencies over the next five years are expected to result to some improvements in gross
margins.
Discount Rate. The discount rate or Weighted Average Cost of Capital (WACC) was based on the cost of equity of the
Parent Company plus 2% for small size premium. The cost of equity was obtained from external data provider.
13. TRADE AND OTHER PAYABLES
Trade
Accrued production cost and other expenses
Accrued salaries and other employee benefits
Accrued taxes
Due to related parties (see Note 14)
Deferred revenue
Accrued interest
Other current liabilities
2006
P
= 1,682,625
934,429
691,488
602,204
224,678
240,045
15,656
162,790
P
= 4,553,915
2005
(As restated see Note 2)
P
= 1,993,708
762,826
441,749
543,320
311,299
374,701
22,346
79,034
P
= 4,528,983
14. RELATED PARTY DISCLOSURES
The consolidated financial statements include the financial statement of ABS-CBN Broadcasting Corporation and the
subsidiaries listed in the following table:
Company
ABS-CBN Australia
ABS-CBN Center for Communication Arts, Inc.
ABS-CBN Europe
ABS-CBN Film Productions, Inc. (ABS-CBN Films)
ABS-CBN Global Ltd. (ABS-CBN Global) (c)
ABS-CBN Interactive, Inc.
ABS-CBN Middle East *
ABS-CBN Multimedia, Inc.
ABS-CBN Integrated and Strategic Property Holdings, Inc. (e)
ABS-CBN Publishing, Inc. (f)
Creative Programs, Inc.
Place of
Incorporation
Victoria, Australia
Philippines
United Kingdom
Philippines
Cayman Islands
Philippines
California, USA
Dubai, UAE
Philippines
Philippines
Philippines
Philippines
E-Money Plus, Inc.
Professional Services for Television & Radio, Inc.
Sarimanok News Network, Inc. (SNN)
Philippines
Philippines
Philippines
Sky Films, Inc. (Sky Films)
Star Recording, Inc.
Philippines
Philippines
Studio 23, Inc. (Studio 23)
Philippines
TV Food Chefs, Inc.
Roadrunner Network, Inc. (Roadrunner)
Star Songs, Inc.
Philippines
Philippines
Philippines
Principal Activities
Cable and satellite programming services
Educational/training
Movie production
Holding company
Services - interactive media
Digital electronic content distribution
Real estate
Print publishing
Content development and programming
services
Services - money remittance
Services
services
Services - film distribution
Audio and video production and
distribution
services
Services - restaurant and food
Services - post production
Music Publishing
Ownership Interest
2006
2005
100.0(a)
100.0(a)
(b)
100.0
100.0(b)
100.0(a)
100.0(a)
100.0
100.0
100.0
100.0
100.0
100.0
(a)
98.0
98.0(a)
(a)
100.0
100.0(a)
75.0(d)
75.0(d)
100.0
100.0
100.0
100.0
100.0
100.0(a)
100.0
100.0
100.0(a)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
98.9
100.0
100.0
100.0
98.9
100.0
(a)
indirectly-owned through ABS-CBN Global
non-stock ownership interest
with a branch in the Philippines
(d)
indirectly-owned through ABS-CBN Interactive, Inc.
(e)
not yet started commercial operations
(f)
owns 50% interest in Sky Guide, Inc. and 70% interest in Culinary Publications, Inc.
*
ABS-CBN Middle East owns ABS-CBN Middle East LLC
(b)
(c)
ABS-CBN Broadcasting Corporation is the ultimate Philippine parent entity and the ultimate parent company of the
Company is Lopez, Inc.
The following table provides the total amount of transactions, which have been entered into with related parties.
Significant transactions of the Company with its associates and related parties follow:
Associates:
Interest on noncurrent receivable from Sky Vision (see Note 21)
License fees charged by CPI to Central(a), PCC and Home Cable
Blocktime fees paid by Studio 23 to Amcara(b)
Affiliates:
Expenses paid by Parent Company and subsidiaries to Manila Electric Company
(Meralco), Bayan Telecommunications Holding, Inc. (Bayantel)
and other related parties (see Notes 18, 19 and 20)
Termination cost charges of Bayantel, a subsidiary of Lopez, to ABS-CBN Global
(see Note 19)
Airtime revenue from Manila North Tollways Corp., Bayantel and Meralco,
an associate of Lopez
Expenses and charges paid for by the Parent Company which are reimbursed by
the concerned related parties (see Notes 18, 19 and 20)
2006
2005
2004
P
= 115,424
104,927
57,078
P
= 261,161
112,334
60,816
P
= 112,841
137,443
68,000
413,036
432,346
364,527
236,244
286,549
232,140
50,718
61,273
30,162
36,862
34,788
46,449
The related receivables and payables from related parties are as follows:
Due from associates
Due from affiliates
Total
2006
P
= 150,929
137,786
P
= 288,715
2005
P
= 150,929
95,769
P
= 246,698
Due to associates
Due to affiliates
Total
P
= 32,938
191,740
P
= 224,678
P
= 40,715
270,584
P
= 311,299
Lopez, Inc. (Ultimate Parent)
The Company has no transaction with Lopez, Inc. for the years 2006 and 2005.
a.
License Fees Charged by CPI to Central
CPI entered into a cable lease agreement (Agreement) with Central for the airing of the cable channels (see Note 10)
to the franchise areas of Central and its cable affiliates. The initial Agreement with Central is for a period of five years
effective January 1, 2001, renewable on a yearly basis upon mutual consent of both parties. Said Agreement was
renewed for one year in 2006 and under negotiation for 2007. Under the terms of the Agreement, CPI receives
license fees from Central and its cable affiliates computed based on agreed percentage of subscription revenues of
Central and its cable affiliates. As the owner of the said cable channels, CPI develops and produces its own shows
and acquires program rights from various foreign and local suppliers.
b.
Blocktime Fees Paid by Studio 23 to Amcara
Studio 23 owns the program rights being aired in UHF Channel 23 of Amcara. On July 1, 2000, it entered into a
blocktime agreement with Amcara for its provincial operations.
Other transactions with associates include cash advances for working capital requirements.
Terms and Conditions of Transactions with Related Parties
The sales to and purchases from related parties are made at normal market prices. Outstanding balances as of year-end
are unsecured, interest-free and settlement occurs in cash, except for the noncurrent receivables from SkyVision
discussed in Note 8. For the years ended December 31, 2006 and 2005, the Company has not made any provision for
doubtful accounts relating to amounts owed by related parties. This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party operates.
As discussed in Note 15, the Parent Company’s obligation under the SCA is jointly and severally guaranteed by its
principal subsidiaries.
Compensation of Key Management Personnel of the Company
Compensation (see Note 16)
Pension benefit
Vacation leaves and sick leaves
Termination benefits
Total compensation paid to key
management personnel
2006
P
= 413,692
47,840
29,484
–
2005
P
= 358,321
32,128
3,920
70,181
2004
P
= 281,553
20,640
4,472
–
P
= 491,016
P
= 464,550
P
= 306,665
15. INTEREST-BEARING LOANS AND BORROWINGS
Maturity
Current:
Bank loans
Long-term debt under SCA
Obligations under capital lease (see Note 24)
Noncurrent:
Long-term debt under SCA (net of transaction costs
amounting to P
= 113,691 in 2006 and P
= 197,551
in 2005)
Obligations under capital lease (see Note 24)
Effective
Interest Rate
2006
2005
Amount
2006
2005
2007
2007
2007
10.28
12.26
11.17
13.01
P
= 473,979
1,554,855
108,305
P
= 2,137,139
P
= 355,398
1,322,500
88,246
P
= 1,766,144
2008-2009
2008-2011
12.90
12.87
P
= 2,251,904
185,047
P
= 2,436,951
P
= 4,307,941
201,699
P
= 4,509,640
Bank Loans
This represents peso-denominated loans obtained from local banks which bear average annual interest rates of 10.28% in
2006 and 11.17% in 2005.
Term Loan under the SCA
On June 18, 2004, the Parent Company entered into a 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, Jr. Communications Center, additional investment in the cable TV business and
funding capital expenditures and working capital requirements. The SCA is classified in three (3) groups namely: Tranche
A, a floating rate facility (3.5% + LIBOR) amounting to US$62 million; Tranche B, a floating rate facility (3.5% + MART1 Tbill) amounting to P
= 2,688 million; and, Tranche C, a fixed rate facility (3.5% + FXTN) amounting to P
= 560 million. Both
Tranche A and Tranche B have a term of five years with 17 quarterly unequal payments and Tranche C has a term of four
years with four annual unequal installments. These have all been availed of in March 2005. The Parent Company’s
obligation under the SCA is secured and covered by a Mortgage Trust Indenture (MTI) which consists of substantially all
of the Parent Company’s real property and moveable assets used in connection with its business and insurance proceeds
related thereto. Further, the Parent Company’s obligation under the SCA is jointly and severally guaranteed by its
principal subsidiaries.
The SCA contains provision regarding the maintenance of certain financial ratios and limiting, among others, the
incurrence of additional debt, the payment of dividends, making investments, the issuing or selling the Parent Company’s
capital stock or some of its subsidiaries, the selling or exchange of assets, creation of liens and effecting mergers. As of
December 31, 2006 and 2005, the Parent Company is in compliance with the provisions of the SCA.
As indicated in the SCA, all existing loans of the Parent Company outside the SCA were settled via proceeds of the term
loan facility.
Details of the term loan under SCA using the effective interest rate method are as follows:
Long-term debt under SCA
Current portion
Noncurrent portion
2006
2005
P
= 1,554,855
2,251,904
P
= 3,806,759
P
= 1,322,500
4,307,941
P
= 5,630,441
Transaction costs related to the SCA amounting to P
= 324 million were deducted from the face amount of the loan to get its
net carrying value. This will be amortized over the life of the loan using the effective interest rate method of amortizing
transaction cost detailed as follows:
Tranche A (USD)
$353
835
774
597
353
72
$2,984
2004
2005
2006
2007
2008
2009
Tranche B (PHP)
P
= 14,526
34,809
33,353
26,778
16,440
3,479
P
= 129,385
Tranche C (PHP)
P
= 3,331
7,477
7,339
5,373
2,805
630
P
= 26,955
As of December 31, 2006 and 2005, P
= 210 million and P
= 126 million, respectively have been amortized and directly
reported in the consolidated statements of income.
Repayments of the term loan based on the face value of the SCA are scheduled as follows:
2007
2008
2009
P
= 1,681,654
1,809,978
676,915
P
= 4,168,547
To manage its exposures to foreign currency exchange and interest rate risks relating to the facility drawdowns, the
Parent Company entered into interest rate and cross currency swap contracts with counterparty banks (see Notes 25 and
26).
On January 11, 2007, the Parent Company signed a commitment letter with the Mandated Lead Arrangers to arrange and
underwrite on a firm commitment basis the refinancing/restructuring of the existing long-term loan. Consequently, the
execution copies of the agreement amending the SCA facility was signed on March 27, 2007. The major amendments to
the existing agreement that were agreed upon with the Mandated Lead Arrangers are as follows:
a.
There will be an additional amount that will be available for drawdown amounting to US$4,784 million. Once effected,
total outstanding loan will be around P
= 4,440 million, P
= 270 million more than the P
= 4,170 million that is currently
outstanding;
b.
The Tranche B and C will have bullet repayment schemes maturing in March 2012 while maintaining the original
structure of the Tranche A facility with a final due date of until June 2009. Interest payments will continue to be paid
on a quarterly basis;
c.
The applicable margins added to the benchmark interest rates will be reduced from 3.50% to an average of about
2.20%;
d.
Except for the Quezon City Broadcast Complex and certain broadcast machinery and equipment contained therein,
all other assets will be removed from the MTI and will no longer form part of the security package;
e.
Certain mandatory prepayment provisions will be removed;
f.
The Parent Company financial ratio requirement will be removed, while maintaining a financial ratio requirement on a
consolidated basis but at more relaxed thresholds;
g.
The Company will be allowed to make interest bearing advances and guarantees to Sky Vision of up to P
= 400 million;
h.
The Company will be allowed to convert into equity outstanding advances amounting to US$30 million including
interest and P
= 437 million, respectively made to Sky Vision by the Parent Company and CPI.
16. EQUITY
a.
Capital Stock
Details of authorized and issued capital stock follow:
2006
Number of
Shares
Amount
2005
Number of
Shares
(In Thousands)
Authorized Common shares - P
= 1 par value
Issued Common shares
b.
Amount
(In Thousands)
1,500,000,000
P
= 1,500,000
1,500,000,000
P
= 1,500,000
779,583,312
P
= 779,583
779,583,312
P
= 779,583
Philippine Depository Receipts (PDRs) convertible to common shares
2006
Number of
Shares
Amount
2005
Number of
Shares
(In Thousands)
Issuance during the year
10,000,000
(1,118,929)
8,881,071
P
= 200,000
(22,379)
P
= 177,621
Amount
(In Thousands)
10,000,000
–
10,000,000
P
= 200,000
–
P
= 200,000
This account represents ABS-CBN PDRs held by the Parent Company which are convertible into 10 million
ABS-CBN shares. These PDRs were listed in the Philippine Stock Exchange on October 7, 1999. Each PDR grants
the holders, upon payment of the exercise price and subject to certain other conditions, the delivery of one ABS-CBN
share or the sale of and delivery of the proceeds of such sale of one ABS-CBN share. 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. The PDRs may be exercised at any time from
October 7, 1999 until the expiry date as defined in the terms of the offering. Any cash dividends or other cash
distributions in respect of the underlying ABS-CBN shares shall be applied by ABS-CBN Holdings Corporation, issuer
of PDRs, towards payment of operating expenses and any amounts remaining shall be distributed pro-rata among
outstanding PDR holders.
In December 2006, the Parent Company issued P
= 22 million of these PDRs, which are convertible into 1,118,929
ABS-CBN shares, to some of its officers as payment for their bonuses.
c.
Unappropriated retained earnings available for dividend distribution is adjusted to exclude the Parent Company’s
accumulated equity in net losses of subsidiaries and associates amounting to P
= 1,666 million as of
December 31, 2006 and 2005, respectively.
d.
On June 3, 2004, the BOD approved the declaration of cash dividend of P
= 0.64 per share to all stockholders of record
as of July 26, 2004 payable on August 10, 2004.
e.
On March 28, 2007, the BOD approved the declaration of cash dividend of P
= 0.45 per share to all stockholders of
record as of April 20, 2007 payable on May 15, 2007.
17. AGENCY COMMISSION, INCENTIVES AND CO-PRODUCERS’ SHARE
Agency commission
Incentives and co-producers’ share
2006
P
= 1,547,307
910,517
P
= 2,457,824
2005
P
= 1,534,605
550,142
P
= 2,084,747
2004
P
= 1,759,939
436,723
P
= 2,196,662
Industry rules allow ABS-CBN to sell up to 18 minutes of commercial spots per hour of television programming. These
spots are sold mainly through advertising agencies which act as the buying agents of advertisers, and to a lesser extent,
directly to advertisers. Substantially, all gross airtime revenue, including airtime sold directly to advertisers, is subject to a
standard 15% agency commission.
Incentives include early payment and early placement discount as well as commissions paid to the Company’s account
executives and cable operators.
The Company has co-produced shows which are programs produced by ABS-CBN together with independent producers.
Under this arrangement, ABS-CBN provides the technical facilities and airtime, and handles the marketing of the shows.
The co-producer shoulders all other costs of production. The revenue earned on these shows is shared between
ABS-CBN and the co-producer.
18. PRODUCTION COSTS
Personnel expenses and talent fees (see Notes 10 and 23)
Facilities related expenses (see Notes 10, 14 and 24)
Amortization of program rights and other rights
(see Note 10)
Depreciation (see Note 9)
Other program expenses (see Notes 10 and 14)
2006
P
= 2,412,150
833,439
2005
P
= 2,513,203
840,284
2004
P
= 2,524,568
716,189
735,424
635,035
1,098,470
P
= 5,714,518
711,354
679,547
946,396
P
= 5,690,784
766,407
541,110
919,874
P
= 5,468,148
Other program expenses consist of production expenses including, but not limited to, set requirements, prizes,
transportation, advertising and other expenses related to the promotional activities of various projects during the year.
19. COST OF SALES AND SERVICES
Termination costs (see Note 14)
Facilities related expenses (see Notes 14 and 24)
Personnel expenses (see Note 23)
Amortization of program rights (see Note 10)
Inventory cost (see Note 10)
Other expenses (see Note 14)
2006
P
= 566,365
423,554
200,592
151,899
133,272
47,266
894,179
P
= 2,417,127
2005
P
= 404,600
535,809
167,972
115,964
363,115
47,894
738,252
P
= 2,373,606
2004
P
= 451,233
478,384
209,200
120,731
545,228
39,614
540,132
P
= 2,384,522
2006
P
= 2,078,012
536,905
519,539
488,064
447,521
151,185
138,948
94,060
2005
P
= 2,505,486
496,076
503,475
507,288
404,060
151,407
118,634
159,520
2004
P
= 1,704,469
407,653
95,448
565,579
337,774
168,959
128,428
164,045
17,075
663,373
P
= 5,134,682
363,888
637,384
P
= 5,847,218
92,509
465,132
P
= 4,129,996
20. GENERAL AND ADMINISTRATIVE EXPENSES
Personnel expenses (see Note 23)
Facilities related expenses (see Notes 14 and 24)
Advertising and promotions
Contracted services
Taxes and licenses
Entertainment, amusement and recreation
Provision for doubtful accounts (see Note 3)
Amortization of deferred charges and other intangible
assets (see Notes 10 and 11)
Other expenses (see Note 14)
21. OTHER INCOME AND EXPENSES
Other Income
Rental income (see Notes 14 and 24)
Royalty income
Others
2006
P
= 102,898
25,046
320,763
P
= 448,707
2005
P
= 90,374
11,450
185,318
P
= 287,142
2004
P
= 78,247
17,576
131,320
P
= 227,143
Others mainly pertain to income from gate receipts, studio tours, management fees and other miscellaneous revenues.
Finance Revenue
Mark-to-market gain (see Note 26)
Interest income
2006
P
= 381,437
161,905
P
= 543,342
2005
P
= 34,828
297,435
P
= 332,263
2004
P
=–
152,897
P
= 152,897
2006
2005
2004
P
= 115,424
46,481
P
= 161,905
P
= 261,161
36,274
P
= 297,435
P
= 112,841
40,056
P
= 152,897
2006
P
= 631,816
137,689
83,860
13,606
496,412
P
= 1,363,383
2005
P
= 683,465
218,845
87,046
12,241
393
P
= 1,001,990
2004
P
= 802,850
–
107,880
–
–
P
= 910,730
2006
P
= 563,701
34,442
33,673
P
= 631,816
2005
P
= 603,338
62,294
17,833
P
= 683,465
2004
P
= 745,885
23,006
33,959
P
= 802,850
The following are the sources of the Company’s interest income:
Long-term receivable from related parties
(see Notes 8 and 14)
Cash and cash equivalents (see Note 5)
Finance Costs
Interest expense (see Note 26)
Hedge cost (see Note 26)
Amortization of debt issue costs (see Note 15)
Bank service charges (see Note 5)
Mark-to-market loss (see Note 26)
The following are the sources of the Company’s interest expense:
Long-term debt under SCA (see Note 15)
Obligation under capital lease (see Note 15)
Bank loans (see Note 15)
22. INCOME TAX
Consolidated deferred tax assets - net of the Company follow:
2006
Deferred tax assets - net:
Capitalized interest, duties and taxes
(net of accumulated depreciation)
Accrued retirement expense and other
employee benefits
Allowance for doubtful accounts
Accrued expenses
Cumulative translation adjustment of cash flow hedge
Unrealized foreign exchange loss
Mark-to-market loss (gain)
Customer’s deposit
Net operating loss carryover (NOLCO )
Allowance for inventory obsolescence
MCIT
Reimbursable expenses
Others
2005
(P
= 295,652)
(P
= 326,515)
222,083
122,928
112,103
86,685
(69,881)
40,241
37,690
9,888
4,561
986
–
30,147
P
= 301,779
204,315
158,542
–
–
(8,045)
(11,330)
135,456
11,528
10,384
5,185
77,272
65,634
P
= 322,426
2005
P
= 436,633
(267,781)
P
= 168,852
2004
P
= 320,929
(53,956)
P
= 266,973
The provision for income tax follows:
Current
Deferred
2006
P
= 563,651
103,781
P
= 667,432
The details of the unrecognized deductible temporary differences, NOLCO, and MCIT of the subsidiaries follow:
2006
P
= 296,124
199,946
31,471
6,312
5,607
P
= 539,460
NOLCO
Allowance for doubtful accounts
Unearned revenue
MCIT
Accrued retirement expense and others
2005
P
= 201,652
146,429
–
908
5,253
P
= 354,242
Management believes that it is not probable that taxable income will be available against which temporary differences,
NOLCO and MCIT will be utilized.
MCIT of the subsidiaries amounting to P
= 7,298 million can be claimed as tax credit against future regular corporate income
tax as follows:
Year Incurred
2004
2005
2006
Expiry Dates
December 31, 2007
December 31, 2008
December 31, 2009
Amount
P
= 3,161
3,050
1,087
P
= 7,298
NOLCO of the subsidiaries amounting to P
= 324,375 million can be claimed as deductions from regular corporate income
tax as follows:
Year Incurred
2004
2005
2006
Expiry Dates
December 31, 2007
December 31, 2008
December 31, 2009
Amount
P
= 140,865
97,968
85,542
P
= 324,375
The reconciliation of statutory tax rates to effective tax rates applied to income before income tax is as follows:
Statutory tax rate
Additions to (reduction in) income taxes
resulting from the tax effects of:
Equity in net losses of investees
Interest income subject to final tax
Unrecognized deferred tax assets
Nondeductible interest expense
Others, mainly income subject to
different tax rates and change
in tax rate - net
Effective tax rates
2006
35%
2005
32%
2004
32%
1
(1)
2
4
14
(3)
(8)
1
1
(1)
(1)
–
6
47%
3
39%
(4)
27%
23. PENSION PLAN
The Company’s pension plan is composed of funded (Parent Company) and unfunded (Subsidiaries), noncontributory and
actuarially computed pension plan except for ABS-CBN International (unfunded and contributory) covering substantially all
of its employees. The benefits are based on years of service and compensation during the last year of employment.
In 2005, the Company implemented an Early Retirement Program. The employees availed this program from July to
December 2005. Total retrenchment cost amounted to P
= 576 million, net of recognized curtailment gain of P
= 158 million.
The following table summarizes the components of consolidated net benefit expense (income) recognized in the
consolidated statement of income and accrued pension obligation recognized in the consolidated balance sheets.
Net Benefit Expense (Income)
Current service cost
Interest cost
Expected return on plan assets
Net actuarial gain recognized
during the year
Curtailment gain
Net benefit expense/(income)
Actual return on Parent Company’s plan assets
2006
P
= 53,038
36,480
(14,031)
2005
P
= 41,474
51,482
(12,847)
2004
P
= 46,105
46,664
(12,658)
(50)
–
P
= 75,437
(351)
(158,418)
(P
= 78,660)
–
–
P
= 80,111
2006
P
= 36,628
2005
P
= 12,847
2006
P
= 853,765
(175,580)
678,185
(398,369)
P
= 279,816
2005
P
= 343,887
(138,952)
204,935
33,600
P
= 238,535
Benefit Liability
Present value of obligation
Fair value of plan assets
Unfunded obligation
Unrecognized net actuarial gain (loss)
Benefit liability
Consolidated changes in the present value of the defined benefit obligation are as follows:
2006
P
= 343,887
454,516
53,038
36,480
(34,156)
–
P
= 853,765
Defined benefit obligation at beginning of year
Actuarial loss on obligation
Current service cost
Interest cost
Benefits paid
Curtailment gain
Defined benefit obligation at end of year
2005
P
= 396,936
–
41,474
51,482
–
(146,005)
P
= 343,887
Change in the fair value of plan assets of the Parent Company are as follows:
2006
P
= 138,952
14,031
22,597
P
= 175,580
Fair value of plan assets at beginning of year
Expected return on plan assets
Actuarial gains
Fair value of plan assets at end of year
2005
P
= 126,105
12,847
–
P
= 138,952
The Company expects to contribute P
= 70 million to its defined benefit obligation in 2007.
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
2006
2005
(Percentage)
48.25
24.12
19.58
8.05
100.00
Investment in FXTN/FRTN
Investment in bonds
Short-term equity investment
Others
45.35
21.93
17.53
15.19
100.00
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.
The principal assumptions used as of January 1, 2006, 2005 and 2004 in determining pension benefit obligations for the
Company’s plans are shown below:
2006
2005
2004
(Percentage)
10.98
10.00
7.00
Discount rate
Expected rate of return on plan assets
Future salary rate increases
13.54
10.00
6.00
11.62
10.00
6.00
Discount rate prevailing as of December 31, 2006 is 7.16%.
Amounts for the current and previous two periods are as follows:
Defined benefit obligation
Fair value of plan assets
Deficit
Experience adjustments on defined
benefit obligation
Experience adjustments on
plan assets
2006
(P
= 853,765)
175,580
(678,185)
2005
(P
= 343,887)
138,952
(204,935)
2004
(P
= 396,936)
126,105
(270,831)
(119,602)
–
48,088
22,597
–
(4,049)
24. COMMITMENTS
Deal Memorandum with DirecTV
On June 1, 2005, 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, internet
protocol technology and satellite master antenna television system or similar system, to display, exhibit, perform and
distribute certain programs of the Parent Company that are listed in the Memorandum. ABS-CBN International may
engage in any marketing plan mutually agreed by both parties and DirecTV may engage in ABS-CBN International. All
costs under any mutually agreed marketing plans shall be shared equally between DirecTV and ABS-CBN International.
As provided in the Memorandum, all rights, title and interest in and to the content, discrete programs or channels not
granted to DirecTV are expressly reserved by the Parent Company. All programming decisions with respect to the
programs shall be in the Parent Company’s commercially reasonable discretion, including the substitution or withdrawal of
any scheduled programs, 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 for the following license fees to be paid by DirecTV to the Parent Company:
a.
A license fee for each existing DTH subscriber of ABS-CBN International or new subscribers who becomes an
activated subscriber during the migration period (from June 2005 to February 2006); and
b.
An additional license fee for each activated subscriber who becomes an activated subscriber during the migration
period that remains a subscriber for 14 consecutive months.
The Memorandum also provides that subscription revenues, computed as the current and stand alone retail price per
month for a subscription to the TFC channel multiplied by the average number of subscribers, shall be divided equally
between DirecTV and ABS-CBN International.
Starting July 2005, existing DTH subscribers of ABS-CBN International have been migrating to DirecTV. License fee
earned from DirecTV amounted to P
= 1,117 million in 2006 and P
= 1,619 million in 2005. ABS-CBN International’s share in
the subscription revenues earned from subscribers that have migrated to DirecTV amounted to P
= 616 million in 2006 and
P
= 93 million in 2005.
On January 17, 2006, the Parent Company and DirecTV agreed to amend the Memorandum entered in June 1, 2005 that
includes among others the extension of the migration period from February 2006 to August 2006.
Operating Lease Commitments - Company as Lessee
The Parent Company and subsidiaries lease office facilities, space and satellite equipment. Future minimum rentals
payable under non-cancelable operating leases are as follows as of December 31:
Within one year
After one year but not more than five years
After five years
2006
P
= 306,035
932,241
455,545
P
= 1,693,821
2005
P
= 291,921
1,184,726
626,252
P
= 2,102,899
Operating Lease Commitments - Company as Lessor
The Parent Company has entered into commercial property leases on its building, consisting of the Parent Company’s
surplus office buildings. These non-cancelable leases have remaining non-cancelable lease terms of between 3 to 5
years. All leases include a clause to enable upward revision of the rental charge on a predetermined rate.
Future minimum rentals receivable under non-cancelable operating leases are as follows as of December 31, 2006 and
2005:
Within one year
After five years
2006
P
= 149,769
186,845
366
P
= 336,980
2005
P
= 117,854
171,297
11,257
P
= 300,408
Obligations Under Capital Lease
The Company has finance leases over various items of equipment. 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:
2006
P
= 136,775
206,872
343,647
50,295
293,352
108,305
P
= 185,047
Within one year
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
2005
P
= 118,984
233,287
352,271
62,326
289,945
88,246
P
= 201,699
25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial instruments, other than derivatives, comprise bank loans, finance leases and cash and
short-term deposits. The main purpose of these financial instruments is to raise funds for the Company’s operations. The
Company has various other financial assets and liabilities such as trade receivables and trade payables, which arise
directly from its operations.
The Company also enters into derivative transactions, including principally interest rate swaps and cross currency swaps.
The purpose is to manage the interest rate and currency risks arising from the Company’s operations and its sources of
finance.
It is, and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall
be undertaken.
The main risks arising from the Company’s financial instruments are cash flow interest rate risk, liquidity risk, foreign
currency risk and credit risk. The BOD reviews and agrees policies for managing each of these risks and they are
summarized below. The Parent Company’s accounting policies in relation to derivatives are set out in Note 2.
Cash Flow Interest Rate Risk
The Company’s exposure to the risk for changes in market interest rates relates primarily to the Company’s long-term
debt obligations with a floating interest rate.
To manage this mix in a cost-efficient manner, the Company enters into interest rate swaps, in which the Company
agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by
reference to an agreed-upon notional principal amount. These swaps are designated to hedge underlying debt
obligations. After taking into account the effect of interest rate swaps, approximately 52% in 2006 and 45% in 2005 of the
Company’s borrowings are at a fixed rate of interest.
Interest Rate Risk
The following table sets out the carrying amount, by maturity, of the Company’s consolidated financial instruments that are
exposed to interest rate risk:
Within
1 Year
1-2 Years
2-3 Years
3-4 Years
4-5 Years
More than
5 Years
Total
2006
Fixed Rate
Floating Rate
P
= 263,634
1,873,505
P
= 290,517
1,483,724
P
= 112,597
529,118
P
= 18,975
–
P
= 2,020
–
P
=–
–
P
= 687,743
3,886,347
2005
Fixed Rate
Floating Rate
P
= 178,973
1,587,171
P
= 231,253
1,438,504
P
= 263,128
1,531,830
P
= 94,911
949,084
P
= 930
–
P
=–
–
P
= 769,195
5,506,589
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on
financial instruments classified as fixed rate is fixed until the maturity of the instrument. 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.
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. Approximately 50% of these obligations are denominated in currencies other than the functional currency of
the operating unit.
The Company enters into cross currency swaps, to manage this risk and eliminate the variability of cash flows due to
changes in the fair value of the foreign-currency-denominated debt maturing more than 1 year.
Other than the debt obligations, 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.
Credit Risk
The Company trades only with recognized, creditworthy third parties. Customers who wish to trade on credit terms are
subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the
result that the Company’s exposure to bad debts is not significant.
With respect to credit risk arising from the other financial assets of the Company, which comprise cash and cash
equivalents, available-for-sale financial assets and certain derivative instruments, the Company’s exposure to credit risk
arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.
Since the Company trades only with recognized third parties, there is no requirement for collateral.
The Company does not have significant concentration of credit risk.
Liquidity Risk
The Company seeks to manage its liquid funds through cash planning on a weekly basis. The Company uses historical
figures and forecasts from its collection and disbursements. As part of its liquidity risk management, the Company
regularly evaluates its projected and actual cash flows. It also continuously assesses conditions in the financial markets
for opportunities to pursue fund raising activities. Also, the Company only places funds in the money market which
exceeded the Company’s requirements. Placements are strictly made based on cash planning assumptions and covers
only a short period of time.
26. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The following table sets forth the carrying values and estimated fair values of consolidated financial assets and liabilities
recognized as of December 31, 2006 and 2005. There are no material unrecognized financial assets and liabilities as of
December 31, 2006 and 2005.
2006
Financial Assets:
Cash and cash equivalents
Trade and other receivables - net
Derivative assets
Available-for-sale investments (included as part
of “Other noncurrent assets”)
Long-term receivable from a related party
Total financial assets
Financial Liabilities:
Interest-bearing loans and borrowings
Derivative liabilities
Total financial liabilities
Carrying
Amount
2005
Fair Value
Carrying
Amount
Fair Value
P
= 1,661,832
4,382,530
12,438
P
= 1,661,832
4,382,530
12,438
P
= 1,751,730
4,651,900
193,305
P
= 1,751,730
4,651,900
193,305
68,426
2,423,392
P
= 8,548,618
68,426
2,423,392
P
= 8,548,618
47,321
2,357,413
P
= 9,001,669
47,321
2,357,413
P
= 9,001,669
P
= 3,951,711
4,574,090
357,920
411,944
P
= 9,295,665
P
= 3,951,711
4,630,763
357,920
414,994
P
= 9,355,388
P
= 3,985,663
6,275,784
103,912
422,402
P
= 10,787,761
P
= 3,985,663
6,582,905
103,912
424,010
P
= 11,096,490
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, Trade and Other Receivables and Trade and Other Payables. Due to the short-term nature of
transactions, the fair values of these instruments approximate the carrying amount as of balance sheet date.
Available-for-sale Investments. The fair values of publicly-traded instruments were determined by reference to market bid
quotes as of balance sheet date. Investments in unquoted equity securities for which no reliable basis for fair value
measurement is available are carried at cost net of impairment.
Long-term Receivable from a Related Party. This is, in substance, equity instruments and, as such, are carried at cost.
Obligations for Program Rights. 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.
Interest-bearing Loans and Borrowings. Fair value was computed based on the following:
Term loan
Other variable rate loans
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.
The interest rates used to discount the future cash flows have ranged from 4.3%
to 5.4% for those that are dollar-denominated and from 4.4% to 12.5% for those
that are peso-denominated.
The face value approximates fair value because of recent and frequent repricing
(i.e., 3 months) based on market conditions.
Principal-only Swaps and Interest Rate Swaps. The fair values were computed as the present value of estimated future
cash flows.
Bifurcated Foreign Currency Forwards.
The fair values of embedded foreign currency forwards were calculated by
reference to forward exchange market rate at balance sheet date.
Derivative Instruments
Cross Currency Swaps. In 2004, the Parent Company entered into long-term cross currency swaps that hedge 100% of
the Tranche A Principal against foreign exchange risk. The long-term principal-only currency swaps have an aggregate
notional amount of US$42 million as of December 31, 2006 and 2005 and a weighted average swap rate of P
= 56.01 to
US$1. Under these agreements, the Parent Company effectively swaps the principal amount of certain US dollardenominated loans under the SCA into Philippine peso-denominated loans with payments up to June 2009.
The Company is also obligated to pay swap costs based on a fixed rate of 8.0% on a notional amount of P
= 353 million,
5.125% on a notional amount of P
= 55 million, 3-month PHIREF minus 2.9% on a notional amount of P
= 2 billion and 3-month
PHIREF minus 3.1% on a notional amount of P
= 264 million.
Currently, the aggregate notional amount is 13% more than the underlying debt instrument. This is a result of a portion of
the cross currency swap not being unwound when the company prepaid a portion of the loan in 2006. The excess is
currently marked to market and directly reported to the profit and loss.
The execution copies of the agreement amending the SCA facility, will allow the reinstatement of the amount prepaid in
2006. While this will cure the current over-hedge position of the underlying instrument, the mark to market gain or loss
that may be derived will continue to be immediately reported to the profit and loss until it matures in June 2009.
Interest Rate Swaps. To manage the interest rate exposure from the floating rate loans, the Company also entered into
USD interest rate swaps and PHP interest rate swaps which effectively swap certain floating rate loans into fixed-rate
loans. These USD interest rate swaps and PHP interest rate swaps have an aggregate outstanding notional amount of
US$32 million and P
= 394 million as of December 31, 2005, respectively, with payments up to September 2006 and March
2008.
As of December 31, 2006, the USD interest rate swaps have an aggregate outstanding notional amount of
US$19.4 million, while the PHP interest rate swaps have matured in September 2006.
The terms of the USD and PHP interest rate swap agreements are as follows:
December 31, 2006
Outstanding Notional Amount
US$19,377
Maturity
2008
Receive
3-Month LIBOR + 3.5%
Pay
7.18%
Maturity
2008
2006
Receive
3-Month LIBOR + 3.5%
PHIREF + 3.5%
Pay
7.18%
14.40%
December 31, 2005
Outstanding Notional Amount
US$31,620
PHP391,918
Hedge Accounting Implications of Swaps. The Parent Company’s principal-only currency swaps and USD interest rate
swap are designated as cash flow hedges on October 1, 2005, to manage the Parent Company’s exposure to variability in
cash flows attributable to foreign exchange and interest rate risks of the underlying debt obligations. Since the critical
terms of the swaps and the outstanding debt obligations coincide, the hedges are expected to exactly offset changes in
expected cash flows due to fluctuations in foreign exchange and the prime rate over the term of the debt obligations.
From October 1, 2005 up to December 31, 2005, the effective net mark-to-market losses that have been deferred in
equity for these cash flow hedges amounted to P
= 53 million (P
= 34 million, net of tax). Prior to designation as cash flow
hedges, the principal-only currency swaps accounted for mark-to-market losses in the consolidated statement of income
of about P
= 32 million (net of P
= 316 million gain on the swap differentials), while the USD interest rate swap accounted for
mark-to-market gains in the consolidated statement of income of P
= 48 million.
The effective net mark-to-market losses that have been deferred in equity for these cash flow hedges amounted to
P
= 249 million (P
= 163 million, net of tax) in 2006.
As part of the transition adjustments as of January 1, 2005, the Company initially recognized an aggregate amount of
P
= 117 million (P
= 76 million net of tax), representing the fair value for the principal-only currency swaps (net of the impact of
the foreign exchange restatement) and the USD and PHP interest rate swaps. This amount is initially recorded as a credit
adjustment in CTA (‘initial CTA’) and will be amortized using the effective interest method over the remaining term of the
underlying related loans. For the year ended December 31, 2006 and 2005, the amortization of the initial CTA amounted
to P
= 31 million and P
= 32 million, respectively and is recorded as a reduction in interest expense (see Note 21).
In 2006, the Company made a reassessment of its outstanding cross currency swap and interest rate swap. The
valuation of each swap transaction was remeasured to confirm with the values derived by each of the counterparties to
the hedges. This recalibration resulted in the increase of the derivative liability and decrease of the derivative asset by
P
= 105 million and P
= 26 million, respectively in 2006. The aggregate total of P
= 132 million was then recorded in equity and
will be transferred to the consolidated statement of income when the hedge transaction affects profit or loss.
Embedded Derivatives. As of December 31, 2006 and 2005, the Company has outstanding embedded foreign currency
derivatives which were bifurcated from various non-financial contracts. The impact of these embedded derivatives is not
significant.
As discussed in Note 8, the Parent Company has a receivables from Sky Vision that is convertible into the latter’s
common share, which are not quoted in an active market. The conversion option embedded in the receivable is not
separately accounted for as a financial asset at fair value through profit and loss. The entire receivable from Sky Vision is
reported at cost subject to impairment.
The table below summarizes the fair values of derivative instruments (both freestanding and embedded) as of
December 31, 2006 and 2005:
2006
Cross currency swaps
Interest rate swaps
Embedded derivatives
Total
Derivative
Asset
P
=–
11,340
1,098
P
= 12,438
2005
Derivative
Liability
P
= 357,695
–
225
P
= 357,920
Derivative
Asset
P
= 129,270
62,774
1,261
P
= 193,305
Derivative
Liability
P
= 103,688
–
224
P
= 103,912
27. 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.
The following table presents information necessary to calculate EPS:
(a) Net income attributable to equity holders of parent
(b) Weighted average shares outstanding
At beginning of year
Issuances (see Note 16)
At end of year
Basic/Diluted EPS (a/b)
2005
P
= 251,731
2004
P
= 734,250
769,583,312
93,244
769,676,556
769,583,312
–
769,583,312
769,583,312
–
769,583,312
P
= 0.962
P
= 0.327
P
= 0.954
2006
P
= 740,552
The Company has no dilutive potential common shares outstanding, therefore basic EPS is the same as diluted EPS.
28. NOTE TO STATEMENTS OF CASH FLOW
Noncash investing and financing activities:
Acquisition of program rights on account
Acquisition of property and equipment under
capital lease
Payment of bonus through the issuance of PDRs
Acquisition of property and equipment on account
Acquisition of property and equipment as settlement
of trade receivables
2006
2005
2004
P
= 393,736
P
= 265,852
P
= 315,284
118,004
22,379
–
166,077
–
81,466
82,244
–
21,100
–
44,280
–
29. OTHER MATTERS
a.
In 1972, the Parent Company discontinued its operations when the government took possession of its property and
equipment. In the succeeding years, the property and equipment were used without compensation to the Parent
Company by Radio Philippines Network, Inc. (RPN) from 1972 to 1979, and Maharlika Broadcasting System (MBS)
from 1980 to 1986. 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, another government entity. In 1986, the Parent
Company resumed commercial operations and was granted temporary permits by the government to operate several
television and radio stations.
The Parent Company, together with Chronicle Broadcasting System, filed a civil case on January 14, 1988 against
Ferdinand E. Marcos and his family, RPN, MBS, et. al, before the Sandiganbayan to press collection of the unpaid
rentals for the use of its facilities from September 1972 to February 1986 totaling P
= 305,400 plus legal interest
compounded quarterly and exemplary damages of P
= 100,000.
The BOD resolved on June 27, 1991 to declare as scrip dividends, in favor of all stockholders of record as of that
date, whatever amount that may be recovered from the foregoing pending claims and the rentals subsequently
settled in 1995. The scrip dividends were declared on March 29, 2000. In 2003, additional scrip dividends of
P
= 13,290 were recognized for the said stockholders.
On April 28, 1995, the Parent Company and the government entered into a compromise settlement of rental claims
from 1986 to 1992. The compromise agreement includes payment to the Parent Company of P
= 29,914 (net of the
government’s counterclaim against the Parent Company of P
= 67,586) by way of tax credits or other forms of noncash
settlement as full and final settlement of the rentals from 1986 to 1992. The TCCs were issued in 1998.
b.
The Company has contingent liabilities with respect to claims and lawsuits filed by third parties. The events that
transpired last February 4, 2006, 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, which did not result in
any direct or contingent financial obligation that is material to the Company. The Company has settled all of the
funeral and medical expenses of the victims of the tragedy. Given the income flows and net asset base of the
Company, said expenses do not constitute a material financial obligation of the Company, as the Company remains
in sound financial position to meet its obligations.
As of March 28, 2007, the claims in connection with the events of February 4, 2006 are still pending and remain
contingent liabilities. While the funeral and medical expenses have all been shouldered by the Company, there still
exist claims for compensation for the deaths and injuries upon evaluation of these claims, the amount of which have
not been declared and cannot be determined with certainty at this time. Management is nevertheless of the opinion
that should there be any adverse judgment based on these claims, this will not materially affect the Company’s
financial position and results of operations.
c.
Accrued pension obligation in the 2005 consolidated financial statements was reclassified from “Trade and other
payables” account to noncurrent liabilities to conform to the 2006 presentation.
AR 2006.indd 68-69
4/24/07 8:12:33 AM
MANAGEMENT COMMITTEE
First Row (Standing L to R): Raffy Lopez, Gabby Lopez,
Charo Santos-Concio, March Ventosa, Menchi Orlina, Mariole Alberto
Second Row (Seated L to R): Cory Vidanes, Fred Bernardo,
Leng Raymundo, Philbert Berba, Monchet Olives, Cedie Vargas, Bonbon Jimenez, Mark Nepomuceno
Johnny Sy, Robert Labayen, Mike Navarrete, Thelma San Juan, Ernie Lopez, Chinky de Jesus, Chit Guerrero, Paolo Pineda
First Row (Standing L to R): Raffy Jison, Vivian Tin, Gina Lopez, Bong Osorio, Jeff Remigio
Ron Valdueza, Deo Endrinal, Billy Ick, Egay Garcia, Rick Hawthorne, Joanna Santos
Second Row (Seated L to R): Luchi Cruz-Valdez, Charie Villa,
Maria Ressa, Raul Bulaong, Enrico Santos, Leo Katigbak, Maxim Uy, Buda Nubla, Olive Lamasan, Peter Musñgi, Malou Santos,
Myrna Segismundo, Lauren Dyogi, Alden Castaneda, Annabelle Regalado, August Benitez, Johnny Manahan
AR 2006.indd 70-71
4/24/07 8:12:45 AM
15th ANNUAL KBP GOLDEN DOVE AWARDS
“Ka Doroy” Broadcaster of the Year Award
Best Television Station
Best AM Radio Station
Best TV Newscast Best TV Public Affairs Program
Best TV Variety Program
Best TV Comedy Program
Best TV Drama Program
Best TV Children’s Program
Best TV Culture and Arts Program
Best TV Public Service Announcement
Best Station Promotional Materials on TV
Best TV Newscaster
Best TV Field Reporter
Best Radio Newscast
Best Radio Comedy Program
Best Radio Science & Technology Program
Best Station Promotional Materials on Radio
Best Radio Newscaster
Best Public Affairs Program Host
Best Radio Public Service Program Host
Best Radio Variety Program Host
28th CATHOLIC MASS MEDIA AWARDS
Television
Best News Magazine
Best Drama Series/Program
Best Comedy Program
Best Talk Show
Best Sports Show
Best Adult Educational/Cultural Program
Best Special Event Coverage
Special Citation
Best Public Service Program
Radio
Best News Program
Best Business News or Feature
Best Sports Program
Best Educational Program
Music
Best Album - Secular
PMPC STAR AWARDS 2007
Best Musical Variety Show Best Male TV Host
Best Female TV Host
Best New Male Personality
Best Drama Anthology
Best Single Performance by an Actor
Best Single Performance by an Actress
Best Drama Series
Best Drama Actor
Best Drama Actress
Best Educational Program
Best Horror/Fantasy Program
Best News Program
Best Male Newscaster
Best Magazine Show
Best Magazine Show Host
Best Morning Show
Best Morning Show Hosts
Best Documentary Program
Best Documentary Program Hosts
Best Celebrity Talk Show
Best Celebrity Talk Show Host
Best Showbiz-Oriented Talk Show
Best Male Showbiz-Oriented Talk Show Host
Best Female Showbiz-Oriented Talk Show Host
Best Game Show
as of January 31, 2007
Angelo Castro
Channel 2 - Manila
DYAB-am Cebu
News Central - Studio 23 (Amcara Bctg. Network)
Probe
Little Big Star
Goin’ Bulilit
Maalaala Mo Kaya “Regalo”
Okiddo - DXAS TV4 Davao (ABS-CBN)
Paano Kita Mapasasalamatan
(A Tribute to George Canseco)
Flicker
Everest “Kaya ng Pinoy”
Mari Kaimo - News Central - Studio 23
Kharen Serra - DXAS TV4 Davao
Radyo Patrol Balita Alas Siyete - DZMM-am 630 kHz
Rated R - DYAB-am 1512 kHz. Cebu
Bago ‘Yan Ah! - DZMM-am 630 kHz.
MOR Wrong-Correct Plugs DYOO-fm 101.5 Bacolod City
Ted Failon - DZMM-am 630 kHz
Korina Sanchez - DZMM-am 630 kHz
Joey Lina - DZMM-am 630 kHz
Winnie Cordero - DZMM-am 630 kHz
Rated K! Handa na ba kayo?
Maging Aking Muli – DYAC TV3 Cebu
Quizon Avenue
Y Speak
Sports Unlimited
Kunin Mo O Diyos
EDSA 1986: Mga Tinig ng Himagsikan
Nagmamahal, Kapamilya
Radyo Patrol Balita - DYAB Cebu
Radyo Negosyo
Sports Talk
Bago Yan Ah!
Pure Hearts by Gary V. - Star Records
ASAP ‘06
Luis Manzano
Toni Gonzaga
Sam Milby
Maalaala Mo Kaya
Carlo Aquino
Vilma Santos
Sa Piling Mo
Diether Ocampo
Maricel Soriano
Kumikitang Kabuhayan
Komiks
TV Patrol World
Julius Babao
Rated K
Korina Sanchez
Magandang Umaga Pilipinas
Julius Babao, Christine Bersola-Babao
and Bernadette Sembrano
The Correspondents
Karen Davila and Abner Mercado
Homeboy
Boy Abunda
The Buzz
Boy Abunda
Kris Aquino
Pilipinas, Game K N B?
SOUTHEAST ASIAN FOUNDATION FOR CHILDREN’S TELEVISION - ANAK TV SEALS
ABS-CBN
Art Jam
Barney and Friends
John en Shirley
Kabuhayang Swak na Swak
Pilipinas Game K N B?
Rated K
Salamat Dok
Sanrio World of Animation
The New Adventures of Madeline
Wansapanataym
Studio 23
AR 2006.indd 72-73
6th National Quiz Bee
700 Club Asia
7th Heaven
Breakfast
Gameplan
Math Tinik
Postman Pat
Sineskwela
Sports TV
The Key of David
Y Speak
Most Well-Liked Television Personalities
Most Well-Liked Programs
EXECUTIVE OFFICE
Chairman & Chief Executive Officer Vice Chairman
Head, Security
EUGENIO L. LOPEZ III
AUGUSTO ALMEDA-LOPEZ
CIPRIANO M. LUSPO
BUSINESS DEVELOPMENT
Business Development & Special Projects Officer
Assistant Vice President, International Program Development
JOSE RAMON D. OLIVES
CARLOS P. AGUSTIN
Aga Muhlach
Gary Valenciano
Jericho Rosales
Julius Babao
Piolo Pascual
Sam Milby
Bea Alonzo
Bernadette Sembrano
Christine Bersola-Babao
Judy Ann Santos
Korina Sanchez
Kristine Hermosa
Sarah Geronimo
Sharon Cuneta
CORPORATE COMMUNICATIONS DIVISION
Chief Corporate Communications Officer
RAMON R. OSORIO1
PROPERTY MANAGEMENT GROUP
Vice President for Property Management General Manager, Studio Tours & Shop
MARISSA L. NUBLA
LAURO L. PANGANIBAN
Media Asset Management
Director, Central Library & Archives Manager, Film Archives
Manager, Central Library & Archives Manager, Central Library & Archives ADORACION G. CAMACHO
MA. LUISA C. DEL PILAR
KATHERINE JENNIFER P. SOLIS
JAYSON S. LABUDAHON
Administration & Services
Director, Administration & Services ADELINE SUSAN C. CARAG
Bituing Walang Ningning
Game K N B?
Gulong ng Palad
Rated K
Sa Piling Mo
TV Patrol
CHANNEL 2 MEGA MANILA DIVISION
Managing Director
MA. ROSARIO N. SANTOS-CONCIO
UP COMMUNITY BROADCASTERS’ SOCIETY
“Gandingan 2007: UPLB Isko’t Iska’s Broadcast Choice Awards”
Best TV Station
ABS-CBN Channel 2
Best Development-Oriented TV Station
ABS-CBN Channel 2
Best AM Radio Station
DZMM-am Radyo Patrol 630
Best FM Radio Station
DWRR-fm 101.9
Best Radio Jock
Martin D (DWRR 101.9)
Most Development-Oriented TV Program
Y Speak (Studio 23)
Most Development-Oriented Radio Station
DZMM-am Radyo Patrol 630
Most Development-Oriented Radio Program
Tambalang Failon at Sanchez
Best News Program
TV Patrol World
Best Magazine Program
Rated K
Best Talk Show
Homeboy
Best Newscaster
Korina Sanchez
Best Magazine Program Host
Korina Sanchez
Best Public Affairs Program Host
Karen Davila
Best Public Service Program Host
Bernadette Sembrano
Best Talk Show Host
Boy Abunda
Best Panel Discussion Program
Y Speak (Studio 23)
Best Music Program
Myx (Studio 23)
Best Video Jock
Iya Villania (Myx)
2006 LA SALLIAN SCHOLARUM AWARDS
Best Televised Feature Story on Youth and Education
Finalists Tugdaan (Adrian Ayalin, The Correspondents)
Kayod Eskwela (Gigi Grande, The Correspondents)
Text on Air (Gigi Grande, The Correspondents)
2006 PRSP ANVIL AWARDS
Award of Merit
Sikapinoy – DZMM-AM 630 kHz
2006 DOST MEDIA AWARDS
Institutional Awardee for Radio
DZMM-AM 630 kHz
48th NEW YORK FESTIVAL
Silver - Best News Magazine Program
Silver - Best Newscast
Finalist - Best News Promotion (Special Series)
The Correspondents: “Rugby”’
The First Philippine Mount Everest Expedition
First Philippine Mt. Everest Expedition
2006 PROMAX WORLD GOLD AWARDS
Finalist
Lipad Ng Pangarap
ARAW VALUES AWARDS 2006
Platinum, Advocacy - Multimedia Silver, Advocacy – Single Medium Silver, Branded - Multimedia Bronze, Advocacy – Single Medium “Flag Campaign”
“Flicker”
“Everest: Kaya ng Pinoy”
“Bra”
ASIAN TV AWARDS 2006
Best Current Affairs Programme, Runner-Up
Best Current Affairs Programme,
Highly Commended
Best Entertainment Presenter,
Highly Commended
Best News Programme, Finalist
The Correspondents - “Juvenile Injustice”
XXX
Sharon Cuneta for Sharon
TV Patrol World
Programming & On-Air, Licensing, Synergy, Content Monitoring and Development
Head, Programming & On-Air Operations, Licensing, Synergy, FLORIDA C. TAN
Content Monitoring & Development Group
Head, Programming & On-Air Operations
MARIA CRISTINA R. AMARILLE
Head, Licensing KAREN EVE C. COLOMA
Acquisitions
Head, Program Acquisitions
Manager, Program Acquisitions
Executive Producer, Program Acquisitions
Sales
Head, Channel 2 Sales Head, Strategic Sales Planning Unit
Head, Channel 2 Sales - Group 1
Head, Channel 2 Sales - Group 4 Head, Channel 2 Sales - Group 5 Head, Channel 2 Sales - Group 6 Head, Channel 2 News & Current Affairs Sales/ ABS-CBN News Channel Manager, Strategic Sales Planning Manager, Strategic Sales Planning Manager, Strategic Sales Planning Manager, Customer Development Group - Admin EVELYN D. RAYMUNDO
MA. LOURDES D. BAUTISTA
NARISSA A. CALINAWAN
JOSE AGUSTIN C. BENITEZ, JR.
ALDEN ALFONSO M. CASTAÑEDA
RONALDO M. MERINO
ELVIRA VICTORIA M. ECHAUZ-ANGARA
RUBY ANGELA P. APELO
ANNE MARIE S. LIM
JENNY VERONICA M. SERRANO
MABELLE FLOR R. DEL MUNDO
YVETTE JEANNE W. NOVENARIO
MARIS AGATHA M. AGUINALDO
MICHELLE L. GATLABAYAN
MAXIMILIAN N. HONG
BERNADETTE M. BLANCO
Creative Communication Management
Head, Creative Communication Management
Head, Creative Account - Entertainment Head, Creative Production Group
Head, Creative Account - News & Current Affairs, ANC & Radio
Head, Creative Account - RNG
Head, Creative Account - Entertainment Head, Creative Account - Entertainment Head, Creative Account - Entertainment Head, Creative Account - Entertainment Head, Creative Account - Manila Radio & NCAG
Head, Creative Account - Entertainment, Sports and News Head, Editing & Post-Production Head, Creative Account - Corporate Image & Special Events Head, Creative Account - ANC
Head, Print Graphics and Design ROBERTO G. LABAYEN
PATRICK ARIEL L. DE LEON
JOHNNY S. DE LOS SANTOS
IRA VINCENT G. ZABAT
MA. CHRISTINA M. BARBIN
RODA F. BALDONADO
EDSEL P. MISENAS
FELIX NATHANIEL C. NAFARRETE
KATHRINA V. SANCHEZ
FAITH J. ZAMBRANO
JORDAN H. CONSTANTINO
JONATHAN M. CAPILO
DANIE ROSE SEDILLA-CRUZ
RONALDO G. CRUZ
CARMELO B. SALIENDRA
Talent Development & Management Center
Senior Vice President, Talent Development & Mgmt. Center Vice President, Talent Center
Director, Talent Center Operations Director, Talent Center Senior Manager, Talent Center Manager, Public Relations & Publicity Manager, Talent Manager, Talent Manager, Finance JUAN L. MANAHAN
MA. YOLANDA R. ALBERTO
LOURDES M. ROMERO
MA. RAMONA INES R. NOVALES
CRISELDA T. NAVARRO
VERONICA I. DYLIM
MELINDA LOVE A. CAPULONG
ALAN M. REAL
EDILBERTO TITO C. CAPULONG II
TV PRODUCTION DIVISION
Managing Director
Head, TV Production Business Unit Head, TV Production Business Unit Head, TV Production Business Unit
Head, TV Production Operations
MA. SOCORRO V. VIDANES
LAURENTI M. DYOGI
ROLDEO THEODORE T. ENDRINAL
JOAQUIN ENRICO C. SANTOS
JOANNA G. SANTOS
Head, TV Production Business Unit – Special Projects
Head, TV Production Business Unit
Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Executive Producer Manager, Operations Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production Manager, Production CARMENCITA A. GUERRERO
MARILOU A. ALMADEN
LUIS L. ANDRADA
CATHERINE PATRICE O. PEREZ
ALBERT B. ALMADEN
PHOEBE LUZ D. ANIEVAS
NINI PATRICIA C. AQUINO
MARIA CHRISTINA P. BALUYUT
NOEMI M. BON
GRACE ANN B. CASIMSIMAN
RODORA FELISA C. DE LA CERNA
JOAN D. DEL ROSARIO
JESSICA A. FABELICO
ESTERBELLE F. FRANCISCO
MARVI M. GELITO
MARK ANTHONY D. GILE
MERCEDITA T. GONZALES
NARCISO Y. GULMATICO, JR.
DESIREY F. JUAN
JEANNE KARLA R. MANALO
MORLY STEWART A. NUEVA
SHIELA MARIE A. OCAMPO
MARIA VICTORIA H. ODUCAYEN
MARLITO S. REJANO
LEON A. ROLDAN III
EMILIO PAUL E. SIOJO
EMERALD C. SUAREZ
LOURDES D. TANWANGCO
RACQUEL B. UBANA
DARNEL JOY R. VILLAFLOR
NANCY B. YABUT
MYLENE ANTONETTE Q. MALLARI
JULIE ANNE R. BENITEZ
MA. ROWENA R. BENITEZ
RAYMUND G. DIZON
RIZALINA G. EBRIEGA
ETHEL M. ESPIRITU
ANNALIZA A. GOMA
CYNTHIA D. JORDAN
JOYCE A. LIQUICIA
BENITA S. MATILAC
GINNY M. OCAMPO
GIA NINA G. SUYAO
EMMA V. VILBAR
NEWS & CURRENT AFFAIRS DIVISION
Managing Director
MARIA A. RESSA
Current Affairs
Head, Current Affairs
Head, Production Unit (Current Affairs)
Executive Producer
Executive Producer
LUISITA C. VALDES
MARIQUIT A. GONZALEZ
CLEON LESTER G. CHAVEZ
ANNA LIZZA R. RODRIGUEZ
CHERYL C. FAVILA
JONAS H. LIWAG
Newscast
Supervising Producer
Executive Producer
Executive Producer
Executive Producer
LILIBETH SOCORRO F. DELA CRUZ
JOSE A. CABURNIDA
FERNANDO M. GARCIA
ENGELBERT C. APOSTOL
Newsgathering
Head, Newsgathering Head, Desk - Futures
Chief Correspondent, Philippine & Global Operations
Chief, European News Bureau
Chief, Middle East News Bureau
Editor-in-Chief, Business News
Head, Regional News Bureau
Head, Day of Coverage Morning
Head, Day of Coverage Evening
Head, Entertainment News
Head, News Features
Head, Studio 23 News
Desk Editor
Desk Editor
Desk Editor
Desk Editor
Desk Editor, Business
Executive Producer
Senior Correspondent
Senior Correspondent - Sports
Correspondent
Correspondent
Correspondent
Correspondent
Correspondent
Correspondent
Correspondent
ROSARIO SOFIA S. VILLA
DAVID JUDE L. STA. ANA
KORINA B. SANCHEZ
DANIEL K. BUENAFE
FERNANDO A. SANGA
CARMINA R. ROMERO
PHILIP STANLEY A. PALISADA
FERNANDO A. ABOGA JR
CLAUDE NORMAN M. VITUG
MARIO V. DUMAUAL
MARCELO L. PONTI, JR.
VICENTE O. RODRIGUEZ
DANILO P. LUCAS
JOCELYN T. GRUTA
ANNA LIZA L. EUGENIO
MONICA E. LACHICA
MA. CONCEPCION I. DUMO
GIDGET CECILLE V. ALIKPALA
HENRY C. OMAGA
CECILIA O. DRILON
AUGUSTO G. ABELGAS
DIANE C. GARCIA
JULIUS CAESAR C. BABAO
ALADIN M. BACOLODAN
ANTONIO VICTOR T. VELASQUEZ
LYNDA J. ABALOS
NADIA MARIE T. BANAGUDOS
KAREN D. STA. ANA
ABNER P. MERCADO
4/24/07 8:12:46 AM
News Engineering
Head, Camera Operations
Head, Editing Operations
Head, Engineering Van & On-Air Operations
Head, Media Management
Head, On-Air Operations
Head, Digital Newsgathering Group
CONRADO M. PALILEO
ARMAND DEREK N. SOL
CARLOS S. TOLENTINO
FRANCISCO L. ALEJANDRO
K P. VILLAROYA
MELISSA A. DELA MERCED
Business Development Group
Head, Business Strategy & Programming
Head, Business Development
Head, Business News & Interstitials
Head, Special Projects MARY JEANE M. LARANAS
MARIA VICTORIA CILETTE L. CO
KAREN GAYLE M. PUNO
MARY ANN R. PURIFICACION
ABS-CBN News Channel
Managing Director (Concurrent)
Chief Operations Officer
Manager, Operations Head, Channel Operations
Executive Producer
MARIA A. RESSA
JUDITH A. TORRES
PAULINE MARIE G. HALILI
ARLYN D. ARINES
MARIA ELENA MANOLITA G. CATBAGAN
MANILA RADIO DIVISION
Managing Director
Station Manager, DZMM
Manager, DZMM - Programming & Production Services
Manager, DZMM Radyo Patrol
Station Manager, DWRR
Manager, Research & Monitoring Group
Manager, News & Information Center
Manager, Special Projects
Head, Manila Radio Sales
PETER A. MUSÑGI
ANGELO B. PALMONES
MA. MARAH F. CAPUYAN
ANGELO V. ALMONTE
ELI BRUCE A. CAPUYAN
GINA C. ABELLERA
ALONA M. LINDSTROM
MAY CATHERINE V. CENIZA
EMMANUEL D. TADEO
Sports Division
Production Manager Head, Sports Sales
PETER A. MUSÑGI
JENNIFER F. JIMENEZ
GEOFFREY D. GARCIA
REGIONAL NETWORK GROUP
Managing Director
Head, Mindanao Cluster Head, Visayas Cluster & Overall Radio
Head, Luzon Cluster
Director, Channel Development - RNG
Senior Finance Officer, Regional Network Group
Manager, TV Production
Manager, Festival Events Group
Manager, RNG News
Manager, Luzon Promo - News & Entertainment
Head, RNG Sales
ROLANDO P. VALDUEZA
LOUIS BENEDICT O. BENNETT
ATTY. ABIGAIL E. QUERUBIN
IRENE C. COPIOZO
EMILY B. BARCELON
MICAELA D. LABAGUIS
CHRISTIE N. GARCIA
MICHELLE ANN S. KU
STANLEY PALISADA
WOODROW A. FRANCIA
AMALIA ENCARNACION H. BAUTISTA
RNG – Luzon Cluster
Area Manager, North Central Luzon Area Manager, South Luzon (Naga & Legaspi)
Station Manager, Laoag
Station Manager, Baguio, Isabela & Tuguegarao Head, Lucena Sales Center
Head, Cabanatuan Sales Center
OIC – Batangas Sales Center & Olongapo Sales Center
OIC – Tarlac & Pampanga Sales Center
GEMMA Q. CACAS
AMALIA G. VILLAFUERTE
REMEDIOS I. ROCA
BERNARDO D. ALDANA
LODICIA R. JALAGO
GIL DONATO V. VIOLAGO
JOSE C. DE CASTRO
DOLORES T. LINGWA
RNG – Visayas Cluster Area Head, Central Visayas (Cebu & Dumaguete)
Manager, Roxas & Kalibo Sales Center
Station Manager, Bacolod
Station Manager, Iloilo
Manager, Marketing
Manager, Cebu Radio - News
Manager, Cebu TV - News
VENERANDA C. SY
JOANNE BEATRIZ R. DADIVAS
LEILANI S. ALBA
CHARIE MAY LYN G. ILON
MA. DESIREE D. BRETANA
LEO A. LASTIMOSA
RODA N. UY
RNG – Mindanao Cluster
Area Manager, General Santos, Cotabato, Koronadal
Area Manager, Northern Mindanao (Cagayan De Oro, Iligan & Butuan)
Station Manager, Davao
Manager, Davao TV - News
Station Manager, Zamboanga
OIC – Dipolog Sales Center
BROADCAST ENGINEERING DIVISION (BED)
Managing Director
Head, Broadcast Digital Operations
Head, TOC & Transmitter Operations
Head, Broadcast Engineering Support Services
Head, Technical Operations Center
Senior Manager, Regional Engineering
Senior Manager, Network Special Action Team
Manager, Network Special Action Team
Manager, Mindanao Cluster, Regional Engineering
Manager, Manila Transmitter Operations
Head, Broadcast Quality Management
Head, Engineering Research & Development
AR 2006.indd 74-75
ANNIE S. GACAYAN
ALEXANDER T. MARTINEZ
TRISHA E. CORPUS
ARTURO C. BONJOC JR.
SORAIDA EDRIS
KIRSTEEN MILES B. RUT
RUBEN R. JIMENEZ
DEOGRACIAS S. JORDAN
JOSE RIZALDE M. UMIPIG
BERNARDO M. ACOSTA
ERWIN RAYMUND C. MALIMBAN
MELVIN C. ACOSTA
FRANKLIN V. MIRA
ARMANDO G. ARMADA
ALVIN A. DE ASIS
RODOLFO M. HERRERA JR.
ALEXANDER I. CACHOLA
MAPAGTAPAT A. ONGCHANGCO III
TECHNICAL PRODUCTION OPERATIONS DIVISION (TPO)
Managing Director
Manager, Technical System
Manager, Technical Director & Video Operations
Manager, Camera & Lighting Operation
Head, TPO Account Management
Head, Visual Effects
Head, Technical Producer
Head, Animation
RAUL PEDRO G. BULAONG
SANTOS C. BAUTISTA
NEMESIO V. ROQUE
BENJAMIN P. YSIP
EDWIN S. MENDOZA
LEONARDO M. BARBIN
MELANIE E. FERNANDEZ
MARIA GUIA JULIA U. JOSE
MARKETING
Chief Marketing Officer
Head, Program Marketing Channel 2
Head, Customer Marketing Channel 2
Head, Production Services
Head, Media Planning
Head, Creative Services
Head, Marketing - Studio 23
Manager, Customer Marketing - CH2
Manager, Events
Manager, Trade Promo
ANTONIO S. VENTOSA
MA. ZITA T. ARAGON
TERESITA L. VILLAREAL
JONATHAN MARTIN A. MONTELIBANO
FERDINAND B. MARCOS
JENNIFER ANNE T. DE LOS SANTOS
RALPH MARVIN M. MENORCA
MARJORIE ANN L. SO
ALVARO DAN S. MORGA
CHARI ANN M. SONGSONG
JUN I. MARTINEZ
CHARINA O. CLEMENTE
MARCELO M. MIRANDA
ERLPE JUNN G. ORENZA
MARION F. MARTINEZ
RESEARCH & BUSINESS ANALYSIS DIVISION
Chief Research & Business Analysis Officer
Head, Corporate Planning
Head, Subsidiaries & Business Research
Head, NCA & Radio Research
Head, Ratings, Entertainment & Regional Research
Head, Subsidiaries Research
Head, Data Systems
Head, Regional & TV Entertainment Research
Head, Fundamentals & TV Entertainment Research
VIVIAN Y. TIN
PAMELA ANN P. DA SILVA
RUTHIE A. FLORESTA
OLIVA M. CARANDANG
LIZA A. ALETA
SORAYA VIRGINIA V. PARLADE
EVANGELINE P. BAYLON
MARIA DIVINIA J. BERNARDO
MELINDA M. MARCELO
FINANCE DIVISION
Chief Finance Officer
MIGUEL JOSE T. NAVARRETE
AVP, Comptrollership
ESPERANZA P. ARMONIA
Director, Systems, Methods & Operations Management
MARIA PAZ JIMENEZ-BALAYAN
Director, Financial Accounting Services
ANA LIZA A. ESPIRITU
Director, Budget, Business Analysis & Investor Relations
LYRA GAY C. FAJARIT
Director, Finance - Entertainment
MA. ENNA L. SANTOS
Director, Finance - Entertainment
MADONA ANGELYN S. GARRIDO
Director, Finance - News & Current Affairs/ANC
JAY FRANCIS Q. SANTOS
Senior Manager, Treasury & Collection
PAUL MICHAEL V. VILLANUEVA, JR.
Senior Manager, Systems, Methods & Operations Management
JACQUELINE SANTOS-PEREZ
Senior Finance Officer, Regional Network Group
MICAELA D. LABAGUIS
Senior Finance Officer, Broadcast Engineering, ELSIE SHAFER-CAPIZ
Technical Production Operations & Logistics
Senior Finance Officer, Support Group 2 Financial Operations
ROLANDO G. CRUZ
Senior Finance Officer, Manila Radio & Sports Division
ARLENE GONZALES-NEGRO
Senior Finance Officer, Sales & Marketing
MARY GRACE S. SAROL
Manager, Financial Reporting
LEONILA H. CRUZ
Manager, Accounts Payable, Asset & Insurance Accounting
MONINA TERESA S. FERRER
Manager, Revenue Accounting
MELANIE E. PEDRON
Manager, Subsidiary Accounting
MARILOU P. ORDONEZ
Manager, Systems, Methods & Operations Management
WILHELM DAVID-REMOTIGUE
Head, Broadcast Traffic Operations
MA. CATHLEYA D. BALUGA
HUMAN RESOURCES DIVISION
Chief Human Resources Officer Head, Account Management Head, Account Management Head, Systems - OMP Group Head, Account Management Head, HR Special Projects Head, Account Management Head, Account Management Head, Recruitment & IJM Systems Head, HR Operations Head, Account Management Head, Account Management Head, Account Management
Head, Account Management
Head, Account Management Head, Account Management Head, Design, HR Systems - Compensation & Benefits Head, Compensation System Global Head, Compensation Systems, Subsidiaries & Programs
Head, Employee & Labor Relations Manager, Payroll & Compensation - Regular Manager, Payroll & Compensation - Talent PHILIP LAMBERTO L. BERBA
LOURDES C. ABRILLO
LUZVIMINDA A. MORALES
ERNILDA L. BAYANI
ELEANOR HENEDINE S. LAURENA
MA. VICTORIA L. NUGUID
MA. ASUNCION A. PALMERO
LIBERTAD G. PASCUAL
JOVELYN C. SY
RAUL D. VELASCO
LORELEI A. BADAR
MARICEL C. BENITEZ
DANILO E. DE GUZMAN
MARIPOSA I. DE GUZMAN
MARY ANN M. MUNOZ
CONCEPCION ISABEL G. TORIO
CATHERINE D. MARCELO
GENEVIE O. MENDOZA
MA. ROSARIO LILIA D. SEMANA
MARIA LUZ B. YAN
GILDA MOIRA F. MATIENZO
MANUEL A. PANGILINAN JR
ORGANIZATION DEVELOPMENT & LEARNING
Chief Organization Development & Learning Officer Head, Learning Technologies
MARIO CARLO P. NEPOMUCENO
ARLENE D. TICZON
INFORMATION TECHNOLOGY DIVISION
Chief Information Officer
AVP, Solutions Delivery
Director, Enterprise Systems
Senior Manager, Data Center/Operations
Senior Manager, Process & Quality Management
Senior Manager, Sales & Revenue Management
Manager, Corporate Services Group 1
Manager, Finance Applications
Manager, Subsidiaries & Affiliates Solutions Group 1
Manager, Subsidiaries & Affiliates Solutions Group 2
Manager, Business Intelligence
Manager, Web & Workgroup Applications
Manager, Systems & Database Administration
Manager, Network & Infrastructure Software Management
JOHNNY C. SY
EVELYN L. JAVIER
FELIX C. NARITO, JR.
ALBERTO J. DULATAS
CECILE MARIE L. ESCAÑO
JOSE ALVIN P. SALAMATIN
CECILIA M. ALOC
ARLAN B. ALFONSO
MARVIN A. SANCHEZ
MA. CYNTHIA ELENA I. MENDOZA
EDWIN G. NILOOBAN
MA. VICTORIA I. JARA
BESSIE G. FONTE
JESSIE DEO L. YAMZON
INTERNAL AUDIT
Chief Internal Audit Officer
Head, Financial/Operations Audit
Senior Manager, Information Technology Audit
Senior Manager, Information Technology Audit
Manager, Information Technology Audit
Manager, Information Technology Audit
Manager, Financial/Operations Audit
ALFREDO P. BERNARDO
JOSE VICTOR B. LEACHON
MA. LUISA S. ALCANESES
MARIA CECILIA J. PABICO
SANDRA G. DE LEON
MARIA CRISTINA C. CRUZ
CARMELA GRACE C. DEL MUNDO
LEGAL SERVICES
Head, Legal Services
Head, Contracts & Corporate Services
Head, Regulatory Matter & Entertainment Law
Senior Manager, Legal Counsel
Manager, Legal Counsel
Manager, Legal Counsel
MAXIMILIAN JOSEPH T. UY
MARIFEL G. CRUZ
MONA LISA A. MANALO
MARJORIE G. SAGMIT
JUDITH M. ZAMORA
ROY JOHN C. BASA, JR.
LOGISTICS DIVISION
Chief Logistics Officer
AVP, Procurement Group
AVP, Asset Management, Warehouse & Distribution
Director, Asset Management, Warehouse & Distribution
Director, Capital Projects & Technical Requirements
Manager, Importation, Procurement Group
Manager, Non-Technical & Support Services, Procurement Group
MERCEDES L. VARGAS
LEONORA V. BUENAVENTURA
RAUL Z. ECHIVARRE
CYNTHIA R. VILLANUEVA
JONATHAN B. BUKUHAN
ALEJANDRO T. CORDOVA JR.
DIVINA T. CORDOVA
ABS-CBN SUBSIDIARIES
ABS-CBN CENTER FOR COMMUNICATIONS ARTS, INC.
Director, Workshops@ABS-CBN
Manager, Workshops@ABS-CBN
Principal, Distance Learning Center
BEVERLY A. VERGEL
J VINCENT L. DUQUE
MA. CRISTINA M. GONZALES
ABS-CBN FILM PRODUCTIONS, INC. (STAR CINEMA)
Managing Director
Senior Vice President, Creative & TV Drama Chief Finance Officer AVP, Booking & Distribution Director, Creative Director, Advertising & Promotions Head, Production Group
Manager, Booking
Manager, Video Production
Manager, Post Production & Technical Services and Research
MA. LOURDES N. SANTOS
OLIVIA M. LAMASAN
BEVERLY S. FERNANDEZ
MARY ANGELINE Y. PINEDA
ANNA LIZA MARIA B. DINOPOL
DENNIS MARCO A. LIQUIGAN
MA. TERESITA V. FUENTES
ADORA L. JACILA
MARIZEL S. MARTINEZ
ELMA S. MEDUA
ABS-CBN GLOBAL LIMITED
Managing Director
Chief Marketing Officer
Chief Financial & Corporate Planning Officer
Chief Information Officer
Head, Operations
Head, Business Development
Head, Human Resources & Organization Development
Head, Global Content
RAFAEL L. LOPEZ
CARMENCITA T. ORLINA
ANNA KARINA V. RODRIGUEZ
MA. GENEMAR D. SIMPAO
SHERRY ANN C. SUPELANA
ENRIQUE V. OLIVES
SIXTO S. GADDI
ALLAN M. CORONEL
ABS-CBN GLOBAL, MANILA
Head, Advertising Sales Head, Customer Relationship Management
Category Head, The Filipino Channel (TFC)
Head, Advertising Communications Group Head, Media Production & Events Group Head, Channel Management Development Group
Group Controller & Regional Finance Officer
Senior Manager, In-Country Marketing Head, Manila Productions Channel Manager Channel Manager Manager, Technical Services Manager, Human Resources Manager, Business Research & Analysis Head, International Sales & Distribution Manager, International Sales & Distribution
Manager, Distribution Manager, Distribution ELAINE M. PEREDO
JEANETTE Q. BELTRAN
PAMELA B. CASTILLO
ELIZABETH B. SIOJO
MICHAEL FRANCIS M. MUNOZ
EDGAR N. LEGASPI
JENNIFER M. CABANIA
CECILE ANGELA A. ILAGAN
GERALDINE G. BISQUERA
CHARLES AARON U. BAUTISTA
ANN FRANCIS MARIBEL R. HERNAEZ
CORNELIO P. DELA FUENTE
LEANDRO C. CRUZ
GLADIOLA V. ROSALES
MARIA REENA G. GARINGAN
MICHAEL ALLEN A. TOLENTINO
REBECCA A. CATALLA
LAARNI J. YU
ABS-CBN INTERNATIONAL, N.A.
Managing Director
Head, Telecom Consumer Services
Regional Finance Officer
Head, Customer Service & Fulfillment Operations
Head, Public Relations/Community Relations
Head, Broadcast Services
Head, Technical & Post Production Services
Head, Program Development & Acquisition
Head, On-Air Promotions
News Bureau Chief
Head, Systems, Budget & Logistics
Head, Network Services
Head, Los Angeles Operations
Head, Broadcast Systems Engineering
Head, Studio Engineering
Head, Business Development – Programming & Music Label Head, Business Development – MYX Channel Operations
Head, Business Development – Animation
Head, Starry Starry Store
Head, Starkargo
Head, Cable
RAFAEL L. LOPEZ
JOHN KERWIN G. DU
ZOILO M. DELA CRUZ
EMMA C. ANDAYA
MILAGROS G. SANTISTEBAN
DAVID P. HANCOCK
JONAS T. DE LEON
JOHN D. LAZATIN
CARLOS V. MUÑOZ
MA. REGINA E. REYES
MARIJANE S. KOA
KEVIN K. HO
PABLITO R. DUASO
EDMUND S. JOHNSON
ATANACIO V. PASCUAL
JEFF S. NASALGA
AUDIE T. VERGARA
RAMON L. LOPEZ
ANDREA W. VERGEL DE DIOS
ENRICO R. GATCHALIAN
ROLANDO S. DEL ROSARIO
ABS-CBN GLOBAL, AUSTRALIA
Managing Director Director, Sales & Marketing News Bureau Chief Product Manager, Asia Pacific WILHELM O. ICK
EDGARDO P. ROXAS
GERALDINE MARIE R. GRANDE
ROSELLER JUAN MIGUEL L. CONSTANTINO
ABS-CBN GLOBAL, EUROPE
Managing Director Head, Operations & Concurrent CFO
Regional Head, Sales & Marketing, Europe Head, Marketing Head, Sales - Milan & other EU Countries Chief Accountant & Logistics Officer Manager, IT & Operations RAFAEL A. JISON
STEPHEN B. MACION
LUIS C. BARIUAN
NOEMI A. ARGUILLO
EXPEDITO A. DELA CRUZ
ANGELITA A. LARA
GABRIEL T. DADIVAS
ABS-CBN GLOBAL, MIDDLE EAST
Managing Director Regional Finance Officer
Regional Marketing Officer News Bureau Chief Senior Manager, Sales & Marketing Senior Manager, Operations Manager, Business Development & Procurement Manager, IT & Subscriptions Head, Ad Sales EDGARDO B. GARCIA
OLIVER C. CALMA
JOSEPH RODRIGO O. DIAZ II
FERNANDO A. SANGA
ARTHUR LAWRENCE A. LOS BANOS
JESUS ANTONIO G. GONZALEZ III
ANDREW S. JAMIAS
FERDINAND C. ROMAN
MARIO M. MARASIGAN
ABS-CBN GLOBAL, JAPAN
Managing Director Product Manager Finance Officer JEFFREY H. REMIGIO
LYRA MARIE R. CEDENO
MONINA TERESA S. FERRER
E-MONEYPLUS INC.
Treasurer & Head Of Operations
Head, Information Technology Head, Remittance Inquiry
ALFRED G. CRISTOBAL JR.
ALEJANDRO F. SANTOS
GINA D. INDIANA
ABS-CBN INTERACTIVE, INC.
Managing Director Head, New Media
Head, Mobile Philippines
Head, Mobile Marketing
Head, Customer Relations Management
Head, Acquisition
Head, Service Management
Head, International Business Development
Head, Business Development B2B
Head, International Telco Relations
Head, MMOG
Head, Sales & Distribution
Head, Content Management
Head, Human Resources Head, Applications Development-Mobile
Head, Technical R&D
Head, Network Administration
Head, Online News
Product Manager
Head, ABS-CBN NOW!
LUIS PAOLO M. PINEDA
DENNY C. MUNOZ
CLAUDIA G. SUAREZ
RAFAEL L. SAN AGUSTIN, JR.
MA. CORAZON I. DE GUZMAN
DOMILEO G. ESPEJO
SHERILLYN E. ELEDA
RAFAEL L. CAMUS
JOSE MARIE ANGEL Y.TANJUATCO
OLIVIA S. MORENO
MICHAEL CHARLES F. PADUA
ROMEO S. CANON, JR.
JASMINE S. CASAS
LORELEI A. BADAR
CARL ADRIAN G.MENDOZA
JOSE O. DADO
ARIEL O. DECENA
JOEL B. SARACHO
AGNES L. TAPIA
CONSUELO N. LOPEZ
ABS-CBN PUBLISHING, INC.
Managing Director General Manager & Editorial Director Brand Manager - Starstudio Philippine Edition,
Starstudio International Edition, Kris Magazine Senior Brand Manager - Metro Group Brand Manager - Pink, Chalk, K Magazine Assistant Brand Manager - Metro Group Brand Manager - Food & Working Mom Assistant Operations Manager Business Development Officer Manager, IT ERNESTO L. LOPEZ
THELMA S. SAN JUAN
MA. LOURDES ROSARIO S. GONZALES
MARITESS F. DE OCAMPO
CATHERINE H. BAUTISTA
CATHERINE C. BUSTOS
MA. LOURDES S. MIJARES
JOSEPH M. UY
FELIPE FERDINAND T. CRUZ III
FRANCIS ALLAN M. BARANGAN
4/24/07 8:12:47 AM
Chief Finance Officer Manager, General Accounting Manager, Payroll Manager, Sales Accounting and C&C Manager, Credit and Collection Director, Marketing Ad Sales Director - Entertainment & Niche Titles
Ad Sales Manager - Entertainment & Niche Titles Ad Sales Director - Metro Group Ad Sales Manager - Metro Group Director, Creative Services Editor-in-Chief, Metro Him and Home Editor-in-Chief, Metro Editor-in-Chief, Workingmom Editor-in-Chief, Food Editor-in-Chief, Starstudio Editor-in-Chief, Chalk Editor-in-Chief, Pink Manager, Distribution Dealership Head, Circulation & Logistics Manager, Pre-Press Sales Manager, Pre-Press Production MARIA CORAZON B. ESQUELA
RAYMUND C. BERJA
MA. AGNES CECILIA D. FETALVERO
ELEXIS C. AVESTRO
ROWENA D. DOTE
PHILLIP T. CU-UNJIENG
CATHERINE SARAH D. DA ROZA
CONRADO Q. PINLAC, JR.
MONICA O. HERRERA
MA. TERESA F. GARCIA
HERNAN C. VILLAVECER
BONIFACIO CARLO M. TADIAR
MELANIE ELAINE J. CUEVAS
MA. MERCEDES R. PANABI
NORMA O. CHIKIAMCO
CHERRY S. PINEDA
MA. VICTORIA F. MONTENEGRO
JANE C. KINGSU
LAMBERTO M. ACUÑA
RINA A. LAREZA
TERESITA D. BAYANI
ANDRES S. LIZARDO
CREATIVE PROGRAMS, INC.
Managing Director
Channel Head, Cinema One & Strategic Programming
Channel Head, MYX
Channel Head, Hero TV & Concurrent Head of Distribution
Channel Manager, Lifestyle Network
Channel Manager, Cinema One Head, Broadcast Operation
Head, Human Resources
Head, Power Bundle Distribution
Head, Graphics & Design
Head, Sales
OLIVIA FININA G. DE JESUS
RONALD M. ARGUELLES
ANDRE ALLAN B. ALVAREZ
JOCELYN D. GO
STEPHANIE P. BENEDITO
JINGKY M. SORIANO
BONBY P. MANALO
EDGARDO A. MASANGKAY
GERTRUDES A. PICCIO
RHONEIL ANTHONY R. RAMIREZ
JULIE ANDREA A. SANTIAGO
ROADRUNNER NETWORK, INC.
Chief Operating Officer (Concurrent) Managing Director Managing Director, Industry Relations Manager, Audio & Music Operations Manager, Marketing Manager, Finance Manager, Human Resources & Admin. Services RUBEN R. JIMENEZ
MA. MARTA INES A. DAYRIT
ERIC J. HAWTHORNE
ALBERT MICHAEL M. IDIOMA
CARMINA V. MARCELO
ELY MIKE D. PINGOL
JONATHAN LOUIS C. HERBOLARIO
SKY FILMS, INC.
Director, Marketing & Acquisitions
LEONARDO P. KATIGBAK
MA. CECILIA F. IMPERIAL
STAR RECORDING, INC.
Managing Director Vice President & Managing Director Director, International Sales & Video Content Director, Local Sales Director, Warehouse & Logistics Manager, Video Content Chief Finance Officer Head, Account Management - Star Records/Star Songs Manager, National Sales
Manager, Audio Content
MA. LOURDES N. SANTOS
ANNABELLE M. REGALADO
ESTRELLITA CASTRO-PALANISAMY
REGIE G. SANDEL
NORMAN ALBERT V. SANTIAGO
LEO C. SANTOS
ISABEL GONZALEZ-TORIO
MA. CRISTINA R. BEROIN
PERCIVAL R. FONTANILLA
STAR SONGS, INC.
Managing Director
Publishing Head Chief Finance Officer ANNABELLE M. REGALADO
CEASAR M. APOSTOL
STUDIO 23, INC.
Managing Director
LEONARDO P. KATIGBAK
Head, Creative On-Air
NELSON EDISON M. AGUIFLOR
Head, On-Air Operations & Sports
MARJORIE N. ESTACIO
OIC, Head of Sales
NICOLETTE MACHUCA-MORO
Chief Finance Officer EDGARDO A. MASANGKAY
Head, Local Production
MARIA RAMONA EULALIA V. LAZARO
Head, News Central
VICENTE O. RODRIGUEZ
Manager, On-Air Promotions
DENNIS NOEL A. BALANGUE
Manager, On-Air Promotions
ELIROSE M. BORJA
Manager, On-Air Graphics & Design
FROILAN E. JONGCO, JR.
AMCARA
Head, Amcara Engineering Operations
DEOGRACIAS S. JORDAN
Manager, Amcara Operations
HERNANDO C. MANOGUID
EDGARDO A. MASANGKAY
TV FOOD CHEFS, INC.
Managing Director
Director, Operations
Manager, Operations
Manager, Executive Chef
AR 2006.indd 76-77
MYRNA D. SEGISMUNDO
RAUL H. RAMOS
RUTH J. PADILLA
MIGUEL N. YADAO
ABS-CBN FOUNDATION, INC.
Office of the Managing Director
Managing Director
REGINA PAZ L. LOPEZ
Chief of Staff
ANGELIE M. AGBULOS
Project Manager, Sagip Kapamilya Relief Services Component
JOCELYN L. SAW
Project Director, Sagip Kapamilya Rehab & Dev’t. Mgmt. Services
EDUARDO A. MORATO, JR.
Component
Chief Finance Officer/Financial Services Group Head
CARMELITA U. DE GUZMAN 2
Manager, Asset Management
VENCHITO C. AGAM
Manager, Human Resources VERONICA L.TOLENTINO
Manager, IT
JEROME S. GOTANGCO
ABS-CBN BROADCASTING CORPORATION
ABS-CBN Broadcast Center
Sgt. Esguerra Avenue corner Mother Ignacia Street,
Diliman, Quezon City 1103 Philippines
Trunk: (632) 415-2272 • (632) 924-4101
Fax: (632) 431-9368
URL: www.abs-cbn.com
REGIONAL STATIONS
LUZON
ABS-CBN BAGUIO TV 3 • DZRR 103.1
Lower Basement, CAP Building,
Post Office Loop, Baguio City
Trunk: (074) 300-6091 local 6521 [Baguio Ofc]
Trunk: (074) 300-6091 local 6522 [Sto. Tomas]
Fax: (074) 443-6091
Production Services Group
Creative Director
Head, Production Services Group
Manager, Technical Services
Manager, CCM
Executive Producer
Executive Producer
CESAR C. CELESTINO
MA. ANGELES H. GONZALES
CHRISTOPHER P. SIOCO
MA. CIELO S. REYES
CONSUELO T. FABREGAS
LEAH S. BAUTISTA
Bantay Bata
Program Director
Deputy Director
Manager, Direct Child Services Department
Manager, Children’s Village
OIC, Community & Family Services Department
Manager, Child Helpline National Department
Program Manager, Bantay Bata-Davao
TINA M. PALMA
CARMINIA M. ARAGON
MARIE CHARMINIA C. IRANTA
PRISCILLA G. FERNANDO
ROSA LEE V. RAMEL
MA. SHEILA N. ESTABILLO
ELLA M. ABAD-TAN
E-Media
Program Director
Manager, Program Development
Manager, Events & Community Services
Manager, Research & Teacher’s Training Department
Executive Producer
Head, Educational Radio
ZENAIDA S. DIMALANTA
GERRY D. DE ASIS
JENNIFER D. CATIIS-CHAN
DARLENE DOLLY A. CRUZ
MARCELA CLAUDETTE V. SEVILLA
ANGELO M. PALMONES
ABS-CBN LAOAG TV 7 • DWEL 95.5
G/F Insular Life Building
Balintawak Street, Laoag City
Direct: (077) 773-1722 • (077) 771-5234
Direct: (077) 773-1713 [Transmitter]
Fax: (077) 773-1722
Bantay Kalikasan
Officer In Charge
Manager, Resource Mobilization
Administrator, Ecopark
JOHN PAUL D. BALAYON
MA. ROWENA R. DIMANLIG
EDUARDO DAVID C. PARDO
ABS-CBN BAYAN FOUNDATION
President Executive Director Executive Director Director, Enabling Network For The Upliftment of Filipino Families Head, Physical Assets and Administrative Services Head, Finance
Manager-People Management Team (Recruitment and Routing)
Manager-People Management Team (Reviewing and Rewarding)
Manager-People Management Team (Retaining and Resonating)
Manager-People Management Team (Retooling and Recycling)
Assistant Manager, Property Management Manager, Workers Assistance Program
Manager, Research
Manager, Internal Audit
Section Head, Accounting and Information Assistant Manager, Livelihood & Entrepreneurship Development
Regional Manager, NCR – South Regional Manager, NCR – North
Regional Manager, South Luzon Region
Regional Manager, North Luzon Region
Regional Manager, Central Luzon Region
Regional Manager, Western Visayas Region
Corporate Secretary/Legal Counsel ABS-CBN LEGASPI TV 4 • DWRD 93.9
ABS-CBN Compound
Vel-Amor Subdivision, Legaspi City
Direct: (052) 480-1730 • (052) 480-1001
(052) 480-1128 • (052) 480-0939
Fax: (052) 480-1730
EDUARDO A. MORATO JR.
RAUL ISAGANI E. MANIKAN
RENO R. RAYEL3
IRMA L. COSICO
OSCAR O. ESGUERRA
ESTELITA C. CATACUTAN
DIANA JEAN A. JIMENEZ
ROMEO E. MIRANDA
MARCEL R. RIÑON
NOEL G. CAMACHO
RAUL PERFECTO C. PUNZAL
REGIN D. PEÑAFLOR
PHILIP S. FELIPE
MICHAEL D. MARQUEZ
CHARMAINE U. DELOS REYES
BENJAMIN CHRISTIAN Q. ARCEBAL III
RODERICK R. RAMOS
THOR VICTOR D. KORIONOFF
LUALHATI V. LEOSALA
WILFREDO M. ROMANTICO
DENNIS P. DIARES
GUADALUPE L. PAR
ATTY. GERMAN VOLTAIRE
DANTE M. CASTILLEJOS, JR.
________________________
1
Effective March 1, 2007
2
Resigned as of January 31, 2007
3
Resigned as of December 31, 2006
ABS-CBN DAGUPAN TV 3 • DWEC 94.3
A.B. Fernandez East, Dagupan City
Direct: (075) 523-4787 • (075) 523-6828
(075) 515-4458 • (075) 522-7056
Fax: (075) 523-4787
ABS-CBN ISABELA TV 2
3/F JECO Building,
Maharlika Hi-way, Santiago City
Direct: (078) 682-3640 • (078) 682-3544 • (078) 682-5923
Fax: (078) 682-3640
ABS-CBN NAGA TV 11 • DWAC 93.5
ABS-CBN Broadcast Complex
Panganiban Avenue, Naga City
Direct: (054) 472-4675 • (054) 473-9733 • (054) 473-6989
Fax: (054) 473-2805
VISAYAS
ABS-CBN BACOLOD TV 4 • DYOO 101.5
26th Lacson Street, Barangay 1,
Mandalagan, Bacolod City
Direct: (034) 709-9401 to 04 • (034) 434-2357 to 58
(034) 434-2789 • (034) 434-6147 • (034) 434-0911
Fax: (034) 434-2357 to 58
ABS-CBN CEBU TV 3 • DYLS 97.1 • DYAB 1512
North Road, Jagobiao, Mandaue City
Direct: (032) 422-1950 • (032) 422-1952 to 54
Direct: (032) 416-4500 [Pardo Transmitter]
Direct: (032) 419-3330 [Busay Transmitter]
Fax: (032) 422-1952
ABS-CBN DUMAGUETE TV 12
Hibbard Avenue, Dumaguete City
Direct: (035) 225-8167 • (035) 422-1169
ABS-CBN ILOILO TV 10 • DYMC 91.1
Luna Street, Lapaz, Iloilo City
Direct: (033) 320-7423 • (033) 508-6046
(033) 320-9451 to 52
Fax: (033) 320-7423
ABS-CBN TACLOBAN TV 2 • DYTC 94.3
5/F Uytingco Building
Avenida Veteranos, Tacloban City, Leyte 6500
Direct: (053) 321-3941 • (053) 321-9541
MINDANAO
ABS-CBN BUTUAN TV 11
3/F Bayantel Building,
M. Calo St.. Butuan City
Direct: (085) 341-4444 • (085) 342-8000
ABS-CBN COTABATO TV 5 • DXPS 95.1
#6 Don E. Sero Street, Rosary Heights Village, Cotabato City
Direct: (064) 421-1933 • (064) 421-8418
ABS-CBN DAVAO TV 4 • DXRR 101.1 • DXAB 1296
Shrine Hills, Matina, Davao City
Trunk: (082) 296-1917 • (082) 296-1911 to 13
Fax: (082) 299-1477
ABS-CBN GENERAL SANTOS TV 3 • DXBC 92.7
Bougainvilla Street, Villegas Subdivision
Purok Malakas, General Santos City
Direct: (083) 301-0039 • (083) 301-7950 • (083) 553-3998
Fax: (083) 301-0038
ABS-CBN ILIGAN TV 4
6/F Elena Tower Inn
Tibanga Highway, Iligan City
Direct: (063) 492-0216
Fax: (063) 223-9730
ABS-CBN ZAMBOANGA TV3 • DXFH 98.7
San Jose Road, Zamboanga City
Direct: (062) 993-1801 to 03 • (062) 992-2595
PROVINCIAL SALES CENTERS
BATANGAS SALES CENTER TV 10
Unit 14-E, 2/F Caedo Commercial Center
Calicanto, Batangas City
Direct: (043) 300-2800
Fax: (043) 722-1898
CABANATUAN SALES CENTER
Room 2, 2nd Floor, Santarina Building,
Maharlika Highway, Bernardo District
Cabanatuan City
Direct: (044) 463-4160
DAET SALES CENTER TV 23
Rooftop, TJ Building, Vinzons Avenue,
Daet, Camarines Norte
Direct: (054) 440-1123
LUCENA SALES CENTER TV 36
Maharlika Hi-Way,
Brgy. Kanlurang Mayo, Lucena City
Direct: (043) 373-7632
OLONGAPO SALES CENTER TV 12
El Elyon Arcade & Café
2443 Rizal Avenue, Olongapo City
Direct: (047) 224-4449
PAMPANGA SALES CENTER TV 46
Back of NVP Bldg.
MacArthur Hi-Way, Barangay Saguin,
San Fernando City, Pampanga
Direct: (048) 861-4407
SAN PABLO SALES CENTER
3/F PROSM Building, Brgy. Bagong Bayan,
Maharlika Hi-Way, San Pablo City
Direct: (049) 561-3711
TARLAC SALES CENTER
Room 304, 3/F Que Kian Juat Building
F. Tañedo Street, San Nicolas, Tarlac City
Direct: (045) 982-1770
TUGUEGARAO SALES CENTER TV 3
4/F Rios Building,
Corner Taft St, Colleges Avenue, Tuguegarao City
Direct: (078) 846-3316 • (078) 844-0995 • (078) 846-2480
ROXAS SALES CENTER TV 21
2706 Dayao Street, Roxas City
Direct: (036) 621-2551
DIPOLOG SALES CENTER
Suite 2-A, Hotel Camila, Building 11
General Luna Street, Dipolog City
Direct: (065) 212-9241
KORONADAL SALES CENTER TV 24
2/F Green Valley Building
General Santos Drive, Korondal City
Direct: (083) 228-9767
ABS-CBN CAGAYAN DE ORO TV 2 • DXEC 91.9
ABS-CBN Broadcasting Corp.
Greenhills Road, Bulua, Cagayan de Oro City 9000
Direct: (08822) 737-777 • (08822) 735-759
Fax: (08822) 737-910
4/24/07 8:12:48 AM
ABS-CBN SUBSIDIARIES & AFFILIATES
ABS-CBN CENTER FOR COMMUNICATION ARTS, INC.
WORKSHOPS@ABS-CBN
6/F Design & Talent Center Building
ABS-CBN Broadcasting Complex
Eugenio Lopez Jr. Drive, Quezon City 1103
Direct: (632) 416-9366
Telefax: (632) 415-3828
E-mail: workshops@abs-cbn.com
URL: www.abs-cbn.com/ccai
DISTANCE LEARNING CENTER
5/F Design & Talent Center Building
ABS-CBN Broadcasting Complex
Eugenio Lopez Jr. Drive, Quezon City 1103
Direct: (632) 414-7193
E-mail: DLC@abs-cbn.com
ABS-CBN FOUNDATION, INC.
Mother Ignacia Street corner Eugenio Lopez Jr. Drive,
South Triangle, Diliman, Quezon City 1103
Direct: (632) 411-0849
Fax: (632) 412-1382
Email: foundation@abs-cbn.com
URL: www.abs-cbnfoundation.com
ABS-CBN BAYAN FOUNDATION, INC.
2/F Calderon Building, 827 EDSA
Direct: (632) 413-0349
Email: info@absbayan.pinoycentral.com
ABS-CBN FILM PRODUCTIONS, INC. (STAR CINEMA)
3/F Main Building, ABS-CBN Broadcast Center
Sgt. Esguerra Avenue corner Mother Ignacia Street
Diliman, Quezon City 1103
Trunk:(632) 415-2272 local 3999/3902
Fax:(632) 413-8704
E-mail: star_omd@abs-cbn.com
URL: www.starcinema.com.ph
ABS-CBN INTERACTIVE, INC.
9/F ELJ Communications Center
Eugenio Lopez Jr. Drive corner Mother Ignacia Street
Trunk:(632) 415-2272
URL: www.abs-cbn.com
ABS-CBN NEWS CHANNEL
G/F Main Building, ABS-CBN Broadcast Center
Trunk:(632) 415-2272
Fax: (632) 413-5381
ABS-CBN PUBLISHING, INC.
4/F & 9/F ELJ Communications Center
Trunk: (632) 415-2272
Fax: (632) 415-1215
CREATIVE PROGRAMS, INC.
Trunk: (632) 415-2272
Fax: (632) 415-2272 local 3167
E-MONEYPLUS, INC.
G/F ELJ Communications Center
Trunk: (632) 415-2272 local 2373 to 74; local 2366
Direct:(632) 411-9116
Fax: (632) 410-4807
Extension Offices:
Direct: (632) 920-5135 • (632) 412-5003 • (632) 412-0047
Fax (632) 412-5004 • (632) 928-2935
ROADRUNNER NETWORK, INC.
282 Tomas Morato Avenue
Diliman, Quezon City
Direct:(632) 414-3456 [Film Division]
(632) 812-5851 • (632) 812-7866 [RTV Division]
(632) 894-1324 to 25 [Film Lab]
Fax:(632) 414-6838 • (632) 414-6841 [Film Division]
(632) 819-7379 • (632) 894-5633 • (632) 818-4511 [RTV Division]
(632) 893-4786 [Film Lab]
URL: www.roadrunner.com.ph
SKY FILMS, INC.
41 Sct. Borromeo St. (Jusmag Compound)
Trunk: (632) 415-2272 local 3155 to 3159
Fax: (632) 929-8368
AR 2006.indd 78-79
STAR RECORDING, INC. & STAR SONGS, INC.
2/F & 3/F Main Building, ABS-CBN Broadcast Center
Trunk: (632) 415-2272 local 3423
Fax:(632) 413-9164
URL: www.abs-cbn.com/entertainment/starrecords
STUDIO 23, INC.
3/F Main Building, ABS-CBN Broadcast Center
Trunk:(632) 415-2272 or (632) 924-4101
Fax: (632) 412-1259
E-mail: studio23@abs-cbn.com
URL: www.studio23.tv
TV FOOD CHEFS, INC.
Trunk: (632) 415-2272 local 2331 or 2334
Direct: (632) 411-1434 • (632) 411-1467 • (632) 411-1564
Fax: (632) 411-1564
ABS-CBN GLOBAL LIMITED
South Triangle, Diliman, Quezon City 1103, Philippines
Trunk: (632) 415-2272
Direct: (632) 411-1166
Fax:(632) 924-2732
URL:www.abs-cbnglobal.com
ABS-CBN GLOBAL’S INTERNATIONAL OFFICES
ABS-CBN INTERNATIONAL N.A. 150 Shoreline Drive
Redwood City, CA 94065
Trunk:(650) 508-6000
Direct: (650) 508-6015
Fax: (650) 551-1061
URL: www.abs-cbni.com
ABS-CBN MIDDLE EAST ABS-CBN Middle East LLC
Unit 116 Belshalat Bldg.
Karama P.O. Box 502087
Dubai, United Arab Emirates
Direct: (9714) 397 9075
Fax: (9714) 397 9073
ABS-CBN Middle East FZ LLC
Building 6, Office G08/G12
Dubai Media City, P.O. Box 502087
Dubai, United Arab Emirates
Direct: (9714) 390 2180
Fax: (9714) 390 8021
E-mail: tfc@abs-cbnme.com
JEDDAH ABS-CBN Middle East
SDD Compound Dallah Street
P.O. Box 430, Jeddah 21411
Direct: (9662) 619-4703 • (9662) 619-4723 • (9662) 619-4725 • (9662) 619-4727
(9662) 619-4729 • (9662) 619-4739 Ext.101-109
Fax: (9662) 670-5764 • (9662) 670-5819
RIYADH ABS-CBN Middle East
3/F Dallah Albarakah Building
King Fahad Road
P.O. Box 1438, Riyadh 11431
Trunk: (9661) 464-0084 • (9661) 464-5821 • (9661) 464-1726 • (9661) 464-8325
Ext. 1307; 1309; 1310
Fax: (9661) 201-1786 Ext 1308
DAMMAM ABS-CBN Middle East
Dallah Compound, Dammam-Al Khobar Highway
P.O. Box 6404, Dammam 31442
Direct: (9663) 858-7447 • (9663) 857-4326 • (9663) 857-7562 • (9663) 858-1358
Fax: (9663) 858-7227
ABS-CBN EUROPE LTD.
ABS-CBN Europe Limited – Head Office
1/F Intelco House, 2 Progress Business Center
Whittle Parkway Slough SL1 6DQ
Direct: (44) 0 1628 606860
Fax: (44) 0 1628 606879
ABS-CBN Europe Limited-Filiale Italy
Via Piccinni, 3
20131 Milan, Italy
Direct: (39) 02 20480801• (39) 02 2951 8706
Fax: (39) 02 2046 626
ABS-CBN AUSTRALIA PTY LTD.
B6 12-14 Solent Circuit
Baulkham Hills NSW 2153, Australia
Direct: (612) 8884 6100
Fax: (612) 8884 6188
E-mail: tfc@abs-cbnau.com
BANKS & OTHER FINANCIAL INSTITUTIONS
ABN AMRO BANK, INC.
19/F LKG Tower
6801 Ayala Avenue
1226 Makati City
ABN AMRO BANK, N.V. -MANILA OFFSHORE BANKING UNIT
19/F LKG Tower
6801 Ayala Avenue
1226 Makati City
ABN-AMRO BANK N.V. -SINGAPORE
63 Chulia Street, Level 13
Singapore
ALLIED BANKING CORPORATION
Mezzanine Floor, Allied Bank Center
6764 Ayala Avenue
Makati City
RIZAL COMMERCIAL BANKING CORP.
11/F, Yuchengco Tower, RCBC Plaza,
6819 Ayala Ave. cor. Gil Puyat Ave.
Makati City
SECURITY BANK
Security Bank Center
6776 Ayala Avenue
Makati City
SOCIETE GENERALE ASIA LIMITED
42/F Edinburgh Tower
15 Queen’s Road Central
Hong Kong
UNITED COCONUT PLANTERS BANK
14/F UCPB Building
Makati City
LEGAL COUNSEL
BANCO DE ORO UNIVERSAL BANK
12 ADB Avenue, Ortigas Center
Mandaluyong City
QUIASON, MAKALINTAL, BAROT, TORRES & IBARRA
21/F, Robinsons- Equitable Tower
4 ADB Avenue cor. Poveda St. ,
Ortigas Center 1605 Pasig City
BANCO DE ORO UNIVERSAL BANK-TRUST
12 ADB Avenue, Ortigas Center
Mandaluyong City
TRANSFER AGENT
BANK OF THE PHILIPPINE ISLANDS
BPI Building, Ayala Avenue
Cor. Paseo De Roxas
Makati City
BPI CAPITAL CORPORATION
8/F, BPI Building. Ayala Avenue
Cor. Paseo De Roxas
Makati City
SECURITIES TRANSFER SERVICES, INC.
4/F Benpres Building,
Exchange Road corner Meralco Avenue,
Ortigas Center, 1600 Pasig City
EXTERNAL AUDITOR
SYCIP, GORRES, VELAYO & CO.
6750 Ayala Avenue
1226 Makati City, Philippines
BPI LEASING CORPORATION
8/F, BPI Head Office
Ayala Ave. cor. Paseo de Roxas,
Makati City
BUMIPUTRA-COMMERCE BANK BERHARD - HONG KONG BRANCH
Suite 3607-08, Two Exchange Square
8 Connaught Place, Central
Hong Kong
CITIBANK N. A.
9/F, Citibank Tower
8741 Paseo De Roxas
Makati City
EQUITABLE - PCIBANK
Equitable PCI Bank Tower l
Makati Ave., Cor H.V. Dela Costa St.
Makati City
EQUITABLE – PCIBANK - TRUST BANKING
Equitable PCI Bank Tower l
Makati Ave., Cor H.V. Dela Costa St.
Makati City
ING BANK N.V. - SINGAPORE BRANCH
9th Raffles Place
#19-02 Republic Plaza
Singapore
ING BANK N.V. - MANILA BRANCH
21/F Tower One, Ayala Triangle
Ayala Avenue, Makati City
METROPOLITAN BANK AND TRUST COMPANY
2/F, Metrobank Plaza
Sen. Gil Puyat Avenue
Makati City
MIZUHO CORPORATE BANK, LTD. - MANILA BRANCH
26/F, Citibank Tower
Valero St. corner Villar St.
Salcedo Village, Makati City
PCI LEASING AND FINANCE INC.
PCI Leasing Center
Corinthian Gardens, Ortigas Avenue,
Quezon City
PHILIPPINE COMMERCIAL CAPITAL INC.
PCCI Bldg., 118 Alfaro Street
Salcedo Village
Makati City
4/24/07 8:12:50 AM
For further information about our company,
please contact the following:
INVESTOR RELATIONS
Mr MIGUEL JOSE T. NAVARRETE
Ph (632) 415-2272 ext. 4312
Fax (632) 431-9368
Email: mike_navarrete@abs-cbn.com
Ms LYRA C. FAJARIT
Ph (632) 415-2272 ext. 4609
Fax (632) 431-9368
Email: lyra_fajarit@abs-cbn.com
CORPORATE AFFAIRS AND PUBLIC RELATIONS
Mr RAMON R. OSORIO
Ph (632) 415-2272 ext. 4377
Email: bong_osorio@abs-cbn.com
THE 2006 ANNUAL REPORT
STEERING COMMITTEE
Miguel Jose T. Navarrete • Robert G. Labayen ●
Lyra C. Fajarit • Danie Sedilla-Cruz ●
Christine Daria-Estabillo • Carmelo B. Saliendra ●
Michael Andre G. Ocampo • Alicia Yael B. Honasan
John David D. Sison
OVERALL COORDINATION
Lyra C. Fajarit
LAY-OUT & PRE-PRESS PRODUCTION
ABS-CBN Creative Communications Management
PRODUCER
Danie Sedilla-Cruz
CREATIVE DIRECTORS
Robert G. Labayen • Carmelo B. Saliendra
CONTRIBUTING WRITER
Alicia Yael B. Honasan
GRAPHIC DESIGNERS
Carmelo B. Saliendra • Michael Andre G. Ocampo
ASSOCIATE PRODUCERS
Lyra C. Fajarit • Christine Daria-Estabillo ●
John David D. Sison • Jaime V. Porca
PHOTOGRAPHERS
Mandy Navasero • Carmelo B. Saliendra
PRINT PRODUCTION
Carmelo B. Saliendra
COLOR SEPARATION & PRINTER
ABS-CBN Publishing
All information in this Annual Report are correct to
the best of our knowledge, but do not constitute an
assumption of liability or a guarantee of particular
characteristics.
This publication may not be reprinted in its entirety or in
part without the company’s permission.
AR 2006.indd 80-81
4/24/07 8:12:50 AM

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