PSE Circular for Brokers No. 2850-99

November 9, 1999 PSE CIRCULAR FOR BROKERS NO. 2850-99 SECURITIES AND EXCHANGE COMMISSION SEC FORM 11-C CURRENT REPORT UNDER SECTION 11 OF THE REVISED SECURITIES ACT (RSA) AND RSA RULE 11(a)-1(b)(3) THEREUNDER 1. November 8, 1999 Date of Report (Date of earliest event reported) 2. SEC identification Number 19073 3. BIR Tax Identification No. 350-000-288-6981 4. FIRST PHILIPPINE HOLDINGS CORPORATION Exact name of registrant as specified in its charter 5. N/A Province, country or other jurisdiction of incorporation 6. PM(SEC Use Only) Industry Classification Code: 7. 6th Floor, Benpres Building, Meralco Avenue cor. Exchange Road, Pasig City 1600 Address of principal office Postal Code 8. 2-631-8024 to 30 Registrant's telephone number, including area code 9. N/A Former name or former address, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding Class "A" Common Shares 295,861,522 shares Class "B" Common Shares 153,089,589 shares Total 448,951,111 shares ================ Long Term Commercial Paper (LTCP) P2,000,000,000 11. Indicate the item numbers reported herein: Item Nos. 4 and 9 Item 4 During the annual meeting of the stockholders held on November 8, 1999, the persons named herein were elected as members of the Board of Directors of First Philippine Holdings Corporation (the "Corporation"): Name Nationality Residence Mr. Oscar M. Lopez Filipino 672 Notre Dame, Wack-Wack Vill. Greenhills, Mandaluyong City Mr. Augusto Almeda-Lopez Filipino 35 Joaquin Street, San Lorenzo Village, Makati City Mr. Peter D. Garrucho, Jr. Filipino 44 Roseville St., White Plains, Quezon City Mr. Oscar Hilado Filipino c/o Phinma Property Holdings Corp. 7/F, Phinma Bldg., 166 Salcedo St., Legaspi Vill., Makati City Mr. Elpidio L. Ibaez Filipino 141 Capricorn St., Cinco Hermanos Subd., Marikina City Mr. Manuel M. Lopez Filipino Manila Electric Company 12/F, Lopez Bldg., Ortigas Ave., Pasig City Mr. Christian S. Monsod Filipino 2304 Morado St., Dasmarias Vill. Makati City Mr. Vicente T. Paterno Filipino Philippine Seven Corporation 11/F, Columbia Tower, Ortigas Ave. Mandaluyong City Mr. Steve E. Psinakis American c/o First Phil. Holdings Corp. 6/F Benpres Bldg., Meralco Ave., Pasig City Mr. Ernesto B. Rufino, Jr. Filipino 29 Banaba Road, Forbes Park Makati City Mr. Washington Z. Sycip Filipino 14/F, SGV I Bldg., 6760 Ayala Ave. Makati City Item 9 During the annual meeting of the stockholders of the Corporation held on November 8, 1999, the following matters were ratified, to wit: 1. Amendment of Article SEVENTH of the Amended Articles of Incorporation to reflect the declassification of the Class "A" common stock and Class "B" common stock. cdll 2. Amendment of Section 1 Article I of the By-Laws to reflect the change in the schedule of the Annual Stockholders Meeting from the second Monday of November to the third Monday of May. 3. Amendment of Article X of the By-Laws to reflect the change in the accounting period to calendar year. Pasig City, November 8, 1999. FIRST PHILIPPINE HOLDINGS CORPORATION By: (SGD.) ERNESTO B. RUFINO, JR. Chief Information Officer MR. ELPIDIO L. IBAEZ COO & President First Phil. Holdings Corp. Annual Stockholders' Meeting November 8, 1999 MR. CHAIRMAN FELLOW STOCKHOLDERS AND EMPLOYEES, GOOD AFTERNOON: REVIEW OF OPERATIONS FY1999 Fiscal year 1999 was a solid year for the company, as evidenced by the 11th consecutive year of revenue growth. Revenues of P8.2 billion represent a 73% increase over the P24.7 billion in fiscal year 1998. Excluding the gain on switching of Meralco shares, revenues increased 57% compared to increases of 45% in fiscal year 1998 and 27% in fiscal year 1997. Net earnings registered a new record of P2.6 billion, a 105% increase over the previous year's level. Earnings per share (diluted) for fiscal year 1999 amounted to P5.06, representing an increase of 55%. The major increase in our investment account is due to our acquisition of Meralco "A" shares at market prices versus the disposition of our Meralco "B" shares which were carried at historical costs. The rise in property, plant and equipment reflect the progress in the construction of the Sta. Rita power plant of First Gas. Likewise, the higher level of liabilities resulted from the fund raising activities at both the parent and First Gas levels. The company was fortunate that the full impact of the economic slowdown was mitigated by the defensive nature and posture of our businesses. However, we are now beginning to feel the crunch. REVIEW OF PERFORMANCE 1st QUARTER FY2000 For the first quarter of fiscal year 2000, net income was at P161.3 million on revenues of P905 million. Both revenues and net income were lower compared to the previous year's level by 52% and 26%, respectively. Costs and expenses also went down by 59%, however, this was not sufficient to cover the decline in revenues. The slowdown in economic activity has finally been felt, particularly in the construction sector, where our revenues decreased by 70%. Our industrial park project and manufacturing sector, likewise, suffered registering 97% and 18% declines in revenues. The share in net earnings of unconsolidated affiliates also dropped by 5% owing to the decline in net income of Meralco. As a result of the decline in revenues, costs of contracts and services went down by 79%, while cost of land sold and developed went down by 96%. Operating expenses as well as cost of merchandise sold decreased by 10% and 8%, respectively. The decrease is primarily attributable to continued emphasis on achieving overall cost efficiencies in response to the expected weaker revenue trends. In addition, interest and other expenses declined by 16%. cdlex Y2K COMPLIANCE On a final note, FPHC has completed a review of its computer systems with regard to year 2000 compliance. The company has started replacing and correcting those computer systems that have been found to have date-related deficiencies. The company has devoted all the necessary resources to resolve all significant year 2000 issues in a timely manner. Thank you and good day.