Metro Pacific Reports Net Income of Pesos 2.6 Billion for Nine Months

November 17, 1999 PSE CIRCULAR FOR BROKERS NO. 2930-99 Metro Pacific Reports Net Income of Pesos 2.6 billion for Nine Months Metro Pacific Corporation announced today that it posted a consolidated net income of Pesos 2.6 billion for the nine month period to September 1999, up 14 times from last year's level of Pesos 172 million. Revenues increased by 5% to Pesos 8.3 billion, primarily as a result of increased sales from Pacific Plaza Towers, the prestigious condominium development in Fort Bonifacio, and Negros Navigation Co., Inc. ("Nenaco"), which was consolidated from mid-1998. The growth in net income was largely attributable to non-recurring gains following a series of asset disposals since the start of this year. In the first quarter, Metro Pacific made a partial sale of Smart Communications, Inc. to Nippon Telegraph and Telephone Corporation ("NTT") of Japan for Pesos 1.6 billion, while NTT also invested in new shares in Smart. These transactions reduced Metro Pacific's interest in Smart from 52% to 38%. In the second quarter, Metro Pacific sold its 100% stake in Metro Bottled Water Corporation, the manufacturer of Wilkins Distilled Drinking Water, to La Tondea Distillers, Inc. for Pesos 1.2 billion. In the third quarter, Metro Pacific's interest in Metrolab Industries, Inc., the maker of Eskinol, Block and White and other skin-care products, was sold to Sara Lee Philippines, Inc. for Peso 1.02 billion. Both Metro Bottled Water Corp. and Metrolab Industries, Inc. have been classified as discontinued operations and reflected as such in the income statements for the current and prior periods. Metro Pacific's balance sheet improved further with its ongoing efforts to reduce consolidated debts. Total liabilities dropped 22% to Pesos 40.6 billion, of which only Pesos 20 billion are interest-bearing, a reduction of 23% from its level in the previous year. As of end September 1999, the Company's consolidated debt-to-equity ratio was down to 0.54 from 0.57 as of end June 1999 and 0.71 as of end 1998. This ratio should decrease further in the fourth quarter to approximately 0.42 when the reversal of a liability of Pesos 8.8 billion, associated with a 64-hectare lot in Fort Bonifacio that is to be reallocated by the Government for use in other projects is expected to be recorded. During the year, Metro Pacific also issued approximately Pesos 4.1 billion of new equity, the proceeds of which were used primarily for debt reduction. In addition. over Pesos 2 billion of funds were generated from the sale of its two consumer-based subsidiaries. cdll Philippine Ratings Services Corporation (formerly CIBI Ratings, Inc.) recently maintained the credit rating of Metro Pacific for its commercial papers at PRS-A rating on outstanding long-term commercial paper and PRS 2-on short-term commercial papers ("STCPs"). Metro Pacific has also been issued a license from the Securities and Exchange Commission to sell up to Pesos 2 billion of STCPs. This, combined with other substantial credit lines that are presently available, obviates any possible need for Metro Pacific to issue additional common shares within 1999 or the first half of next year. For further information, please contact: LexLib Mr. Ian Wilson Director Telephone No.: 811-00-21 Ms. Corazon P. Guidote Group Vice President, Corporate Communications and Investor Relations Telephone No. 811-03-67 METRO PACIFIC CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) For the period ended 30 September Nine months Three months (In thousands) 1999 1998 1999 1998 Revenues 8,301,522 7,895,333 2,651,877 2,658,430 Cost of sales (5,567,268) (4,902,332) (1,846,521) (1,746,732) Operating expenses (950,806) (753,696) (311,332) (269,330) Operating profit 1,783,448 2,239,305 494,024 642,368 Equity in net earnings of affiliated companies (4,930) 163,668 (12,840) (5,277) Financing charges, net (815,049) (773,610) (229,088) (291,554 Profit before other income 963,469 1,629,363 252,096 345,537 Other income/(expense), net 2,780,545 (295,042) 44,274 (541,486) Profit before taxation 3,744,014 1,334,321 296,370 (195,949) Taxation (146,353) 103,631 22,665 302,634 Income from continuing operations 3,597,661 1,437,952 319,035 106,685 Loss from discontinued operations (122,426) (99,650) (5,915) (17,395) Net income before outside interests 3,475,235 1,338,302 313,120 89,290 Outside interests (832,271) (1,165,820) (159,530) (34,202) Net income for the period 2,642,964 172,482 153,590 55,088 Retained earnings Beginning of period 2,413,387 2,084,449 4,902,761 2,201,843 Dividends paid - - - - End of period 5,056,351 2,256,931 5,056,351 2,256,931 Earnings per share (in centavos) Basic 15.00 1.82 0.85 0.36 Fully diluted 14.52 1.73 0.81 0.35 Weighted average number of shares in issue Basic 17,624,552 9,478,704 18,118,898 15,461,690 Fully diluted 18,199,135 9,950,142 18,907,242 15,933,128 Note: 1998 figures have been restated to be comparable with 1999 data, involving the deconsolidation of Smart Communications, Inc. consistent with the change in policy described in detail in the 1998 annual report, the deconsolidation of discontinued consumer products business reflected from the third quarter 1999 and the reclassification of certain accounts comparable with the treatment made at yearend 1998. METRO PACIFIC CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) As at 30 September 31 December 30 September (In thousands) 1999 1998 1998 * ASSETS Current assets Cash and cash equivalents 2,380,358 2,571,590 3,537,970 Receivables 6,259,640 6,016,094 5,506,151 Due from affiliated companies 654,001 831,257 921,963 Inventories 695,016 874,429 1,121,648 Development properties held for sale 2,932,550 2,286,912 5,876,655 Prepayments and other current assets 924,649 1,202,553 2,212,669 Deferred income tax asset 713,772 900,376 306,830 Total current assets 14,559,986 14,683,211 19,483,886 Long-term receivables 5,161,105 6,407,460 9,687,784 Investments in affiliated companies 8,786,657 8,361,160 8,250,736 Development properties 75,002,343 72,732,718 69,247,380 Property, plant and equipment 4,797,968 6,288,273 6,876,213 Goodwill 407,184 467,240 157,312 Other assets 7,317,661 7,257,637 6,693,956 Total assets 116,032,904 116,197,699 120,397,267 LIABILITIES AND EQUITY Current liabilities Loans and notes payable 7,753,006 7,519,977 10,466,261 Current portion of long-term debts 644,895 718,906 537,039 Current portion of long-term liabilities and provisions 2,584,287 2,194,571 2,091,518 Accounts payable and accrued expenses 3,362,446 3,946,142 4,383,459 Income tax payable 9,778 7,167 - Total current liabilities 14,354,412 14,386,763 17,478,277 Long-term debts 11,618,042 16,147,498 14,932,452 Long-term liabilities and provisions 14,679,712 17,777,114 19,590,128 Equity Stockholders' equity Capital stock 18,121,400 16,877,664 15,476,691 Additional paid-in capital 9,235,989 8,318,053 9,733,845 Deposit on stock subscriptions 1,665,600 - - Retained earnings 5,056,351 2,413,387 2,256,932 Outside interests 41,301,398 40,277,220 40,928,942 Total equity 75,380,738 67,886,324 68,396,410 Total liabilities and equity 116,032,904 116,197,699 120,397,267 * 1998 figures have been restated to be comparable with 1999 data, involving the deconsolidation of Smart Communications, Inc. consistent with the change in policy described in detail in the 1998 annual report. METRO PACIFIC CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the nine-month period ended 30 September 1999 1998* (In peso thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income for the period 2,642,964 172,482 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 607,092 Provision for deferred tax - Provision for decline in value of investment - Foreign exchange losses 103,442 Loss/(gain) on sale of property, plant and equipment (231) Gain on sale of investment in subsidiary (214,637) Gain on change in equity holdings in investee company (56,000) Equity in net loss/(earnings) of affiliated companies (163,668) Equity of outside interests 1,165,820 Change in working capital, net (1,013,526) (711,171) Net cash used in operating activities 841,050 903,129 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of subsidiary 3,495,789 29,527 Purchase of property, plant and equipment (387,113) (296,664) Proceeds from sale of property, plant and equipment 201,431 10,046 Issue of shares to outside interests by a subsidiary - 603,473 Investments in and advances to affiliated companies (140,537) (4,242,957) Decrease/(increase) in long-term notes receivable 827,829 (213,235) Dividends received from affiliated companies - 38,454 Increase in development properties (1,865,811) (3,086,445) Net cash from (disposed)/acquired subsidiaries (7,374) 636,965 Increase in other and intangible assets (39,168) (132,404) Net cash used in investment activities 2,085,046 (6,653,240) CASH FLOWS FROM FINANCING ACTIVITIES: Capital contributions received 3,874,272 13,848,355 Issue of shares to outside interests by a subsidiary 33,891 - Increase in loans and notes payable 648,717 954,968 Decrease in long-term debts (4,892,329) (9,349,387) Decrease in long-term liabilities and provisions (2,781,879) (1,509,265) Net cash provided by financing activities (3,117,328) 3,944,671 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS (191,232) (1,805,440) Beginning of period 2,571,590 5,343,410 End of period 2,380,358 3,537,970 * 1998 figures have been restated to be comparable with 1999 data, involving the deconsolidation of Smart Communications, Inc. consistent with the change in policy described in detail in the 1998 annual report.