Ayala Corporation's Unaudited Results for 1999

February 24, 2000 PSE CIRCULAR FOR BROKERS NO. 457-00 February 23, 2000 Securities & Exchange Commission Attention : Director Linda A. Daoang Money Market Department S.E.C. Building, EDSA Mandaluyong City Philippine Stock Exchange Attention : Disclosure Department Listing and Disclosure Group 4/F PSE Center, Exchange Road Ortigas Center, Pasig City SUBJECT : Ayala Corporation's Unaudited Results for 1999 Gentlemen: We are pleased to report Ayala Corporation's unaudited results for 1999. llcd The Company's yearend consolidated net income of P5.1 Billion, which did not have an extraordinary gain component, translated to a growth in recurring income of 6% from the 1998 comparable level of P4.8 Billion. Consolidated net income, however, was lower by 22% from the year-ago level of P6.57 Billion, mainly due to flat or lower results of Ayala Land, Inc. (ALI) and Bank of the Philippine Islands (BPI). Ayala Corporation also reported a 16% growth in its consolidated resources to P138 Billion. Cash reserves rose by 25% to P16 Billion, maintaining the Company's ability to cover regular working capital requirements and address possible strategic opportunities. Current and debt-equity ratios are at comfortable levels of 2.1 and 1.06, respectively. The group's real estate subsidiary, Ayala Land, Inc., ended the year on solid ground with revenues of P8.9 Billion despite the continued softness of the overall property market. ALI generated a consolidated net income of P2.6 Billion with lease operations accounting for 31% of consolidated revenues. A strong balance sheet backed by P56.0 Billion total resources and a low debt level positions the company for long-term growth. Steady cash flows and efficient cash management enabled the Company to make strategic capital investments which totaled P4.2 Billion for the year without incurring additional borrowings. The Bank of the Philippine Islands registered a consolidated net income of P4.03 Billion. This was 12% lower than the previous year's level as loan demand remained soft and spreads narrowed with declining interest rates. Nevertheless, BPI remained one of the country's best-managed banks with its low NPL ratio of 6.8%. Its return on equity of 13.7% and return on assets of 1.8% remains the highest among universal banks. Globe Telecom ended 1999 on a strong note with revenues of P9.4 Billion and a net income of P939.5 Million. Total assets stood at P36.5 Billion while stockholders' equity was at P13.5 Billion. Globe Telecom is now the country's second-largest cellular company capturing 30% of the market, rising from 8% two years ago and the undisputed digital cellular leader with a 75% market share. The Company's combined mobile and fixed-line subscriber base exceeded one million in 1999. It continues to explore the possibility of combining its operations with other cellular and fixed-line operators. Such an initiative will enable Globe Telecom to expand its network, increase its subscriber base, accumulate scarce frequency resources, and realize capital expenditure and operating efficiencies. Pure Foods Corporation posted sales revenues of P10.8 Billion and net profits of P727.6 Million. As all operating units registered growth in sales and profits, recurring operations grew by 162% to P615.9 Million from the previous year's level. The processed meats business, which is now under The Purefoods Hormel Company, reminded the largest contributor with tonnage sales growing by 32% driven by strong sales of hotdogs. Cognizant of the changing competitive landscape, Ayala Corporation continues to seek out emerging opportunities for long-term growth. Recently, it launched the Ayala Center website to enable consumers throughout the globe to purchase the Group's products and services. The Company also established a new company called Ayala Company, Inc. to tap potentials emerging from IT convergence trends within the group and develop relationships in the growing e-commerce and internet-centric communities. The above information is being submitted in compliance with the rules of the SEC and the PSE. Very truly yours, (SGD.) RUFINO LUIS T. MANOTOK Managing Director & Head, Strategic Planning Group