PSE Circular for Brokers No. 965-99

May 4, 1999 PSE CIRCULAR FOR BROKERS NO. 965-99 PRESS RELEASE Metro Pacific Reports Net Income of Pesos 2 billion for First Quarter Metro Pacific Corporation ("MPC") announced today that it posted a consolidated net income of Pesos 2 billion for the first quarter of 1999, compared with Peso 106 million during same period last year. The significant increase in net income was due largely to non-recurring gains from a deemed gain and disposal of an aggregate 14 percent of Smart Communications, Inc ("Smart") to Nippon Telegraph and Telephone Corporation ("NTT") of Japan. The transaction reduced MPC's interest in Smart from 52 percent to 38 percent and increased NTT's stake from 15 percent to 37 percent, with the additional 8 percent coming from First Pacific Company Ltd. MPC President Napoleon Nazareno said, "Our strong first quarter results are likely to be followed by another gain later in the year as MPC, together with First Pacific Company Limited, pursues the injection of Smart into PLDT. The transaction will crystallize the full value of Smart, one of the most valuable investments MPC has ever made in its history.' cdpr Sales rose 11 percent to Pesos 3 billion, reflecting in part the consolidation of Negros Navigation Co., Inc., a domestic shipping line that was acquired in May 1998, and Landco Pacific Corp., a developer of property outside Metro Manila which became a subsidiary in July 1998. Operating profit declined 7 percent to Pesos 753 million, while financing charges increased to Pesos 334 million, reflecting the effects of consolidating the two units. Net other income exceeded Pesos 1.9 billion. primarily represented by the non-recurring gain of Pesos 2.7 billion associated with the reduction in MPC's interest in Smart. This was offset by certain provisions made during the period relating to restructuring charges and the write off of one of Nenaco's vessels. MPC's total consolidated liabilities, however, continued to decrease to Pesos 44.7 billion as of end March 1999. This was a 7 percent reduction from the 1998 year end level of Pesos 48.3 billion, and a 24 percent reduction from the first quarter 1998 level of Pesos 58.5 billion, adjusted for the de-consolidation of Smart's liabilities of Pesos 21.4 billion. This resulted in a further improvement in consolidated debt-to-equity ratio to 0.62 from 1.11 a year earlier and 0.71 at year end 1998. Interest-bearing liabilities retired during the last 12 months carried with them capitalized interests, which explains the relatively steady flow of interest charges. Cash inflows during the quarter included proceeds of Pesos 1.6 billion or US$42 million from the sale of Smart to NTT and Pesos 1.6 billion from the issuance of new shares to institutional investors. For further information, please contact: Ms. Corazon P. Guidote Group Vice President, Corporate Communications and Investor Relations Telephone No.: 811-03-67 Mr. Ian Wilson Chief Financial Officer Telephone No.: 810-53-45 METRO PACIFIC CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE THREE MONTHS ENDED 31 MARCH (Unaudited) In thousand Pesos 1999 1998 REVENUES 3,071,633 2,758,987 COST OF SALES 1,770,368 1,591,289 OPERATING EXPENSES 548,408 358,143 OPERATING PROFIT 752,857 809,555 EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES 35,996 52,552 FINANCING CHARGES, net (333,573) (150,326) PROFIT BEFORE OTHER INCOME 455,280 711,781 OTHER INCOME, net 1,972,316 84,221 PROFIT BEFORE TAXATION 2,427,596 796,002 TAXATION 105,359 151,724 NET INCOME BEFORE OUTSIDE INTERESTS 2,322,237 644,278 OUTSIDE INTERESTS (268,188) (537,445) NET INCOME 2,054,049 106,833 RETAINED EARNINGS BEGINNING OF YEAR 2,413,387 2,084,449 RETAINED EARNINGS END OF PERIOD 4,467,436 2,191,282 EARNINGS PER SHARE (in centavos) - BASIC 11.96 2.28 EARNINGS PER SHARE (in centavos) - DILUTED 11.65 1.72 METRO PACIFIC CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) As at 31 March 31 December 31 March (In thousands) 1999 1998 1998 ASSETS Current assets Cash and cash equivalents 2,342,240 2,571,590 3,819,126 Receivables 6,074,709 6,016,094 6,684,671 Due from affiliated companies 844,539 831,257 585,181 Inventories 850,425 874,429 942,041 Development properties held for sale 2,891,558 2,286,912 3,069,896 Prepayments and other current assets 813,736 1,202,553 2,076,374 Deferred income tax asset 956,271 900,376 - Total current assets 14,773,478 14,683,211 17,177,289 Long-term receivables 6,631,682 6,407,460 7,784,067 Investments in affiliated companies 9,266,406 8,361,160 9,790,523 Development properties 72,410,394 72,732,718 67,261,147 Property, plant and equipment 5,709,448 6,288,273 2,847,875 Goodwill 462,720 467,240 168,545 Other assets 7,253,034 7,257,637 6,164,130 Total assets 116,507,162 116,197,699 111,193,576 LIABILITIES AND EQUITY Current liabilities Loans and notes payable 7,821,472 7,519,977 8,489,297 Current portion of long-term debts 601,305 718,906 231,565 Current portion of long-term liabilities and provisions 1,680,552 2,194,571 3,925,997 Accounts payable and accrued expenses 3,603,807 3,946,142 2,725,701 Income tax payable 152,410 7,167 25,757 Total current liabilities 13,859,546 14,386,763 15,398,317 Long-term debts 13,879,369 16,147,498 23,411,673 Long-term liabilities and provisions 17,043,121 17,777,114 19,732,756 Equity Stockholders' equity Capital stock 17,319,694 16,877,664 4,707,337 Additional paid-in capital 8,569,436 8,318,053 6,653,277 Deposit on stock subscriptions 716,357 - - Retained earnings 4,467,436 2,413,387 2,191,283 Outside interests 40,652,203 40,277,220 39,098,933 Total equity 71,725,126 67,886,324 52,650,830 Total liabilities and equity 116,507,162 116,197,699 111,193,576