Tempe, Inc.

Statements of Financial Condition

As of December 31
Annex B-1
(Amounts in Php '000s) 2004 2005 2006 2007 Notes
Assets
Current Assets
Cash and cash equivalents 10,391,301 27,398,529 17,830,549 30,366,623
Accounts and notes receivable - net 17,469,560 38,571,243 51,245,348 30,421,314
Inventories 8,729,384 9,391,896 9,959,899 10,216,768
Interest receivable 234,284 350,987 107,568 846,523
Other current assets 3,047,165 3,961,315 4,357,447 3,601,195
Total current Assets 39,871,694 79,673,970 83,500,810 75,452,423
Noncurrent assets
Noncurrent accounts and notes receivable 2,519,816 2,799,796 1,259,908 - Starting from 2004, Tempe ceased to allow installment sales. Hence, the decline is due to the maturity of the existing installment sales only
Land and improvements 16,587,010 16,587,010 16,587,010 16,587,010 No change in value
Investments in associates and jointly-controlled entities - net 21,294,519 16,770,984 25,023,882 34,732,060
Investments in bonds and other securities 6,390,363 6,385,701 6,458,125 7,253,706 Assume to be foreign bonds and securities, no change except for forex loss; generates dividend income
Investment properties 16,794,662 14,443,845 15,927,160 12,575,037 Investment income is assumed to be derived from this, as well as gain from sale of investments
Property, Plant and equipment, net 19,057,075 17,342,398 14,752,040 11,763,161 No new investment in PPE
Intangible assets 4,429,855 2,514,115 2,296,535 1,633,944 No new investment in intangible assets
Other noncurrent assets 1,785,374 1,623,067 2,053,180 2,231,718
Total noncurrent assets 88,858,674 78,466,916 84,357,840 86,776,636
Total assets 128,730,368 158,140,885 167,858,651 162,229,059
Liabilities and equity
Current liabilities
Accounts payable and accrued expenses 18,325,716 45,974,369 31,180,077 24,775,418
Short term debt 2,504,007 2,504,007 2,504,007 -
Current portion of noncurrent bank debt 9,359,594 9,359,594 9,359,594 9,359,594
Interest Payable 1,899,765 2,671,717 3,449,526 2,997,580
Income tax payable 457,653 1,088,603 1,334,552 1,627,526
Other current liabilities 1,453,013 1,651,151 1,380,362 1,598,314
Total current liabilities 33,999,748 63,249,441 49,208,118 40,358,432
Noncurrent liabilities
Bank debt 47,543,879 38,517,839 29,158,245 19,798,651
Bonds offered - - 25,000,000 25,000,000 Issued bonds at face value on Oct 1, 2006, at 9% coupon rate. Principal payable after 15 years
Other noncurrent liabilities 2,306,079 5,582,786 5,169,247 6,018,244
Total noncurrent liabilities 49,849,958 44,100,625 59,327,492 50,816,895
Total Liabilities 83,849,706 107,350,066 108,535,610 91,175,327
Equity
Paid up capital 41,045,676 41,045,676 41,045,676 41,045,676
Retained earnings 3,834,986 9,745,143 18,277,365 30,008,056
Total equity 44,880,662 50,790,819 59,323,041 71,053,732
Total liabilities and owners's quity 128,730,368 158,140,885 167,858,651 162,229,059
Tempe, Inc.
Statements of Financial Performance
For the years ended December 31
Annex B-2
(Amounts in Php '000s) 2005 2006 2007 Notes
Revenue
Sales and services 58,789,776 63,394,230 68,578,214
Equity in net income of associates and jointly controlled entities 3,202,301 3,252,898 4,708,178
Interest Income 1,753,654 1,520,858 1,693,045
Other income 5,948,459 6,998,009 10,728,375
Total Revenue 69,694,190 75,165,995 85,707,812
Costs and expenses
Cost of Sales and Services 48,678,956 50,857,337 53,169,110
General and administrative 6,311,324 7,708,161 9,498,306
Interest expense and other financing charges 5,343,433 5,586,552 6,370,160
Other charges 2,219,300 386,919 1,569,944
Total costs and expenses 62,553,013 64,538,969 70,607,520
Income before income tax 7,141,177 10,627,026 15,100,292
Income tax (at 35%) 1,231,020 2,094,805 3,369,601
Net income 5,910,157 8,532,221 11,730,692
Tempe, Inc.
Statements of Cash Flows
As of December 31
Annex B-3
(Amounts in Php '000s) 2,005 2,006 2,007
EBIT 7,141,177 10,627,026 15,100,292
Adjustments: noncash items and interest
Depreciation 1,714,677 2,590,358 2,988,879
Goodwill amortization and impairment 1,915,740 217,580 662,591
Provision for bad debts 401,418 379,783 412,770
Interest income (1,753,654) (1,520,858) (1,693,045)
Interest expense 5,343,433 5,586,552 6,370,160
Forex gain/loss 4,662 (72,424) (795,581)
Equity from net income of associates and jointly-controlled entities (3,202,301) (3,252,898) (4,708,178)
EBITDA 11,565,152 14,555,119 18,337,888
Adjustments: cash items not from operating activities
Gain from sale of investments (1,146,473) (1,385,523) (2,211,206)
Dividend income (95,774) (180,250) (73,500)
Investment income (889,407) (285,227) (73,500)
Operating income before working capital changes 9,433,499 12,704,120 15,979,683
Working capital changes
Accounts and notes receivable - gross (21,503,101) (13,053,888) 20,411,264
Inventories (662,512) (568,003) (256,869)
Other current assets (914,150) (396,132) 756,251
Noncurrent accounts and notes receivable (279,980) 1,539,888 1,259,908
Accounts payable and accrued expenses 27,648,653 (14,794,293) (6,404,659)
Short term debt - - (2,504,007)
Other current liabilities 198,138 (270,789) 217,952
Payment for income tax (600,070) (1,848,855) (3,076,627)
Net cash from operating activities 13,320,478 (16,687,952) 26,382,896
Cash flow from investing activities
Investments in associates and jointly-controlled entities - net 7,725,836 (5,000,000) (5,000,000)
Proceeds from interest receivable 1,636,951 1,764,277 954,091
Investment properties
Acquisition - (4,359,850) -
Disposal 2,350,817 2,876,535 3,352,123
Gain from Disposal 1,146,473 1,385,523 2,211,206
Other noncurrent assets 162,307 (430,113) (178,537)
Dividend income (from investment in bonds and other securities) 95,774 180,250 73,500
Investment income (from investment property) 889,407 285,227 73,500
Other noncurrent liabilities 3,276,707 (413,540) 848,997
Net cash from investing activities 17,284,271 (3,711,691) 2,334,879
Cash flow from financing activities
Proceeds from bond issuance - 25,000,000 -
Payments for debt (9,026,040) (9,359,594) (9,359,594)
Payments for interest payable (4,571,482) (4,808,743) (6,822,106)
Net cash from financing activities (13,597,522) 10,831,664 (16,181,700)
Net cash flow 17,007,228 (9,567,980) 12,536,074
Beginning cash 10,391,301 27,398,529 17,830,549
Ending cash 27,398,529 17,830,549 30,366,623
Tempe, Inc.
Balance Sheet Schedules
As of December 31
Annex B-4
(Amounts in Php '000s) 2005 2006 2007
Schedule 1: Interest Receivable
Interest Receivable, Beginning 234,284 350,987 107,568
Interest Income 1,753,654 1,520,858 1,693,045
Interest Receivable, end 350,987 107,568 846,523
Interest Received 1,636,951 1,764,277 954,091
Schedule 2: Interest Payable
Interest Payable, Beginning 1,899,765 2,671,717 3,449,526
Interest Expense 5,343,433 5,586,552 6,370,160
Interest Payable, End 2,671,717 3,449,526 2,997,580
Interest Paid 4,571,482 4,808,743 6,822,106
Schedule 3: Income Tax Payable
Interest Payable, Beginning 457,653 1,088,603 1,334,552
Interest Expense 1,231,020 2,094,805 3,369,601
Interest Payable, End 1,088,603 1,334,552 1,627,526
Interest Paid 600,070 1,848,855 3,076,627
Schedule 4: Investment Property
Investment Property, beginning 16,794,662 14,443,845 15,927,160
Investment Property, end 14,443,845 15,927,160 12,575,037
difference 2,350,817 (1,483,315) 3,352,123
Acquisitions (book value) 4,359,850
Disposals (book value) 2,350,817 2,876,535 3,352,123
Schedule 5: Bank interest
bank debt beginning 47,543,879 38,517,839 29,158,245
Bank debt, end 38,517,839 29,158,245 19,798,651
Reclassification to current debt 9,026,040 9,359,594 9,359,594
Short term debt beginning 2,504,007 2,504,007 2,504,007
Short term debt end 2,504,007 2,504,007 -
Payments made - - 2,504,007
Current portion of bank debt, beginning 9,359,594 9,359,594 9,359,594
Current portion of bank debt, end 9,359,594 9,359,594 9,359,594
Difference - - -
Reclassification from long-term bank debt 9,026,040 9,359,594 9,359,594
Payments made 9,026,040 9,359,594 9,359,594
Schedule 6: Bonds issued
Bonds - beginning balance - - 25,000,000
Bonds - ending balance - 25,000,000 25,000,000
Cash from bonds - 25,000,000 -
Tempe, Inc.
Profit and Loss Schedules
For the years ended December 31
Annex B-5
(Amounts in Php '000s) 2005 2006 2007 Notes
Schedule 1: Components of Depreciation Expense
Depreciation Expense
In Cost of sales and services 1,243,495 1,960,042 1,971,932
in General and administrative expenses 471,182 630,316 1,016,947
Total Depreciation Expense 1,714,677 2,590,358 2,988,879
Schedule 2: Components of General and Administrative Expense
General and administrative expenses
Personnel costs 3,110,135 3,959,265 4,168,554
Depreciation and amortization 471,182 630,316 1,016,947
Profesisonal fees 375,825 574,881 796,979
Taxes and licenses 240,930 349,229 530,583
Transportation and travel 246,878 347,977 376,087
Rental and utilities 157,090 253,519 357,666
Advertising and promotion 129,398 158,455 234,330
Research and development 49 48,561 189,693
Supplies 58,515 111,509 161,459
Postal and Communication 93,234 126,733 153,649
Entertainment 123,474 188,911 141,782
Repairs and maintenance 79,487 81,239 132,257
Provision for doubtful accounts 401,418 379,783 412,770
Donations and contributions 99,927 106,969 126,541
Dues and fees 64,819 65,381 61,033
Insurance 39,319 45,088 59,703
Contract Labor 20,405 23,051 36,952
Others 599,239 557,294 826,390
Total General and administrative expenses 6,311,324 8,008,161 9,783,375
Schedule 3: Other income
Other income
Gain on sale of investments 1,146,473 1,385,523 2,211,206 This is associated with investment property sold
Foreign exchange gain (loss) (4,662) 72,424 795,581 Forex gain/loss is due to the investment in foreign currency bonds
Management and marketing fees 382,050 590,066 485,802 Management and marketing fees are received in cash
Dividend income 95,774 180,250 73,500 Dividend income is received in cash
Investment Income 889,407 285,227 73,500 Investment income is received in cash
Miscellaneous 3,439,418 4,484,520 7,088,787 Miscellaneous Income is received in cash
5,948,459 6,998,009 10,728,375
Schedule 4: Interest Charges
Interest expense and other financing charges
Long term debt 3,630,831 4,160,169 3,506,030
Short-term debt 845,377 512,997 321,891
Bond issuance 562,500 2,250,000 This is associated with bonds issued at the beginning of October 2006, at 9% coupon rate
Others 867,225 350,886 292,239
Total Interest and financing charges 5,343,433 5,586,552 6,370,160
Schedule 5: Other Charges
Other charges
Goodwill amortization and impairment loss 1,915,740 217,580 662,591
Total other charges 303,560 169,339 907,353 Assumed to be cash charges
2,219,300 386,919 1,569,944