6-K 1 phi-6k_20201231.htm PHI-6K 4Q2020 phi-6k_20201231.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

March 4, 2021

 

PLDT INC.

(Translation of registrant’s name into English)

 

Ramon Cojuangco Building

Makati Avenue, Makati City

Philippines

(Address of registrant’s principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F   Form 40-F  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (1):     Yes      No  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7):     Yes      No  

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.     Yes      No  

 

 


 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

Registrant:    PLDT Inc.

 

 

 

 

 

Signature and Title:

/s/ Manuel V. Pangilinan

 

Manuel V. Pangilinan

 

Chairman of the Board

 

President and Chief Executive Officer

 

 

 

 

Signature and Title:

/s/ Anabelle Lim-Chua

 

Anabelle Lim-Chua

 

Senior Vice President

 

(Principal Financial Officer)

 

 

 

 

Signature and Title:

/s/ Gil Samson D. Garcia

 

Gil Samson D. Garcia

 

First Vice President

 

(Principal Accounting Officer)

 

 

 

 

 

 

 

 

Date: March 4, 2021

 


 

 

SEC Number  

PW-55

File Number  

 

 

 

 

 

PLDT Inc.

 

(Company’s Full Name)

 

Ramon Cojuangco Building

Makati Avenue, Makati City

 

(Company’s Address)

 

 

(632) 8816-8556

 

(Telephone Number)

 

 

Not Applicable

 

(Fiscal Year Ending)

(month & day)

 

 

SEC Form 17-C

 

Form Type

 

 

Not Applicable

 

Amendment Designation (if applicable)

 

 

December 31, 2020

 

Period Ended Date

 

 

Not Applicable

 

(Secondary License Type and File Number)

 

 


 

March 4, 2021

 

Securities & Exchange Commission

Secretariat Building, PICC Complex

Roxas Boulevard, Pasay City

 

Attention:

 

Mr. Vicente Graciano P. Felizmenio, Jr.

 

 

Director – Markets and Securities Regulations Dept.

 

Gentlemen:

 

In accordance with Section 17.1(b) of the Securities Regulation Code and SRC Rule 17.1.1.1.2, we submit herewith two (2) copies of SEC Form 17-C with Management’s Discussion and Analysis and accompanying consolidated financial statements as at and for the year ended December 31, 2020.

 

Very truly yours,

 

 

 

 

 

/s/ Ma. Lourdes C. Rausa-Chan

 

MA. LOURDES C. RAUSA-CHAN

 

Corporate Secretary

 

 

 

 


 

COVER SHEET

 

SEC Registration Number

P

W

-

5

5

 

 

 

 

 

 

 

Company Name

P

L

D

T

 

I

N

C

.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal Office (No./Street/Barangay/City/Town/Province)

R

A

M

O

N

 

C

O

J

U

A

N

G

C

O

 

B

U

I

L

D

I

N

G

 

 

 

 

 

 

 

M

A

K

A

T

I

 

A

V

E

N

U

E

 

M

A

K

A

T

I

 

C

I

T

Y

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Form Type

 

 

 

Department requiring the report

 

 

 

Secondary License Type, If Applicable

 

 

1

7

-

C

 

 

 

 

 

 

 

M

S

R

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPANY INFORMATION

 

Company’s Email Address

 

Company’s Telephone Number/s

 

Mobile Number

 

 

gdgarcia@pldt.com.ph

 

(02) 8816-8056

 

 

 

 

 

No. of Stockholders

 

Annual Meeting

Month/Day

 

Fiscal Year

Month/Day

 

 

11,568

as at January 31, 2021

 

Every 2nd Tuesday in June

 

December 31

 

CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation

Name of Contact Person

 

Email Address

 

Telephone Number/s

 

Mobile Number

Gil Samson D. Garcia

 

gdgarcia@pldt.com.ph

 

(02) 8816-8056

 

 

 

Contact Person’s Address

12/F Ramon Cojuangco Bldg. Makati Ave., Makati City

Note:  In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.

 

 

 


 

SECURITIES AND EXCHANGE COMMISSION

 

SECURITIES AND EXCHANGE COMMISSION

CURRENT REPORT UNDER SECTION 17

OF THE SECURITIES REGULATION CODE

AND SRC RULE 17.1

 

 

1.

March 4, 2021

Date of Report (Date of earliest event reported)

 

2.

SEC Identification Number PW-55

 

3.

BIR Tax Identification No. 000-488-793

 

4.

PLDT INC.

Exact name of issuer as specified in its charter

 

5.

PHILIPPINES

Province, country or other jurisdiction of Incorporation

 

6.

____________ (SEC Use Only)

 

Industry Classification Code

 

 

 

 

 

 

7.

Ramon Cojuangco Building, Makati Avenue, Makati City

1200

 

Address of principal office

Postal Code

 

8.

(632) 8816-8553

Issuer's telephone number, including area code

 

9.

Not Applicable

Former name or former address, if changed since last report

 

10.

Securities registered pursuant to Sections 8 and 12 of the Securities Regulation Code and Sections 4 and 8 of the Revised Securities Act

 

Title of Each Class

Number of Shares of Common Stock Outstanding

 

 

 

Common Stock

 

216,055,775 (1)

Amount of Debt Outstanding

 

Php222,765 million as at December 31, 2020

_____________

(1)

Represents the total outstanding common shares (net of 2,724,111 Treasury shares).

 

 


 

TABLE OF CONTENTS

 

PART I -

 

FINANCIAL INFORMATION

 

1

Item 1.

 

Consolidated Financial Statements

 

1

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

1

 

 

Financial Highlights and Key Performance Indicators

 

2

 

 

Performance Indicators

 

3

 

 

Overview

 

4

 

 

Management’s Financial Review

 

4

 

 

Results of Operations

 

5

 

 

Wireless

 

10

 

 

Revenues

 

10

 

 

Service Revenues

 

11

 

 

Non-Service Revenues

 

14

 

 

Expenses

 

14

 

 

Other Income (Expenses)

 

15

 

 

Provision for Income Tax

 

16

 

 

Net Income (Loss)

 

16

 

 

EBITDA

 

16

 

 

Core Income

 

16

 

 

Fixed Line

 

16

 

 

Revenues

 

16

 

 

Service Revenues

 

16

 

 

Non-Service Revenues

 

17

 

 

Expenses

 

18

 

 

Other Income (Expenses)

 

19

 

 

Provision for Income Tax

 

19

 

 

Net Income

 

19

 

 

EBITDA

 

19

 

 

Core Income

 

19

 

 

Others

 

19

 

 

Expenses

 

19

 

 

Other Income (Expenses)

 

20

 

 

Net Income

 

20

 

 

Core Income

 

20

 

 

Liquidity and Capital Resources

 

20

 

 

Operating Activities

 

21

 

 

Investing Activities

 

22

 

 

Financing Activities

 

22

 

 

Changes in Financial Conditions

 

24

 

 

Off-Balance Sheet Arrangements

 

24

 

 

Equity Financing

 

24

 

 

Contractual Obligations and Commercial Commitments

 

24

 

 

Quantitative and Qualitative Disclosures about Market Risks

 

25

 

 

Impact of Inflation and Changing Prices

 

25

PART II

 

OTHER INFORMATION

 

26

 

 

Related Party Transactions

 

31

ANNEX

 

Aging of Accounts Receivable

 

A-1

 

 

Financial Soundness Indicators

 

A-2

 

 

SIGNATURES

 

S-1

 

 

 

 


 

 

 

 

 

PART I – FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements

Our consolidated financial statements as at and for the years ended December 31, 2020 and 2019 and related notes (pages F-1 to F-177) are filed as part of this report on Form 17-C.

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

In the following discussion and analysis of our financial condition and results of operations, unless the context indicates or otherwise requires, references to “we,” “us,” “our” or “PLDT Group” mean PLDT Inc. and its consolidated subsidiaries, and references to “PLDT” mean PLDT Inc., not including its consolidated subsidiaries (please see Note 2 – Summary of Significant Accounting Policies to the accompanying unaudited consolidated financial statements for the list of these subsidiaries, including a description of their respective principal business activities and PLDT’s direct and/or indirect equity interest).

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and the related notes.  Our unaudited consolidated financial statements, and the financial information discussed below, have been prepared in accordance with Philippine Financial Reporting Standards, or PFRS, which is virtually converged with International Financial Reporting Standards as issued by the International Accounting Standards Board. PFRS differs in certain significant respects from generally accepted accounting principles, or GAAP, in the U.S.

The financial information appearing in this report and in the accompanying unaudited consolidated financial statements is stated in Philippine pesos.  Unless otherwise indicated, translations of Philippine peso amounts into U.S. dollars in this report and in the accompanying unaudited consolidated financial statements were made based on the exchange rate of Php48.02 to US$1.00, the exchange rate as at December 31, 2020 quoted through the Bankers Association of the Philippines.

Some information in this report may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended.  We have based these forward-looking statements on our current beliefs, expectations and intentions as to facts, actions and events that will or may occur in the future. Such statements generally are identified by forward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,” “expect,” “may,” “will” or other similar words.

A forward-looking statement may include a statement of the assumptions or bases underlying the forward-looking statement.  We have chosen these assumptions or bases in good faith.  These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our control.  In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance.  Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors.  When considering forward-looking statements, you should keep in mind the description of risks and other cautionary statements in this report.  You should also keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as at the date on which we made it.  New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us.  We have no duty to, and do not intend to, update or revise the statements in this report after the date hereof.  In light of these risks and uncertainties, you should keep in mind that actual results may differ materially from any forward-looking statement made in this report or elsewhere.

 

1


 

 

 

 

Financial Highlights and Key Performance Indicators

 

 

 

Years ended December 31,

 

 

Increase (Decrease)

 

 

 

2020

 

 

2019(1)

 

 

Amount

 

 

%

 

(amounts in million Php, except for EBITDA margin and earnings

   per common share)

 

 

 

 

 

 

 

 

 

 

 

Consolidated Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

181,004

 

 

 

169,187

 

 

 

11,817

 

 

 

7

 

Expenses

 

 

144,822

 

 

 

129,786

 

 

 

15,036

 

 

 

12

 

Other expenses – net

 

 

(3,161

)

 

 

(7,065

)

 

 

3,904

 

 

 

55

 

Income before income tax

 

 

33,021

 

 

 

32,336

 

 

 

685

 

 

 

2

 

Net income

 

 

24,580

 

 

 

22,786

 

 

 

1,794

 

 

 

8

 

Core income

 

 

27,129

 

 

 

25,111

 

 

 

2,018

 

 

 

8

 

Telco core income

 

 

28,087

 

 

 

27,080

 

 

 

1,007

 

 

 

4

 

EBITDA

 

 

86,158

 

 

 

79,815

 

 

 

6,343

 

 

 

8

 

EBITDA margin(2)

 

 

50

%

 

 

49

%

 

 

 

 

 

 

Reported earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

112.12

 

 

 

103.97

 

 

 

8.15

 

 

 

8

 

Diluted

 

 

112.12

 

 

 

103.97

 

 

 

8.15

 

 

 

8

 

Core earnings per common share(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

125.29

 

 

 

115.95

 

 

 

9.34

 

 

 

8

 

Diluted

 

 

125.29

 

 

 

115.95

 

 

 

9.34

 

 

 

8

 

 

 

 

December 31,

 

 

Increase (Decrease)

 

 

 

2020

 

 

2019

 

 

Amount

 

 

%

 

(amounts in million Php, except for net debt to equity ratio)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Financial Position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

575,846

 

 

 

525,027

 

 

 

50,819

 

 

 

10

 

Property and equipment

 

 

260,868

 

 

 

232,134

 

 

 

28,734

 

 

 

12

 

Cash and cash equivalents and short-term investments

 

 

41,226

 

 

 

24,683

 

 

 

16,543

 

 

 

67

 

Total equity attributable to equity holders of PLDT

 

 

115,408

 

 

 

111,987

 

 

 

3,421

 

 

 

3

 

Long-term debt, including current portion

 

 

222,765

 

 

 

192,556

 

 

 

30,209

 

 

 

16

 

Net debt(4) to equity ratio

 

1.56x

 

 

1.50x

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

 

Change

 

 

 

2020

 

 

2019

 

 

Amount

 

 

%

 

(amounts in million Php, except for operational data)

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

87,515

 

 

 

69,392

 

 

 

18,123

 

 

 

26

 

Net cash used in investing activities

 

 

(74,348

)

 

 

(84,316

)

 

 

9,968

 

 

 

12

 

Payment for purchase of property and equipment, including

   capitalized interest

 

 

(78,100

)

 

 

(89,701

)

 

 

11,601

 

 

 

13

 

Net cash provided by (used in) financing activities

 

 

3,703

 

 

 

(11,613

)

 

 

15,316

 

 

 

132

 

Operational Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of mobile subscribers

 

 

72,933,839

 

 

 

73,118,155

 

 

 

(184,316

)

 

 

 

Prepaid

 

 

70,779,021

 

 

 

70,721,789

 

 

 

57,232

 

 

 

 

Postpaid

 

 

2,154,818

 

 

 

2,396,366

 

 

 

(241,548

)

 

 

(10

)

Number of broadband subscribers

 

 

3,090,118

 

 

 

2,161,484

 

 

 

928,634

 

 

 

43

 

Fixed Line broadband

 

 

2,273,602

 

 

 

1,931,333

 

 

 

342,269

 

 

 

18

 

Fixed Wireless broadband

 

 

816,516

 

 

 

230,151

 

 

 

586,365

 

 

 

255

 

Number of fixed line subscribers

 

 

3,042,815

 

 

 

2,765,209

 

 

 

277,606

 

 

 

10

 

Number of employees:

 

 

18,848

 

 

 

18,784

 

 

 

64

 

 

 

 

Fixed Line

 

 

13,065

 

 

 

12,877

 

 

 

188

 

 

 

1

 

LEC

 

 

11,427

 

 

 

10,878

 

 

 

549

 

 

 

5

 

Others

 

 

1,638

 

 

 

1,999

 

 

 

(361

)

 

 

(18

)

Wireless

 

 

5,783

 

 

 

5,907

 

 

 

(124

)

 

 

(2

)

 

(1)

Certain amounts for the year ended December 31, 2019 were reclassified to conform with the current presentation.

(2)

EBITDA margin for the period is measured as EBITDA divided by service revenues.

(3)

Core earnings per common share, or EPS, for the period is measured as core income divided by the weighted average number of outstanding common shares for the period.

(4)

Net debt is derived by deducting cash and cash equivalents, short-term investments and debt instruments at amortized cost from total debt (long-term debt, including current portion).

2


 

 

 

 

 

Exchange Rates – per US$

 

Month end

rates

 

 

Weighted

average rates

during the year

 

December 31, 2020

 

 

48.02

 

 

 

49.63

 

December 31, 2019

 

 

50.80

 

 

 

51.79

 

December 31, 2018

 

 

52.56

 

 

 

52.68

 

 

Performance Indicators

We use a number of non-GAAP performance indicators to monitor financial performance.  These are summarized below and discussed later in this report.

EBITDA  

EBITDA is measured as net income excluding depreciation and amortization, amortization of intangible assets, asset impairment on noncurrent assets, financing costs – net, interest income, equity share in net earnings (losses) of associates and joint ventures, foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net, provision for (benefit from) income tax and other income – net.  EBITDA is monitored by management for each business unit separately for purposes of making decisions about resource allocation and performance assessment.  EBITDA is presented because our management believes that it is widely used by investors in their analysis of the performance of PLDT and can assist them in their comparison of PLDT’s performance with those of other companies in the technology, media and telecommunications sector.  We also present EBITDA because it is used by some investors as a way to measure a company’s ability to incur and service debt, make capital expenditures and meet working capital requirements.  Companies in the technology, media and telecommunications sector have historically reported EBITDA as a supplement to financial measures in accordance with PFRS.  EBITDA should not be considered as an alternative to net income as an indicator of our performance, nor should EBITDA be considered as an alternative to cash flows from operating activities, as a measure of liquidity or as an alternative to any other measure determined in accordance with PFRS.  Unlike net income, EBITDA does not include depreciation and amortization, and financing costs and, therefore, does not reflect current or future capital expenditures or the cost of capital.  We compensate for these limitations by using EBITDA as only one of several comparative tools, together with PFRS-based measurements, to assist in the evaluation of operating performance. Such PFRS-based measurements include income before income tax, net income, and operating, investing and financing cash flows.  We have significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in EBITDA.  Our calculation of EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

Core Income and Telco Core Income

Core income is measured as net income attributable to equity holders of PLDT (net income less net income attributable to noncontrolling interests), excluding foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net (excluding hedge costs), asset impairment on noncurrent assets, non-recurring gains (losses), net of tax effect of aforementioned adjustments, as applicable, and similar adjustments to equity share in net earnings (losses) of associates and joint ventures.  Core income results are monitored by management for each business unit separately for purposes of making decisions about resource allocation and performance assessment.  

 

Also, Telco core income is measured as net income attributable to equity holders of PLDT (net income less net income attributable to noncontrolling interests), excluding foreign exchange gains (losses) – net, gains (losses) on derivative financial instruments – net (excluding hedge costs), asset impairment on noncurrent assets, non-recurring gains (losses), net of tax effect of aforementioned adjustments, as applicable, and similar adjustments to equity share in net earnings (losses) of associates and joint ventures, adjusted for the effect of the share in Voyager Innovations Holdings, Pte. Ltd., or VIH, losses, asset sales, and accelerated depreciation.  Telco core income is used by the management as a basis for determining the level of dividend payouts to shareholders and a basis of granting incentives to employees.  

 

3


 

 

 

 

Core income and Telco core income should not be considered as an alternative to income before income tax or net income determined in accordance with PFRS as an indicator of our performance.  Unlike net income, core income does not include foreign exchange gains and losses, gains and losses on derivative financial instruments, asset impairments and non-recurring gains and losses.  We compensate for these limitations by using core income as only one of several comparative tools, together with PFRS-based measurements, to assist in the evaluation of operating performance.  Such PFRS-based measurements include income before income tax and net income.  Our calculation of core income may be different from the calculation methods used by other companies and, therefore, comparability may be limited.  

Overview

We are one of the leading telecommunications and digital services providers in the Philippines, in terms of both subscribers and revenues, serving the fixed line, wireless and broadband markets.  Through our three principal business segments, Wireless, Fixed Line and Others, we offer a diverse range of telecommunications and digital services across our extensive fiber optic backbone and wireless and fixed line networks.

We serve 79.1 million users through the provision of mobile, fixed line and data services.  In addition to the business segments discussed below, PLDT has found it beneficial to view its business from a customer-served perspective.  Accordingly, we also assign metrics along the following marketing verticals: Home, Individual, Enterprise and International customers.

Our three business units are as follows:

 

Wireless mobile telecommunications services provided by Smart Communications, Inc., or Smart, and Digitel Mobile Philippines, Inc., or DMPI, our mobile service providers; Smart Broadband, Inc., or SBI, and Primeworld Digital Systems, Inc., or PDSI, our wireless broadband service providers; and certain subsidiaries of PLDT Global Corporation, or PLDT Global, our mobile virtual network operations, or MVNO, provider;

 

Fixed Line fixed line telecommunications services primarily provided by PLDT.  We also provide fixed line services through PLDT’s subsidiaries, namely, PLDT Clark Telecom, Inc., Bonifacio Communications Corporation and PLDT Global and certain subsidiaries; data center, cloud, cyber security services, managed information technology services and resellership through ePLDT, Inc., or ePLDT, IP Converge Data Services, Inc., or IPCDSI, and subsidiary, or IPCDSI Group, ABM Global Solutions, Inc., or AGS, and its subsidiaries, or AGS Group, Curo Teknika, Inc. and ePDS, Inc., or ePDS; full service customer rewards and loyalty programs provided by MVP Rewards and Loyalty Solutions, Inc., or MRSI; and distribution of Filipino channels and content through Pilipinas Global Network Limited and its subsidiaries; and

 

Others PLDT Communications and Energy Ventures, Inc., or PCEV, PLDT Global Investment Holdings, Inc., PLDT Global Investments Corporation, or PGIC, PLDT Digital Investments Pte. Ltd., or PLDT Digital, and its subsidiaries, our investment companies.

As at December 31, 2020, our chief operating decision maker, or our Management Committee, views our business activities in three business units: Wireless, Fixed Line and Others.

Management’s Financial Review

In addition to consolidated net income, we use EBITDA and core income to assess our operating performance. The reconciliation of our consolidated net income to our consolidated EBITDA and our consolidated core income and Telco core income for the years ended December 31, 2020 and 2019 are set forth below.

4


 

 

 

 

The following table shows the reconciliation of our consolidated net income to our consolidated EBITDA for the years ended December 31, 2020 and 2019:

 

 

 

2020

 

 

2019

 

 

 

(amounts in million Php)

 

Consolidated net income

 

 

24,580

 

 

 

22,786

 

Add (deduct) adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

47,480

 

 

 

39,656

 

Financing costs – net

 

 

10,086

 

 

 

8,553

 

Provision for income tax

 

 

8,441

 

 

 

9,550

 

Amortization of intangible assets

 

 

2,496

 

 

 

758

 

Equity share in net losses of associates and joint ventures

 

 

2,328

 

 

 

1,535

 

Losses on derivative financial instruments – net

 

 

378

 

 

 

284

 

Impairment of investments

 

 

60

 

 

 

34

 

Interest income

 

 

(1,210

)

 

 

(1,745

)

Foreign exchange gains – net

 

 

(1,488

)

 

 

(424

)

Other income – net

 

 

(6,993

)

 

 

(1,172

)

Total adjustments

 

 

61,578

 

 

 

57,029

 

Consolidated EBITDA

 

 

86,158

 

 

 

79,815

 

 

The following table shows the reconciliation of our consolidated net income to our consolidated core income and telco core income for the years ended December 31, 2020 and 2019:

 

 

 

2020

 

 

2019

 

 

 

(amounts in million Php)

 

Consolidated net income

 

 

24,580

 

 

 

22,786

 

Add (deduct) adjustments:

 

 

 

 

 

 

 

 

Manpower rightsizing program

 

 

2,625

 

 

 

3,296

 

Sun Trademark amortization

 

 

1,877

 

 

 

 

Losses from changes in fair value of financial assets at FVPL

 

 

599

 

 

 

675

 

Losses on derivative financial instruments – net, excluding hedge costs

 

 

284

 

 

 

233

 

Impairment of investments

 

 

60

 

 

 

34

 

Core income adjustment on equity share in net losses (income) of associates and joint ventures

 

 

(6

)

 

 

(226

)

Net income attributable to noncontrolling interests

 

 

(296

)

 

 

(265

)

Foreign exchange gains – net

 

 

(1,488

)

 

 

(424

)

Net tax effect of aforementioned adjustments

 

 

(1,106

)

 

 

(998

)

Total adjustments

 

 

2,549

 

 

 

2,325

 

Consolidated core income

 

 

27,129

 

 

 

25,111

 

Add (deduct) adjustments:

 

 

 

 

 

 

 

 

Share in VIH losses

 

 

1,954

 

 

 

1,776

 

Accelerated depreciation, net

 

 

1,496

 

 

 

378

 

Loss (gain) on sale of Rocket Internet shares

 

 

364

 

 

 

(185

)

Gain from condonation of debt

 

 

(240

)

 

 

 

Voyager gain on dilution, net

 

 

(323

)

 

 

 

Gain on sale and leaseback of Smart Headquarters, net

 

 

(2,293

)

 

 

 

Total adjustments

 

 

958

 

 

 

1,969

 

Telco core income

 

 

28,087

 

 

 

27,080

 

 

Results of Operations

The following table shows the contribution by each of our business segments to our consolidated revenues, expenses, other income (expense), income (loss) before income tax, provision for (benefit from) income tax, net income (loss)/segment profit (loss), EBITDA, EBITDA margin, core income and telco core income for the years ended December 31, 2020 and 2019.  In each of the years ended December 31, 2020 and 2019, majority of our revenues are derived from our operations within the Philippines.  Our revenues derived from outside the Philippines consist primarily of revenues from incoming international calls to the Philippines.  

5


 

 

 

 

 

 

 

Wireless

 

 

Fixed Line

 

 

Others

 

 

Inter-segment

Transactions

 

 

Consolidated

 

 

 

(amounts in million Php, except for EBITDA margin)

 

For the year ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

104,211

 

 

 

98,739

 

 

 

 

 

 

(21,946

)

 

 

181,004

 

Expenses

 

 

82,946

 

 

 

84,717

 

 

 

12

 

 

 

(22,853

)

 

 

144,822

 

Other income (expenses) – net

 

 

(2,940

)

 

 

4,221

 

 

 

(923

)

 

 

(3,519

)

 

 

(3,161

)

Income (loss) before income tax

 

 

18,325

 

 

 

18,243

 

 

 

(935

)

 

 

(2,612

)

 

 

33,021

 

Provision for (benefit from) income tax

 

 

3,901

 

 

 

3,734

 

 

 

(617

)

 

 

1,423

 

 

 

8,441

 

Net income (loss)/Segment profit (loss)

 

 

14,424

 

 

 

14,509

 

 

 

(318

)

 

 

(4,035

)

 

 

24,580

 

EBITDA

 

 

60,272

 

 

 

33,405

 

 

 

(12

)

 

 

(7,507

)

 

 

86,158

 

EBITDA margin(1)

 

 

61

%

 

 

34

%

 

 

 

 

 

 

 

 

50

%

Core income (loss)

 

 

15,698

 

 

 

15,463

 

 

 

193

 

 

 

(4,225

)

 

 

27,129

 

Telco core income

 

 

16,475

 

 

 

13,649

 

 

 

2,160

 

 

 

(4,197

)

 

 

28,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

96,906

 

 

 

89,406

 

 

 

 

 

 

(17,125

)

 

 

169,187

 

Expenses

 

 

74,359

 

 

 

72,385

 

 

 

101

 

 

 

(17,059

)

 

 

129,786

 

Other income (expenses) – net

 

 

(5,023

)

 

 

(259

)

 

 

(2,112

)

 

 

329

 

 

 

(7,065

)

Income (loss) before income tax

 

 

17,524

 

 

 

16,762

 

 

 

(2,213

)

 

 

263

 

 

 

32,336

 

Provision for (benefit from) income tax

 

 

4,423

 

 

 

5,341

 

 

 

(444

)

 

 

230

 

 

 

9,550

 

Net income (loss)/Segment profit (loss)

 

 

13,101

 

 

 

11,421

 

 

 

(1,769

)

 

 

33

 

 

 

22,786

 

EBITDA

 

 

52,789

 

 

 

33,162

 

 

 

(101

)

 

 

(6,035

)

 

 

79,815

 

EBITDA margin(1)

 

 

58

%

 

 

38

%

 

 

 

 

 

 

 

 

49

%

Core income (loss)

 

 

13,685

 

 

 

12,531

 

 

 

(1,151

)

 

 

46

 

 

 

25,111

 

Telco core income

 

 

14,063

 

 

 

12,531

 

 

 

440

 

 

 

46

 

 

 

27,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

7,305

 

 

 

9,333

 

 

 

 

 

 

(4,821

)

 

 

11,817

 

Expenses

 

 

8,587

 

 

 

12,332

 

 

 

(89

)

 

 

(5,794

)

 

 

15,036

 

Other income (expenses) – net

 

 

2,083

 

 

 

4,480

 

 

 

1,189

 

 

 

(3,848

)

 

 

3,904

 

Income (loss) before income tax

 

 

801

 

 

 

1,481

 

 

 

1,278

 

 

 

(2,875

)

 

 

685

 

Provision for (benefit from) income tax

 

 

(522

)

 

 

(1,607

)

 

 

(173

)

 

 

1,193

 

 

 

(1,109

)

Net income (loss)/Segment profit (loss)

 

 

1,323

 

 

 

3,088

 

 

 

1,451

 

 

 

(4,068

)

 

 

1,794

 

EBITDA

 

 

7,483

 

 

 

243

 

 

 

89

 

 

 

(1,472

)

 

 

6,343

 

Core income (loss)

 

 

2,013

 

 

 

2,932

 

 

 

1,344

 

 

 

(4,271

)

 

 

2,018

 

Telco core income

 

 

2,412

 

 

 

1,118

 

 

 

1,720

 

 

 

(4,243

)

 

 

1,007