COVERSHEET

1 5 9 2 3
S.E.C.RegistrationNumber

M A N I L A

B U L L E T I N

P U B L I S H I N G C O R P O R A T I O N

(Company'sFullName) M U R A L L A C O R E R R E C O L E T O S S T R E E T

I N T R A M U R O S , M A N I L A (BusinessAddress:No.StreetCity/Town/Province) ELIZABETHT.MORALES
ContactPerson SECFORM 1 2 3 1 MonthDay FiscalYear

5278121
CompanyTelephoneNumber

1 7 A
FORMTYPE Month Day AnnualMeeting

SecondaryLicenseType.IfApplicable Dept.RequiringthisDoc.

AmendedArticlesNumber/Section

TotalAmountofBorrowings TotalNo.ofStockholders Domestic Foreign

TobeaccomplishedbySECPersonnelconcerned
FileNumber LCU

DocumentI.D. Cashier

STAMPS

ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended 2. SEC Identification Number December 31, 2012 15923 3. BIR Tax Identification No. 000-746-558

4. Exact name of issuer as specified in its charter Manila Bulletin Publishing Corporation 5. Philippines Province, country or other jurisdiction of Incorporation or organization 6. (SEC Use Only) Industry Classification Code

7. Manila Bulletin Building, Muralla corner Recoletos Sts., Intramuros, Manila 0900 Address of principal office Postal Code 8. (632) 527-8121 Issuers telephone number, including area code none Former name, former address, and former fiscal year, if changed since last report

9.

10. Securities registered pursuant to Sections 8 & 12 of the SRC or Sec.4 & 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding And Fully Paid 3,020,960,250 shares

Common Stock

11. Are any or all of these securities listed on the Philippine Stock Exchange? Yes ( X ) No ( )

If yes, state the name of such Stock Exchange and the classes of securities listed therein: Philippine Stock Exchange 12. Check whether the issuer: a. has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines during the preceding twelve ( 12 ) months ( or for such shorter period that the registrant was required to file such reports ); Yes ( X ) No ( ) b. has been subject to such filing requirements for the past ninety ( 90 ) days Yes ( X ) No ( ) Common Stock

BUSINESS AND GENERAL INFORMATION

A. DESCRIPTION OF BUSINESS 1. Form and Year of Organization The Corporation was founded as the Daily Bulletin on February 2, 1900 for the purpose of engaging in the publishing business. It was incorporated on June 12, 1912 as Bulletin Publishing Company and reincorporated on September 25, 1959 as Bulletin Publishing Corporation for a term of 50 years extendable in accordance with law. On June 22, 1989 the corporate name was amended to Manila Bulletin Publishing Corporation. On April 18, 1990 it became a public corporation. Having begun operations on February 2, 1900, Manila Bulletin is now the oldest newspaper published in the country and the second oldest English newspaper in the Far East. When it started publication, the contents of the newspaper mainly centered on the commercial and economic conditions in Panay and Negros. Its issues, focused on business and industry, soon caught the attention of the world. From then on it grew to become a national newspaper. 2. Business of Issuer The Manila Bulletin through its 112 years of faithful service to the country has adopted newspaper industry innovative and pioneering initiatives to keep up with the changing times. As exponent of Philippine Progress, it continues to publish constructive news on national development so that all may work for the success of business and industry, give jobs to the jobless, contribute to the upliftment of the standard of living of our people and reduce poverty. The Manila Bulletin unfailingly provides accurate and unbiased information, and provides positive coverage of the news. It is committed to providing quality news and entertainment to the public. The Manila Bulletin is published seven days a week with the Philippine Panorama magazine on Sunday. Also published with the newspaper is a New York Times section on Saturday, Style Weekend magazine on Friday and Digital Generation magazine every three months. Also published daily are the tabloid newspapers, Tempo in English and Balita in Filipino. The Manila Bulletin publishes monthly magazines in full color, of special interest, catering to various sectors of the reading public. Agriculture Magazine is the leader in promoting trends in farming, fishing crop propagation, livestock raising and other issues of interest both for professionals and hobbyists. The magazine is the premier source of ground breaking developments and applications in agriculture. Most interesting are the entrepreneurial successes of people who have ventured into many of the above endeavors.

Cruising Magazine promotes local tourism and travel. Places in the country have been written about which heretofore have not been known to tourists wanting to enjoy the fresh air, the quiet grandeur of sunset, explore caves, swim along beaches. The magazine publishes stories about places to visit, fiestas to be celebrated, restaurants, lodging, cultural sites, food specialties and handicrafts for pasalubong. All these promote trade in the areas to be visited contributing to the governments drive to enhance tourism and generate income for the far flung localities as well as preserve the culture of the different regions. There is really More Fun in the Philippines. The perfect companion for animal lovers and breeders, Animal Scene gives readers breeding info, addresses veterinary concerns and gives advice on care. It publishes heart-warming stories from fellow animal enthusiast as they sniff out the best in the world of man and animals. The Manila Bulletin Sports Digest reports on the most popular sporting events here and abroad. Packed with game highlights, statistics, and an arenas worth of sports trivia, the magazine has dream line up of sports activities. Sense and Style magazine is full of information of the best and the latest in the fashion and beauty, in food and dining, in home and health, personal growth guide and its empowering ideas and content that perfectly blends fashion, information and action boosting her confidence for the woman to assume greater role to affect change for a better world. To encourage provincial literary talents, preserve the cultures and dialects of the countrys various regions, the Manila Bulletin publishes the weekly vernacular magazines, Liwayway in Tagalog, Bisaya in Cebuano, Bannawag in Ilocano and Hiligaynon in Ilonggo. These magazines which highlight cultural development and stories from different provinces as well as national news of regional concerns are widely read throughout the Philippines and abroad. On anniversary date on February 2, the Manila Bulletin publishes the Manila Bulletin Yearbook which provides valuable information of government officials, civic organizations and notable institutions in the Philippines. It is distributed with the Manila Bulletin issue for the day. The Manila Bulletin Publishing Corporation has a broad ownership of 2,804 stockholders as of December 31, 2012. We continue to insure that corporate profits are being distributed to investors who share with us our confidence in the operations and potential earnings of the Manila Bulletin. Sales of our newspapers and magazines are done through agents, dealers, retailers, subscriptions and direct sales. For advertising services, in addition to our main office which is located in Intramuros, Manila, we have 15 branches where our advertisers can go to, namely: Manila Bulletin - Ayala Avenue, Manila Bulletin - Makati Avenue, Manila Bulletin Ortigas, Manila Bulletin Cubao, Manila Bulletin West Avenue, Manila Bulletin Grace Park, Manila Bulletin Alabang Madrigal Business Park, Manila Bulletin SM Mall of Asia, Manila Bulletin Libertad, Pasay, Manila Bulletin Cebu, Manila Bulletin Davao, Manila Bulletin Naga, Manila Bulletin Cagayan de Oro, Manila Bulletin Ilo-ilo and Manila Bulletin Dumaguete.

Competition Principal competitors of the Manila Bulletin are the Philippine Daily Inquirer and the Philippine Star. Manila Bulletin can effectively compete with these publications because of its balanced, responsible, accurate and comprehensive reporting, and its policy to publish constructive reports that encourage economic growth to gain prosperity in the country. As per BusinessWorld Top 1000 Corporations in the Philippines Volume 25; 2012 issue, for the year 2011, Manila Bulletin ranked 505 based on revenues while Philippine Daily Inquirer and Philippine Star, ranked 607 and 655 respectively. Being in the business for 112 years and for its continuous search for excellence, Manila Bulletin has maintained its leadership in the newspaper industry with its advertisements, circulation and clientele. The Registrant is the first in the newspaper industry in the Philippines to go public. Likewise, it is the first among the major broadsheets in the Philippines to put up a website. It was also the first to offer WAP service, mobile access, online classified ads section, 3D pictures and advertisements propelling Manila Bulletin closer to the hearts of its readers and a significant part of their daily lives.

Sources and availability of Raw Materials and names of principal suppliers Main suppliers of the Registrant are Trust Paper Corporation, UPM - Kymmene Asia Pacific and Paper Corea Inc. for newsprint, Heritage Inks International Corporation and Toyo Ink Corporation for ink and Meralco for power. Because of the volume of newsprint, ink, etc. and the quality required, Manila Bulletin buys only from big reliable suppliers that can deliver the volume and quality of materials required. The Company does not have an exclusive or major contract with any of our principal suppliers.

Disclose how dependent the business is upon a single customer The Corporation derives its income from thousands of its advertisers and sells its newspapers and magazines to the public nationwide. The Company does not have any transaction with or dependence on related parties. The Registrant fully complies with environmental laws as evidenced by the permit secured from the Department of Environment and Natural Resources, which will expire on September 3, 2013. There is no material cost involved to comply with the DENR requirement.

Government Approval of Principal Products or Services As of date of this report, no government approval is needed for any of our principal products or services. Likewise, there are no known probable governmental regulations, which will have direct effect on the business of the Registrant. Amount spent for development activities Advertising and promotion expenses amounts and percentage to total revenues for the last three years were as follows: PERCENT TO TOTAL REVENUES 3.37% 3.20% 2.34%

YEAR 2012 2011 2010

ADS & PROMO EXPENSES PHP 106,451,531 PHP 103,607,849 PHP 72,271,554

Manpower complement As part of our cost reduction program, total number of officers and employees at year end was 578, lower by 48 from the previous year. Thirty three (33) retired, forty two (42) resigned, three (3) were terminated with thirty (30) new hires during the year. The composition of personnel at the end of 2012 and 2011 are shown below. 2012 Officers and supervisors Regular employees Probationary employees 121 439 18 578 2011 128 484 14 626

Health insurance premiums as of November 16, 2012 for 407 rank and file shouldered by the corporation amounted to P3.96 million while the premiums for 132 officers and other employees amounted to P2.18 million, a total of P6.14 million worth of coverage. Management and the Bulletin Progressive Union signed a five year collective bargaining agreement for the period August 10, 2012 to August 2, 2017. The collective bargaining provides an estimated package of P407 million, which among other benefits, includes monthly salary increases totaling P6,500 during the 5-year term and the 5-month salary signing bonus covering 600 employees.

B. DESCRIPTION OF PROPERTY Real estate properties owned and leased by the Corporation are as follows: Real Estate Owned: Location Muralla corner Recoletos & Cabildo Sts., Intramuros, Manila. Area 9,307.00 sqms. Description Site of our main office & plant, houses also 2 state-of-the arts printing presses Presently being used as newsprint warehouse and parking area Manila Bulletin Car Park 2 storey concrete Building Grace Park Branch Warehouse

Cabildo corner San Jose Sts., Intramuros, Manila

671.10 sqms.

Recoletos corner Escuela Sts., Intramuros, Manila Rizal Avenue Extension Corner 10th Avenue Kalookan City Concepcion I , Marikina City Neopolitan Business Park Fairview, Quezon City District of Sambag, Cebu City

588.70 sqms.

403.50 sqms.

20,.000.00 sqms. & 393 sqms. 1,254.00 sqms. 2,750.00 sqms.

Not Occupied Purchased for intended branch site Not Occupied Leased

Samson Road, Kalookan City Prominence I Townhouse/ CondoUnit No. 27 Brentville International Mamplasan, Binan, Laguna 28 West Avenue, Quezon City

279.60 sqms. 180.00 sqms. . (Lot area) 165.94 sqms (Floor area) 1,170.00 sqms.

Purchased for intended branch site Cubao branch

Harvard St., Cubao, Quezon City Nuvali Lakeside Ecozone South Phase 2, Block 1, Lot 3 Sta Rosa, Laguna 141 Rizal St. corner C. Bangoy St., Davao City Penafrancia Avenue,corner Dimasalang, Naga City

654.50 sqms

2,617.00 sqms

Not Occupied

553.00 sqms

Davao branch (Lot and building) Naga Branch (Lot and building)

879.00 sqms.

Location Lot 27, Block 9, Phase 1, Royal Tagaytay Lot 37, Block 40, Splendido, Taal Residential Condominiums:
Unit 107-A, Atrium of Makati Bldg. Unit 106-B, Atrium of Makati Bldg. Makati Avenue, Makati City

Area 800 sqms.

Description Not occupied

299 sqms.

Not occupied

55.25 sqms.

Used as Manila Bulletin Makati Branch Office at Atrium Not occupied Not occupied Used as Manila Bulletin Alabang Branch Office Used as Ortigas Branch Office

State Centre Condominium Seventh floor- Unit No.1-R Seventh floor- Unit No.1-S Condominium 104, South Center Tower - 2206 Market St., Madrigal Business Park , Alabang, Muntinlupa City Robinsons East of Galleria Bldg. Unit 110, Topaz St., Ortigas Center Pasig City

84.16 sqms. 112.02 sqms. 138.82 sqms. plus 2 parking slots 110.72 sqms.

Leased Properties- For Manila Bulletin branches: Location Ayala Avenue Branch Ground Floor, National Life Insurance Bldg., 6762 Ayala Avenue, Makati City West Avenue Branch 106 Ground Floor, Delta Bldg. West Avenue, Quezon City SM Mall of Asia SM Bay Boulevard Pasay City Pasay Branch Taft Avenue corner Libertad St. Pasay City Area Monthly Rental Expiry of Lease

135.00 sqms. 240,159.47

12/31/13

175.00 sqms. 103,594.28

07/31/13

94.32 sqms.

120,258.00

11/30/13

64.80 sqms.

27,500.00

02/01/15

Cebu City Branch D. Jacosalem St., Near Espana St. PARI-AN, Cebu City 489.00 sqms. 20,000.00 Iloilo Branch Quezon corner Delgado, Iloilo City

08/31/13

250.00 sqms 85,000.00

06/15/16

Cagayan de Oro Branch S. Osmena corner Ramonal Cogon, Cagayan de Oro City Major Machinery and Equipment Owned Mitsubishi Tower Presses

66.76 sqms.

22,000.00 Location

03/11/15

Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila

Goss Headliner Offset Machines

Major Machinery and Equipment Owned Speed master 5 Colors Offset Press

Location Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila

Heidelberg Offset Machine

Mailroom Equipment

Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila

Strapping Machine

Ferag Post Press System

Coating machine

Conditions of Major Machinery & Equipment Owned All major machinery and equipment as listed above are in good running condition, properly maintained and currently utilized in printing our newspapers and magazines.

Plans of Major Acquisitions of Properties The Company has no plan for major acquisitions of properties within the next twelve (12) months. Known Trends or Uncertainties At the year-end, the exchange rate of the peso to the dollar stood at P41.05. Any depreciation in the peso to the dollar will have an unfavorable impact on the Corporations operations as this will increase the cost of imported materials such as newsprint, ink, spare parts, supplies and services of technical consultants for the imported machinery and equipment. Prices of newsprint and other items purchased locally will also go up as the higher cost of foreign exchange will make raw materials and labor more costly.

Patent, Trademarks, Etc. 1. Manila Bulletin has no registered patent rights, trademarks, copyrights, franchise, concession and royalty agreements. 2. Permit to operate Emission Source Installations from Department of Environment and Natural Resources- Expiry Date: September 3, 2013 3. Intramuros Administration Permit to operate generator sets, elevator, escalator- Expiry Date : November 12, 2013 C. LEGAL PROCEEDINGS There is no material pending legal proceedings to which the Corporation is a party or of which any of its property is the subject. D. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No special or regular Stockholders meeting were called during the fourth quarter of the calendar year 2011.

E. MARKET FOR ISSUERS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS a. Market Information The Companys shares of stocks is listed and traded at the Philippine Stock Exchange. High and low sales prices for each quarter in 2012 and 2011 are as follows: 2012 First Quarter Second Quarter Third Quarter Fourth Quarter HIGH 0.65 0.70 0.72 0.70 LOW 0.63 0.68 0.71 0.69

2011 First Quarter Second Quarter Third Quarter Fourth Quarter

HIGH 0.63 0.60 0.62 0.61

LOW 0.62 0.59 0.61 0.60

As of the last trading date for the year 2012, high and low sales prices registered at P0.73 and P0.71 respectively. For the first quarter of 2013, average sales prices of Manila Bulletin shares of stocks were at a high of P0.85 and a low of P0.80

b. Holders 1. As of December 31, 2012, the total number of the Registrants Shareholders is 2,804. 2. All of the Companys Shares of Stocks are common shares with equal voting rights and privileges and the Top 20 Shareholders are as follows : MANILA BULLETIN PUBLISHING CORPORATION Top Twenty Stockholders As of December 31, 2012
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 U S AUTOMOTIVE CO. INC. USAUTOCO INC. MENZI TRUST FUND INC. PCD NOMINEE CORPORATION EVERGREEN STOCKBROKERAGE & SEC., INC. EMILIO T. YAP WILLIAM CARLOS UY CHUNG BUNSIT MIRIAM C. CU RICHARD CHING TEODORA D.TAN FLORENZ D &/OR ANITA S. REGALADO FRANCISCO C. CHUA PARITY VALUES INC. PHESCO INCORPORATED UNIMART INC. MAKATI SUPERMARKET CORPORATION PAN MALAYAN MANAGEMENT & INVESTMENT CORP JIMMY SY CARLOS UY CORPORATION 1,641,797,349.00 707,034,899.00 251,901,193.00 129,637,944.00 118,364,675.00 22,348,477.00 7,921,742.00 5,418,617.00 4,787,788.00 4,348,920.00 4,168,891.00 3,960,873.00 3,960,873.00 3,960,873.00 2,302,088.00 1,980,437.00 1,980,437.00 1,584,351.00 54.3469% 23.4043% 8.3384% 4.2913% 3.9181% 0.7398% 0.2622% 0.1794% 0.1585% 0.1440% 0.1380% 0.1311% 0.1311% 0.1311% 0.0762% 0.0656% 0.0656% 0.0524%

19 20

1,584,351.00 1,584,351.00

0.0524% 0.0524%

10

3. Security Ownership of Certain Record and Beneficial Owners of more than 5 % of Registrants voting securities
TITLE OF CLASS NAME & ADDRESS OF OWNER NO. OF SHARES

CITIZEN SHIP

PERCENT

Common Stocks

U.S.Automotive Co. Inc. 100 United Nations Avenue, Manila Authorized Representative: Mr. Basilio C. Yap Relationship to Registrant: Son of Dr. Emilio T. Yap, Chairman of the Board USAUTOCO INC. United Nations Avenue corner San Marcelino St., Manila Authorized Representative: Mr. Basilio C. Yap Relationship to Registrant: Son of Dr. Emilio T. Yap, Chairman of the Board MENZI TRUST FUND, INC. 20F, Pacific Bank Bldg. Ayala Avenue, Makati, Metro Manila Authorized Representative: Atty. Manuel Montecillo Relationship to Registrant: None

Filipino

1,641,797,349.00

54.3469%

Common Stocks

Filipino

707,034,899.00

23.4043%

Common Stocks

Filipino

249,899,193.00

8.2722%

4. The list of Board of Directors as well as their shareholdings are as follows:

OWN ER SHIP

NAME

POSITION Chairman of the Board Vice Chairman/ President Vice Chairman/ Independent Director Vice Chairman/ Independent Director Director Director Director Director Independent Director Director

NUMBER OF SHARES 22,348,477.00 10,500.00 10,000.00 10,000.00 79,224.00 72,734.00 4,319.00 181,865.97 10,000.00 63,378.00

Dr. Emilio T. Yap Atty. Hermogenes P. Pobre Chief Justice Hilario G. Davide, Jr. Secretary Alberto G. Romulo Dr. Emilio C. Yap III Dr. Enrique Y. Yap Jr.* Atty. Miguel B. Varela Mrs. Paciencia M. Pineda Dr. Esperanza I. Cabral Crispulo J. Icban, Jr.
*Elected as Director effective March 21, 2013

B B B B B B B B B B

0.74 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01

11

c. Dividends On July 12, 2012, the Board of Directors declared a cash dividend of 5 % or five centavos (P0.05) per share based on the subscribed and outstanding capital stock of P 3,020,960,250 shares payable on September 3, 2012, to Stockholders of record as of August 8, 2012. Total stock and cash dividends distributed to stockholders of record to date amount to 821.0779% of par value since Manila Bulletin went public on April 18, 1990. As of December 31, 2012, out of its authorized capital of 6 billion shares, 3,020,960,250 shares are issued and outstanding and 9,324,650 shares are treasury stock, a total of 3,030,284,900 shares. The declaration of cash dividend was approved and ratified in the annual stockholders meeting held on July 12, 2012. d. Recent Sales of Unregistered Securities Manila Bulletin Publishing Corporation has not sold any unregistered security. F. FINANCIAL INFORMATION a. MANAGEMENT DISCUSSION AND ANALYSIS

Calendar Year 2012 Compared to Calendar Year 2011

Manila Bulletins gross revenue from advertising and circulation amounted to P3,005,893,647, higher by P22,629,500 or 0.76% over 2011. Total gross revenues and other income reached P3,158,490,490 which was P77,019,830, 2.38% lower. This decrease was accounted for by the P99,649,330 or 39.50% in other income, largely the result of the sale in 2011 of machinery scrap accumulated through the previous years. Cost and expenses totaled P2,883,561,098 lower by P16,316,072 or 0.56% last year. It is 91.30% of gross revenues. Cost of printing and materials used accounted for 61.77% of total expenses, lower than 61.96% in 2011. The appreciation of the peso against the U.S. dollar has favorable effect on our purchases of imported newsprint, ink and machinery spare parts. Our manpower expense was reduced with the retirement of eligible employees as well as cost cutting in our operations, however, employee benefits went up with the renewal of our company collective bargaining agreement giving 5 month signing bonus to employees. Provision for income tax for the year amounted to P59,749,412 lower by
P21,283,430 or 26.27% from the previous year.

Net income of the Corporation amounted to P161,225,415. This represents 5.10% of total revenues for the year. Earnings per share for 2012 and 2011 are P0.0534 and P0.0632 respectively. Percentage of net profit to Stockholders equity was 4.92% for 2012 while 5.84% for 2011. As of December 31, 2012, Current Assets to Current Liabilities ratio were 1.2051:1 as compared to 1.2407:1 for the same period last year.
12

There is no significant element of income or loss that did not arise from the issuers continuing operations. Total assets of the Company went up by P211,290,790 as of December 31, 2012 as compared last year. As of December 31, 2012, the Registrants Total Asset to Equity Ratio was computed at 2.0453:1 while in 2011 of the same period it was computed at 1.9872:1. The net worth of the Corporation as of yearend of 2012 is P3,277,817,591 with paid up capital of P3,030,284,900 and net retained earnings of P263,880,668 less P16,347,977 cost of treasury stock. The Company came up with various ratios, which the Company considers to be key performance indicators and these are as follows: Year End 2012 Current Ratio- Current Assets/ Current Liabilities (Liquidity Ratio- ability to meet short term obligations) Return on Assets- Net Income/ Total Assets (Effectiveness in the use of assets to generate profits) Return on Equity- Net Income/ Stockholders Equity (Measures the profits earned for each peso invested in the companys stocks) Gross Profit Margin- Gross Profit/ Sales (Measures gross profit earned on sales) Debt Ratio- Total assets/ Total Liabilities (Indicator of long term solvency of the Company) Liquidity Ratio This is an indicator of the Companys readiness to meet its obligations. The Companys exposure relates to its debt obligations to banks, suppliers of printing materials and services and to government regulating and taxing authorities. The Companys approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation. The Company focuses on its cash sales transactions, which assists it in monitoring cash flow requirements and optimizing its cash returns on investments, specifically on modern machinery. Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30 days, including the servicing of financial obligation; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the lines of credit with certain local banks. As of December 31, 2012, total current assets amounted to P3,466,317,890 while total current liabilities was computed at P2,876,427,867.
13

2011 1.2407:1

1.2051:1

0.0240

0.0294

0.0492

0.0584

0.4074

0.3977

1.9566:1

2.0129:1

Return on assets Return on Assets is an indicator of effectiveness in the management or use of the Companys Assets to generate profit. For the calendar year 2012, net income registered at P161,225,415 while total assets used to generate such income totaled to P6,704,245,458. Return on Equity Return on Equity measures the profit earned for each peso invested in the Companys stocks. For the year 2012, net income generated was at P161,225,415 while total equity was at P 3,277,817,591. Gross Profit Margin Gross Profit earned amounted to P1,224,685,408. This represents 40.74% of the Companys Gross Revenue of P3,005,893,647. Debt Ratio Total assets of the Registrant amounted to P 6,704,245,458 as against its total liabilities of P3,426,427,867 or 1.9566: 1 Debt Ratio. This is an indication of the long term solvency of the Company. The decrease in Trade and other receivables of 4.01% represents the result of good collection policy of the company regarding its receivables. Trade receivables are non-interest bearing and generally on a 60-day credit term. All provincial circulations are covered by post-dated checks. Inventories went up by 3.77% as compared with that in 2011. Inventories of printing materials such as newsprint, ink and other press supplies were increased in anticipation of higher prices of printing materials due to rising fuel prices. Trust receipts payable account increased by 83.94% this year as compared to last years balance due to the increase in the importation of printing materials such as paper, ink and supplies in line with beefing up inventory balances; this account is usually payable in 180 days. The Company did not enter into any contracts of merger, consolidation of joint venture, contract management, licensing, marketing, distributorship, technical assistance or similar agreements. The Company did not offer rights or grant Stock Options and corresponding plans therefore. The Company does not know of any information, event or happening that may affect the market price of its security. There was no transferring of assets made except in normal course of business. There are no known trends, demands, commitments, events or uncertainties known to management that would have an impact on the Companys liquidity.

14

The Registrant does not know of any event that will trigger direct or contingent financial obligation that is material to the Company, including any default or acceleration of an obligation. There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons created during the reported period. Likewise, The Company does not know of any material commitments for capital expenditures, known trends, events or uncertainties that have had or that are reasonably expected to have a material impact whether favorable or unfavorable impact on net sales/ revenues/ income from continuing operations. And lastly, the Registrant has no knowledge of any seasonal aspects that had a material effect on the financial condition or results of operations.

Prospects for 2013

Philippine prospects this 2013 are high with the anticipated increased business activity. Services sector will continue to fuel the Philippine economy, mainly from the real estate construction, more government infrastructure spending, trade and business activities. Public-private-partnership prospects focus on more agriculture and agri-business development and tourism. Manufacturing and opening of new export markets will generate more jobs available for the unemployed, backing up the stronger economic growth of the country. With these rising business activities, there will be more advertising placements and increase in sales of newspapers and magazines. Hence, it can be seen that the operations of the registrant will be more profitable in 2013. The company plans to open branch offices in Bacolod City and Zamboanga City. Additional branches are intended to be established, one in Eastern Visayas and another in Central Luzon. As we cover more areas in our branch expansion for wider dispersal of our newspapers and magazines, we envision giving more employment to the people and contributing to the progress of the communities in areas within reach. The Company expects to generate its fund from internal sources such as collection of receivables, cash from direct ad placements and circulation of newspapers and magazines and commercial printing. The registrant does not expect funding from external sources.

15

Calendar Year 2011 Compared to Calendar Year 2010

An improvement in the economy in 2011, accounted for the increase in gross revenues of Manila Bulletin which registered a growth of P148,680,768 or 4.82% to P3,235,510,320 over 2010. Operating expenses for the year totaled P2,899,877,171, 4.99% or P137,780,149 more than the previous year. Expenses were 89.63%of gross revenues. Cost of printing and materials used accounted for 61.96% of total expenses, higher than the 61.94% in 2010. Provision for income tax for the year amounted to P81,032,842, higher by P2,605,897 or 3.32% from P78,426,945 the previous year. Net income of the Corporation amounted to P190,904,421. This represented 5.90% of total revenues for the year. Earnings per share for 2011 and 2010 were both at P0.06 with percentage of net profit to Stockholders equity of 5.84% and 5.69% respectively. As of December 31, 2011, Current Assets to Current Liabilities ratio was 1.2407: 1 as compared to 1.2185: 1 for the same period last year. There is no significant element of income or loss that did not arise from the issuers continuing operations. Total assets of the Company went up by P38,371,204 as of December 31, 2011 as compared with that of last year. As of December 31, 2011, the Registrants Total Assets to Equity Ratio was computed at 1.9872: 1 while in 2010 of the same period it was computed at 2.0001:1. The net worth of the Corporation as of yearend of 2011 is P3,267,355,774 with paid up capital of P3,030,284,900 and net retained earnings of P 253,418,851 less P 6,347,977 cost of treasury stock. The Company came up with computations of various ratios, which the Company considers to be key performance indicators and these are as follows: Year End 2011 Current Ratio Current Assets / Current Liabilities 1.2407:1 (Liquidity ratio - ability to meet short term obligations) Return on Assets - Net Income / Total Assets 0.0294 (Effectiveness in the use of assets to generate profits) Return on Equity - Net Income / Stockholders Equity 0.0584 (Measures the profits earned for each peso invested in the companys stocks ) Gross Profit Margin Gross Profit / Sales (Measures gross profit earned on sales) 0.3977 2010 1.2185:1

0.0284

0.0569

0.4187

Debt Ratio Total Assets / Total Liabilities 2.0129:1 (Indicator of the long term solvency of the Company)

1.9999:1

16

Liquidity Ratio This is an indicator of the Companys readiness to meet its obligations. The Companys exposure relates to its debt obligations to banks, suppliers of printing materials and services and to government regulating and taxing authorities. The Companys approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation. The Company focuses on its cash sales transactions, which assists it in monitoring cash flow requirements and optimizing its cash returns on investments, specifically on modern machinery. Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30 days, including the servicing of financial obligation; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the lines of credit with certain local banks. As of December 31, 2011, total current assets amounted to P3,294,895,361 while total current liabilities was computed at P2,655,598,894; current ratio was at 1.2407:1. Return on assets Return on Assets is an indicator of effectiveness in the management or use of the Companys Assets to generate profit. For the calendar year 2011, net income registered at P190,904,421 while total assets used to generate such income totaled to P6,492,954,668. Return on Equity Return on Equity measures the profit earned for each peso invested in the Companys stocks. For the year 2011, net income generated was at P190,904,421 while total equity was at P 3,267,355,774. Gross Profit Margin Gross Profit earned amounted to P1,186,423,489. This represents 39.77% of the Companys Gross Revenue of P2,983,264,147. Debt Ratio Total assets of the Registrant amounted to P 6,492,954,668 as against its total liabilities of P3,225,598,894 or 2.0129: 1 Debt Ratio. This is an indication of the long term solvency of the Company. The increase in Trade and other receivables of 21.10% represents good business towards the 4th quarter of 2011 wherein more advertisements came in as well as increase in sales of our newspapers and magazines especially in the provinces.

17

Inventories went down by 3.05% as compared with that in 2010. The decrease can be attributed to more ad placements and higher circulation copies printed towards the last quarter of the year. Trust receipts payable account decreased by 26.14% this year as compared to last years balance. This account is usually payable in 180 days. The Company did not enter into any contracts of merger, consolidation of joint venture, contract management, licensing, marketing, distributorship, technical assistance or similar agreements. The Company did not offer rights or grant Stock Options and corresponding plans therefore. The Company does not know of any information, event or happening that may affect the market price of its security. There was no transferring of assets made except in normal course of business. There are no known trends, demands, commitments, events or uncertainties known to management that would have an impact on the Companys liquidity. The Registrant does not know of any event that will trigger direct or contingent financial obligation that is material to the Company, including any default or acceleration of an obligation. There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons created during the reported period. Likewise, the Company does not know of any material commitments for capital expenditures, known trends, events or uncertainties that have had or that are reasonably expected to have a material impact whether favorable or unfavorable impact on net sales/ revenues/ income from continuing operations. And lastly, the Registrant has no knowledge of any seasonal aspects that had a material effect on the financial condition or results of operations.

18

Calendar Year 2010 Compared to Calendar Year 2009

With the increase in business activity in 2010, gross revenues of Manila Bulletin registered an increase of P79,970,507 or 2.66% over 2010, a reversal of the decline of 2.58% in 2009 from 2008. Cost and expenses went up by P67,652,438 or 2.51% over last year. Cost and expenses registered at 89.48% of total revenue this year. Cost of printing and materials used accounted for 61.94% of total cost and expenses, slightly lower than the 62.94% in 2009. Provision for income tax for the year amounted to P78,426,945.00, slightly lower by P640,756.00 or 0.81% from the previous year. Net income of the Corporation for the year 2010 amounted to P183,632,452.00. This represented 5.95 % of the total revenue of P3,086,829,552.00. Earnings per share were P.06. Percentage of net profit to stockholders equity for the year 2010 was computed at 5.69%. As of December 31, 2010, Current Assets to Current Liabilities ratio was 1.2185: 1 as compared to 1.3162: 1 the same period last year. There is no significant element of income or loss that did not arise from the issuers continuing operations. Total assets of the Company went up by P210,343,360.00 as of December 31, 2010 as compared with that of last year. Earnings per share for the year 2010 as well as in 2009 were both at P0.06. As of December 31, 2010, the Registrants Total Assets to Equity Ratio was computed at 2.0001: 1 while in 2009 of the same period it was computed at 1.9563:1. The net worth of the Corporation as of yearend of 2010 is P3,227,103,481 with paid in capital of P3,030,284,900 and net retained earnings of P213,166,558 less P16,347,977 cost of treasury stock. The Company came up with computations of various ratios, which the Company considers to be key performance indicators and these are as follows:

Year End 2010 Current Ratio- Current Assets / Current Liabilities (Liquidity ratio - ability to meet short term obligations) Return on Assets - Net Income / Total Assets (Effectiveness in the use of assets to generate profits ) Return on Equity - Net Income / Stockholders Equity (Measures the profits earned for each peso invested in the companys stocks ) 2009

1.2185: 1 0.0284

1.3162:1 0.0281

0.0569

0.0550

19

Year End 2010 Gross Profit Margin Gross Profit / Sales (Measures gross profit earned on sales) Debt Ratio Total Assets / Total Liabilities (Indicator of the long term solvency of the Company) Liquidity Ratio This is an indicator of the Companys readiness to meet its obligations. The Companys exposure relates to its debt obligations to banks, suppliers of printing materials and services and to government regulating and taxing authorities. The Companys approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation. The Company focuses on its cash sales transactions, which assists it in monitoring cash flow requirements and optimizing its cash returns on investments, specifically on modern machinery. Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30 days, including the servicing of financial obligation; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the lines of credit with certain local banks. As of December 31, 2010, total current assets amounted to P3,235,269,139 while total current liabilities was computed at P2,607,479,983; current ratio was at 1.2185:1. Return on assets Return on Assets is an indicator of effectiveness in the management or use of the Companys Assets to generate profit. For the calendar year 2010, net income registered at P183,632,452 while total assets used to generate such income totaled to P6,454,583,464. Return on Equity Return on Equity measures the profit earned for each peso invested in the Companys stocks. For the year 2010, net income generated was at P183,632,452 while total equity was at P3,227,103,481. Gross Profit Margin Gross Profit earned amounted to P1,232,560,397. This represents 41.87% of the Companys Gross Revenue of P2,943,491,239. Debt Ratio Total assets of the Registrant amounted to P6,454,583,464 as against its total liabilities of P3,227,479,983 or 1.9999: 1 Debt Ratio. This is an indication of the long term solvency of the Company. 0.4187 2009 0.4152

1.9999: 1

2.0457: 1

20

The increase in Trade and other receivables of 6.58% represents good business towards the 4th quarter of 2010 wherein more advertisements came in as well as increase in sales of our newspapers and magazines especially in the provinces. Inventories went up by 9.15% as compared with that in 2009. Inventories of printing materials such as newsprint, ink and other press supplies were increased in anticipation of higher prices of printing materials due to rising fuel prices. Trust receipts payable account doubled this year as compared to last years balance due to the increase in the importation of printing materials such as paper, ink and supplies in line with beefing up inventory balances; this account is usually payable in 180 days. The Company did not enter into any contracts of merger, consolidation of joint venture, contract management, licensing, marketing, distributorship, technical assistance or similar agreements. The Company did not offer rights or grant Stock Options and corresponding plans therefore. The Company does not know of any information, event or happening that may affect the market price of its security. There was no transferring of assets made except in normal course of business. There are no known trends, demands, commitments, events or uncertainties known to management that would have an impact on the Companys liquidity. The Registrant does not know of any event that will trigger direct or contingent financial obligation that is material to the Company, including any default or acceleration of an obligation. There are no material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons created during the reported period. Likewise, The Company does not know of any material commitments for capital expenditures, known trends, events or uncertainties that have had or that are reasonably expected to have a material impact whether favorable or unfavorable impact on net sales/ revenues/ income from continuing operations. And lastly, the Registrant has no knowledge of any seasonal aspects that had a material effect on the financial condition or results of operations.

21

b. The Corporation does not anticipate having any cash flow or liquidity problem within the next 12 months. c. All trade payables have been paid within stated terms. d. The Corporations sources of liquidity are revenues derived from sale of newspapers, magazines, advertisements, commercial printing and collection of receivables. e. The Registrant does not know of any event that will trigger direct or contingent financial obligation that is material to the Company. f. There are no material off balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons created during the reporting period. g. Audit and Audit Related Fees

In compliance with SRC Rule 68 paragraph 3 B (4) on Rotation of External Auditors, Mercado, Calderon, Jaravata & Co., an accounting firm duly accredited by the Securities and Exchange Commission has been nominated by the Audit Committee to the Board of Directors to be the Registrants external auditors for the year 2012. The partner in charge of Mercado, Calderon, Jaravata & Co., is Mr. Marcelino A. Mercado, a senior partner signing for the firm. The Company has no disagreements with the said firm or auditor with regards to accounting and financial disclosures for the year 2012. Audit fee of our external auditor for the year 2012 amounted to P458,905.92. The said fee covered audit work, preparation of year - end audited financial statements and Income Tax Return for the period ended, December 31, 2012. The election of the external auditor is taken up during the annual stockholders meeting. The audit committee selects and deliberates on the prospective audit firm that they will nominate. Once a consensus is reached, a representative of the audit committee nominates the said firm during the annual stockholders meeting of the Registrant. G. FINANCIAL STATEMENTS Financial Statements and notes to the Financial Statements are incorporated in the auditors report herein attached. Likewise, attached are supplementary schedules as required by SRC Rule 68.

22

H. DIRECTORS and EXECUTIVE OFFICERS Directors and Executive Officers The following are the incumbent directors and executive officers of the Registrant:
YEARS OF SERVICE More than 5 years

NAME / POSITION

AGE

TERM OF OFFICE

CITIZENSHIP

Dr. Emilio T. Yap Chairman of the Board Atty. Hermogenes P. Pobre Director/President Vice Chairman Chief Justice Hilario G. Davide, Jr. Vice Chairman/ Independent Director Secretary Alberto G. Romulo Vice Chairman/ Independent Director Dr. Emilio C. Yap III Director/ Executive Vice President Atty. Miguel B. Varela Director Mrs. Paciencia M. Pineda Director/ Executive Vice President Dr. Esperanza I. Cabral Independent Director

87

1984 to present

FILIPINO

5 years

82

2007 to present

FILIPINO

Less than 5 years

77

2011 to present

FILIPINO

Less than 5 years More than 5 years More than 5 years More than 5 years Less than 5 years Less than 5 yrs (as Director) More than 5 yrs (as Editor In Chief)

79 41

2011 to present

FILIPINO

2002 to present

FILIPINO

72

2006 to present

FILIPINO

87

1988 to present

FILIPINO

69

2010 to present July 9, 2009 to present(as Director) November 25, 2003 to Jan 30,2010/ June 1, 2010 to present (as Editor In Chief) Elected Director effective March 21, 2013.

FILIPINO

Dr. Crispulo J. Icban, Jr. Director / Editor In Chief

FILIPINO

77

Dr. Enrique Y. Yap, Jr. Director Mrs. Aurora Capellan- Tan Asst. Corporate Secretary/ Vice President- Executive Office

Less than 5 years

38

FILIPINO

More than 5 years

57

1984 to present

FILIPINO

Mrs. Purificacion M. Cipriano Asst. Corporate Secretary

More than 5 years

77 23

1984 to present

FILIPINO

NAME / POSITION

YEARS OF SERVICE

AGE

TERM OF OFFICE

CITIZENSHIP

Atty. Dylan I. Felicidario Corporate Secretary/ Compliance Officer/ Legal Officer Gen. Hermogenes C. Esperon, Jr. (Ret.) Executive Vice PresidentSecurity Department Atty. Fe B. Barin Executive Vice President/ Compliance Officer Mrs. Carmen S. Suva Vice President- Public Relations Dept. Gen. Proceso D. Almando Vice President- Administration

More than 5 years

41

2002 to present

FILIPINO

Less than 5 years

61

2011 to present

FILIPINO

Less than 5 years More than 5 years More than 5 years

79

2012 to present

FILIPINO

72

2006 to present

FILIPINO

79

1992 to present

FILIPINO

Mrs. Lynne A. Abanilla Vice President- Classified Ads

More than 5 years

58

1973 to present

FILIPINO

Mr. Melito S. Salazar Vice President- Advertising/ Asst. Compliance Officer

More than 5 years

63

2006 to present

FILIPINO

Mrs. Elizabeth T. Morales Asst. Vice President Finance/ Asst. Compliance Officer Mr. Johnny L. Lugay Asst. Vice President- Information & Communications Technology Mr. Jesus H. Mallare Asst. Vice PresidentCirculation Dept. Mr. Alvin P. Mendigoria Asst. Vice President- Engineering Dept. Mr. Geronimo S. Montalban Asst. Vice President- Classified Ads Mrs. Katherene S. Chua Asst. Vice PresidentDisplay Ads Mr. Martin V. Isidro, Jr. Asst. Vice President Production Distribution

More than 5 years

51

1988 to present

FILIPINO

More than 5 years

45

1990 to present

FILIPINO

More than 5 years

57

1984 to present

FILIPINO

More than 5 years More than 5 years

46

1993 to present

FILIPINO

54

1987 to present

FILIPINO

Less than 5 years

36

2010 to present

FILIPINO

Less than 5 years

49 24

2010 to present

FILIPINO

Mr. Ramon C. Ting Asst. Vice President Metro Manila Branches Mr. Dante M. Simangan Asst. Vice President- Provincial Branches Dept.

More than 5 years

59

1978 to present

FILIPINO

More than 5 years

53

2005 to present

FILIPINO

25

EMILIO T. YAP Dr. Emilio T. Yap, Filipino, 87, is the Chairman of the Board of Manila Bulletin Publishing Corporation. Likewise, he holds the same position in the following companies: Philippine President Lines Inc., U.S. Automotive Co., Inc., USAUTOCO, Inc., Philtrust Realty Corporation, Manila Prince Hotel Corporation, Manila Hotel Corporation, Philtrust Bank and Centro Escolar University. HERMOGENES P. POBRE Atty. Hermogenes P. Pobre, Filipino, 82, is the Vice Chairman and President of Manila Bulletin Publishing Corporation. He joined the Company on February 1, 2007 as Publisher and on July 9, 2009 was elected Vice Chairman and President of Manila Bulletin. He is a Certified Public Accountant and a lawyer. Atty. Pobre served as Assistant Secretary of the Department of Justice, Chairman of the Board of Accountancy and Chairman of the Professional Regulation Commission. He had received several commendation and recognition awards including Presidential Commendation Award for his exemplary service as Chairman of the Professional Regulation Commission, Hall of Fame awardee of the Philippine Institute of Certified Public Accountants and the Government Association of Certified Public Accountants. He was a multi- awarded leader and public servant and was named Ulirang Ama in Government Service in 1999. He authored Government accounting a Self - Instructional Approach and Vision and Mission for Professional Excellence, a collection of writings on the reforms in professional regulation, education and governance. HILARIO G. DAVIDE, JR. Former Supreme Court Chief Justice Hilario G. Davide, Jr., Filipino, 77, was elected as Vice Chairman and Independent Director of Manila Bulletin Publishing Corporation on March 31, 2011. He was the 20th Supreme Court Chief Justice of the Philippines and Head of the Judicial Branch of the government from November, 1988 to December, 2005 and former Philippine Permanent Representative to the United Nations in New York from February 2007 to March 2010. Former Chief Justice Davide is concurrently Chairman of the Board of Trustees of the Knights of Columbus, Fraternal Association of the Philippines and a member of the Council of Elders of the Knights of Rizal. ALBERTO G. ROMULO Former Secretary Alberto G. Romulo, Filipino, 79, was elected as Vice Chairman and Independent Director of Manila Bulletin Publishing Corporation on July 14, 2011. He was the Minister of Budget of President Corazon Aquino, elected Senator from 1987 to 1998, during which time he served as Majority Leader for 5 years. Likewise, he became Finance Secretary in 2001 and was later appointed by President Gloria Macapagal- Arroyo as Executive Secretary and in 2004 as Foreign Affairs Secretary until 2011 under President Benigno C. Aquino III. He served as Chairman of the Association of Southeast Asian Nations or ASEAN in 2007. EMILIO C. YAP III Dr. Emilio C. Yap III, Filipino, 41, is a director and Executive Vice President of Manila Bulletin Publishing Corporation. He is also a director of Philtrust Bank, Manila Hotel and Centro Escolar University. He graduated from De La Salle University in 1994 with a degree of Bachelor of Science in Accountancy. He was conferred with the Degree of Doctor of Philosophy in Journalism, Honoris Causa by Angeles University Foundation (AUF) on May 1, 2009.

26

MIGUEL B. VARELA Atty. Miguel B. Varela, Filipino, 72, is a director of Manila Bulletin Publishing Corporation. He was formerly the Vice Chairman and President of the Company. He studied at the Ateneo de Manila College of Law for his degree of Bachelor of Laws, and his Associate in Liberate Arts from San Beda College. Atty. Varela is a member of the Philippine Bar. At present, he is holding the positions of President, Philippine Chamber of Commerce and Industry (PCCI); Chairman, Employers Confederation of the Philippines (ECOP); Trustee, Philippines Inc.; President, Philippine Association of Voluntary Arbitration Foundation, Inc. (PAVAF). He is an accredited International Arbitrator of the Paris- based International Court of Arbitration; Vice Chairman, Philippine Dispute Resolution Center, Inc. (PDRCI); Lifetime Member, Philippine Constitution Association (PHILCONSA), among other positions he holds here and abroad. PACIENCIA M. PINEDA Mrs. Paciencia M. Pineda, Filipino, 87, is the Executive Vice President, Treasurer and director of Manila Bulletin Publishing Corporation. She graduated from University of the Philippines with a degree of Bachelor of Science in Business Administration, major in Accounting and is a CPA. She has been a banker for over 37 years and occupied the position of Senior Vice President before her transfer to Manila Bulletin Publishing Corporation in 1988. At the bank, she was granted a special fellowship to observe operations in the correspondent banks in the United States and Europe. She has held positions of director, Treasurer and Chairperson of the Board of the Advertising Board of the Philippines for over 10 years and President of Print Media Organization (PRIMO) and United Print Media Group (UPMG) for 14 years. At present, she is Chairman Emeritus of United Print Media Group (UPMG) and member of the Board of Trustees of the Advertising Foundation of the Philippines. ESPERANZA I. CABRAL Dr. Esperanza I. Cabral, Filipino, 69, was elected as an independent director of Manila Bulletin Publishing Corporation on July 8, 2010. She is a cardiologist and clinical pharmacologist. She served both as a Director of the Philippine Heart Center and Chief of Cardiology of Asian Hospital and Medical Center. She was the Secretary of the Department of Health from January to June 30, 2010. Before her appointment as Secretary of Health, she was the Secretary of the Department of Social Welfare and Development. CRISPULO J. ICBAN JR. Dr. Crispulo J. Icban Jr., Filipino, 77, is a director and at present, the Editor- In Chief of Manila Bulletin Publishing Corporation. He served as the Press Secretary of President Gloria Macapagal Arroyo from January 21, 2010 to May 31, 2010. Prior to his appointment as Press Secretary, Dr. Icban was then the Editor in Chief of Manila Bulletin. He graduated from the University of the Philippines with a Bachelor of Arts in English, magna cum laude and masters degree in journalism, under Fulbright and Smith Mundt Grant, at Syracuse University in New York. He was one of 12 American and 6 international newsmen in the annual Nieman Fellowship program at Harvard University in Massachusetts. Dr. Icban has received numerous awards in over half a century of service as journalist. He was named Outstanding Kapampangan by the Pampanga Provincial Government, 1988; and Distinguished Tarlaquenos by the Tarlac Provincial Government, 2003. He was conferred a Doctor of Philosophy degree in Management, honoris causa, by the Pampanga Agricultural College on April 12, 2006.
27

ENRIQUE Y. YAP JR. Dr. Enrique Y. Yap, Jr., Filipino, 38, is a director elected effective March 21, 2013. He serves as the Executive Vice President and Director of the Board of the Philippines flagship hotel, Manila Hotel. He has recently received the prestigious recognition of being one of the Ten Outstanding Manilans conferred by the Hon. Alfredo S. Lim (Mayor of the City of Manila) and is likewise a member of the esteemed socio-economic organization, Rotary Club of Manila. He holds a Doctorate degree in Business Administration (Honoris Causa) from the Polytechnic University of the Philippines, and he studied at Cornell- Nanyang Technological University in Singapore and De La Salle University in Manila. AURORA CAPELLAN TAN Mrs. Aurora Capellan Tan, Filipino, 57, is the Assistant Corporate Secretary, Vice President and Assistant Treasurer of Manila Bulletin Publishing Corporation. She studied at the University Of Santo Tomas College Of Law for her degree of Bachelor of Laws, and Bachelor of Science in Psychology. PURIFICACION M. CIPRIANO Mrs. Purificacion M. Cipriano, Filipino, 77, is one of the Assistant Corporate Secretaries of the Company for more than five years. She is a Certified Public Accountant. DYLAN I. FELICIDARIO Atty. Dylan I. Felicidario, Filipino, 41, is a Lawyer-CPA by profession. He is the Corporate Secretary, Compliance Officer and Legal Counsel of the Manila Bulletin Publishing Corporation. He earned his Bachelors Degree in Law at the Saint Louis University in Baguio City where he graduated Cum Laude in March 1997. He obtained his Bachelors Degree in Commerce - Major in Accounting at Laguna College, San Pablo City, where he graduated Magna Cum Laude in March, 1992. Before joining Manila Bulletin, he served as a Lawyer of Philippine Trust Company (Philtrust Bank) from 2000 to 2002; as an Associate Lawyer of Cases & Associates Law Offices from 1998 to 1999; and as a college instructor of Business Law and Taxation at Laguna College, San Pablo City from 1997 to 1998. FE B. BARIN Atty. Fe B. Barin, Filipino, 79, is the Executive Vice President/ Compliance Officer of the Company. She served as the Chairperson of the Securities and Exchange Commission and as a member of the Anti- Money Laundering Council from Sept. 1, 2004 to May 4, 2011. She was an ex-officio Chairperson of the Central Credit Information Corporation from 2009 to May, 2011. Prior to her appointment to the SEC she served a member of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) from October 1, 2002 to August 31, 2004. She also served as the first Chairperson of the Energy Regulatory Commission in August, 2001 until September, 2002. She holds a Bachelor of Laws degree from the University of the Philippines, a member of the Philippine Bar and the Integrated Bar of the Philippines, Women Lawyers Circle (WILOCI) and the Women Lawyers Association of the Philippines (WLAP). Presently, she is a member of the Board of Trustees and the Institute of Corporate Directors.

28

HERMOGENES C.ESPERON, JR. General Hermogenes C. Esperon Jr., Filipino, 60, a retired general and a former Chief of Staff of the Armed Forces of the Philippines is the Executive Vice President- Security Department of the Registrant. He graduated from the Philippine Military Academy in 1974. After retiring from AFP and before joining Manila Bulletin, he was appointed by former President Gloria Macapagal Arroyo as the Presidential Adviser on Peace Process and later on as Cabinet Secretary, Presidential Management Staff (PMS). PROCESO D. ALMANDO Former Police Brigadier General Proceso D. Almando, Filipino, 79, is currently the Vice President for Administration of Manila Bulletin Publishing Corporation. He served as the District Director of the Western Police District (WPD), Philippine National Police (PNP). CARMEN S. SUVA Mrs. Carmen S. Suva, Filipino, 72, is the Vice President- Public Relations of Manila Bulletin Publishing Corporation. She served as a career person in government service (Malacaang) from 1962 to 2004 under six Presidents and under 20 Press Secretaries. She retired as Undersecretary for Media Relations, Office of the Press Secretary, Malacaang, in 2004. She received a Loyalty Award from the Civil Service Commission in 1973, Outstanding Employee of the Department of Public Information in 1980 and Outstanding Woman employee of the Office of the Press Secretary, Malacaang in 1989. She is the granddaughter of Epifanio delos Santos, a Filipino patriot, scholar and historian for whom the 54 kilometer avenue popularly referred to as EDSA was named. MELITO S. SALAZAR JR. Mr. Melito S. Salazar Jr., Filipino, 63, is the Vice President for Advertising of Manila Bulletin Publishing Corporation. He served as Associate Professor of the College of Business Administration, Director of the Institute of Small- Scale Industries and the Resource Generation Staff of the University of the Philippines, Undersecretary of Trade and Industry for Investments of the Department of Trade and Industry; Managing Head and Vice Chairman of Board of Investments and Member of the Monetary Board of the Bangko Sentral ng Pilipinas. In the private sector, Mr. Salazar is the President of the Chamber of Commerce of the Philippines Foundation, Inc.; Chairman of the Financial Executives Institute of the Philippines ( FINEX ) Foundation and Adjutant- General of Vanguard, Inc. He was previously President of FINEX, the UPMBA Society, Inc. and the Small Enterprises Research and Development Foundation Inc.( SERDEF ). He is a Past District Governor of Rotary International District 3780, Quezon City. He graduated with a BSBA and MBA degrees from the University of the Philippines and attended executive training programs in the Massachusetts Institute of Technology Sloan School of Management, the Harvard Business School, the New York Institute of Finance, and the Studienzentrum Gerzensee in Switzerland. He is the first Filipino to receive the Special Honor Award from the World Association of Small and Medium Enterprises ( WASME ).

29

LYNE A. ABANILLA Mrs. Lyne A. Abanilla, Filipino, 58, is the Vice President for Classified Ads of Manila Bulletin Publishing Corporation for more than 5 years. She has been with the Company for 37 years. She was awarded Most Outstanding Rotary Club President by Rotary International District 3810 for the year 1999 to 2000. She was the President of Rotary Club of Intramuros Manila from 1999-2000 and President of Rotary Club of Intramuros Foundation from 2002 2003. She became Rotary District Governor in 2006 2007 and is now Rotarys South Pacific Area Coordinator on Public Image. ELIZABETH T. MORALES Mrs. Elizabeth T. Morales, Filipino, 51, is the Assistant Vice President - Finance / Chief Accountant and Assistant Compliance Officer of the Company. Before her appointment as Assistant Vice President, she served as the Assistant Treasurer of the Registrant. Prior to joining Manila Bulletin Publishing Corporation, she worked with Carlos J. Valdes & Co., as an auditor and with Abenson, Inc., as an Accounting Manager. She graduated with a degree of Bachelor of Science in Commerce major in Accounting from Far Eastern University in 1979 and took her MBA units at Ateneo Graduate School of Business in 1989. She passed the CPA board exam in 1980. JOHHNY L. LUGAY Mr. Johnny L. Lugay, Filipino, 45, is the Assistant Vice President- Information and Communications Technology Department of the Company. He graduated from the University of Santo Tomas with a degree of Bachelor of Science in Mathematics major in Computer Science in 1990. JESUS H. MALLARE Mr. Jesus H. Mallare, Filipino, 57, is the Assistant Vice President - Circulation Department of the Registrant. He graduated with a degree of Bachelor of Science in Commerce major in Marketing from the University of Santo Tomas in 1976 and took MBA units at Ateneo Graduate School of Business in 1988. He was the President of the Circulation Management Association of the Philippines (CMAP) from 2003 to 2007. ALVIN P. MENDIGORIA Mr. Alvin P. Mendigoria, Filipino, 46, is the Assistant Vice President - Engineering Department of the Registrant. He graduated with a degree of Bachelor of Science In Mechanical Engineering from Adamson University. He passed the Mechanical Board Exam in 1989 and joined the Company in 1993. GERONIMO S. MONTALBAN Mr. Geronimo S. Montalban, Filipino, 54, is the Assistant Vice President Classified Advertising of Manila Bulletin. He graduated with a degree of Bachelor of Arts in Management from the University of the East. He joined the Company in 1987. KATHERENE S. CHUA Mrs. Katherene S. Chua, Filipino, 36, is the Assistant Vice President Display Advertising of Manila Bulletin. She joined the Company on July 1, 2010. She graduated from the University of Sto. Tomas, College of Fine Arts, major in Advertising.

30

MARTIN V. ISIDRO, JR Mr. Martin V. Isidro, Jr., Filipino, 49, is the Assistant Vice President-Production Distribution of the Registrant. He graduated from Letran College with a degree of Bachelor of Science in Commerce in 1985. RAMON C. TING Mr. Ramon C. Ting, Filipino, 59, is the Assistant Vice President Metro Manila Branches of the Company. He joined the Company in 1978. He graduated with a degree of Bachelor of Science in Commerce, major in Management from the Far Eastern University in 1976. DANTE M. SIMANGAN Mr. Dante M. Simangan, Filipino, 53, is the Assistant Vice President- Provincial Branches of Manila Bulletin. He joined the Company in 2005. He graduated with a degree of AB Political Science from Mindanao State University in 1980.

31

2. Significant Employee There is no person who is not an executive officer who is expected to make a significant contribution to the business of the Corporation. 3. Family Relationship Dr. Emilio T. Yap, the Chairman of the Board is the grandfather of Dr. Emilio C. Yap III, Director and Executive Vice President of the Registrant and Dr. Enrique Y. Yap Jr., who was elected Director during the regular meeting of the Board of Directors of the Registrant on March 21, 2013. 4. Involvement in Certain Legal Proceedings The Registrant has no knowledge of any material pending legal proceedings to which any of the directors and executive officers of the Registrant is a party or of which any of their property is the subject. Likewise, the Company has no knowledge of any pending legal proceedings against any nominee or director or executive officer such as follows: a. There is no bankruptcy petition filed by or against any business of which any of our directors or executive officer is subject. b. None of our directors or executive officers is convicted by final judgment in a criminal proceeding. c. None of our directors or executives is a subject of judgment or decree permanently or temporarily limiting or suspending their involvement in any type of business, securities, and commodities or banking activities. d. None of our directors or executive officers has been found to have violated a securities or commodities law or regulation and the judgment has not been reversed, suspended or vacated. II. EXECUTIVE COMPENSATION
OTHER ANNUAL COMPENSATIO/ DIRECTORS FEE

NAME/ PRINCIPAL POSITION Atty. Hermogenes P. Pobre President/ Vice Chairman of the Board Dr. Emilio C. Yap III Executive Vice President - Advertising Department/ Director Mrs. Paciencia M. Pineda Executive Vice President- Advertising Department/ Treasurer/ Director Gen. Hermogenes C. Esperon, Jr.( Ret) Executive Vice President- Security Dept.

YEAR

SALARY

BONUS

32

NAME/ PRINCIPAL POSITION YEAR Mrs. Aurora Capellan Tan Vice President- Executive Office/ Asst. Treasurer/ Asst. Corporate Secretary Gen Proceso D. Almando ( Ret) Vice President- Administration Department Mrs. Carmen S. Suva Vice President- Public Relations Mr. Melito S. Salazar Vice President- Advertising Dept. Mrs. Lynne A. Abanilla Vice President- Classified Advertising Mrs. Elizabeth T. Morales Asst. Vice President- Finance/ Asst. Compliance Officer Mr. Johnny L. Lugay Asst. Vice President- Information & Communications Technology Mr. Jesus H. Mallare Asst. Vice President- Circulation Department Mr. Alvin P. Mendigoria Asst. Vice President - Engineering Department Mr. Geronimo S. Montalban Asst. Vice President - Classified Advertising Mrs. Katherene S. Chua Asst. Vice PresidentDisplay Advertising Mr. Martin V. Isidro, Jr. Asst. Vice PresidentProduction Distribution Mr. Ramon C. Ting Asst. Vice PresidentMetro Manila Branches SALARY BONUS

OTHER ANNUAL COMPENSATION/ DIRECTORS FEE

33

NAME/ PRINCIPAL POSITION Mr. Dante M. Simangan Asst. Vice Pres- Provincial Branches All above named directors & officers as a group

YEAR

SALARY

BONUS

OTHER ANNUAL COMPENSATION/ DIRECTORS FEE

2013*** 2012 2011 2013*** 2012 2011

13,389,002 11,384,907 11,162,177 41,697,781 44,026,612 38,126,324

10,108,598 10,487,279 9,604,991 31,021,248 37,069,100 30,941,063

3,800,000 3,199,967 4,184,058 1,500,000 1,140,578 744,387

All other officers & directors as a group unnamed

*** Estimated Compensation Compensation of the directors stipulated in the By Laws of The Corporation: 3% of the yearly net profits before payment of income tax are distributed among them in proportion to the number of regular / special meetings of the Board actually attended by each. The Company maintains Retirement plan for our employees. Retirement computations are the same both for executives and rank and file employees. There are no outstanding warrants or options held by the Registrants CEO, the named executive officers, and all officers and directors as a group. The Company has neither voting trust agreements nor material contracts involving the same or any of its directors, executive officers or stockholders owning ten percent(10 %) or more of total outstanding shares and members of their immediate family had or is to have a direct or indirect material interest. J. SECURITY OWNERSHIP OF MANAGEMENT The security ownership of management as of December 31, 2012 are as follows:
AMOUNT & NATURE OF BENEFICIAL OWNERSHIP 22,348,477.00(B)

TITLE OF CLASS Common

Common

Common

Common

Common Common

Common Common

NAME OF BENEFICIAL OWNER/ POSITION Emilio T. Yap Chairman of the Board Hermogenes P. Pobre President/ Vice Chairman of the Board Hilario G. Davide, Jr. Vice Chairman/ Independent Director Alberto G. Romulo Vice Chairman/ Independent Director Emilio C. Yap III Director/ Executive Vice President Miguel B. Varela Director Paciencia M. Pineda Director/ Executive Vice President/ Treasurer Esperanza I. Cabral Independent Director

CITIZEN SHIP Filipino

%TAGE 0.74%

10,500.00(B)

Filipino

<0.01%

10,000.00(B)

Filipino

<0.01%

10,000.00(B)

Filipino

<0.01%

79,224.00(B) 4,319.00(B)

Filipino Filipino

<0.01% <0.01%

181,865.97(B) 10,000.00(B) 34

Filipino Filipino

<0.01% <0.01%

TITLE OF CLASS Common

Common Common

Common

Common

Common

NAME OF BENEFICIAL OWNER/ POSITION Crispulo J. Icban, Jr Director/ Editor- In Chief Fe B. Barin Executive Vice Presiddent/ Compliance Officer Hermogenes C.Esperon,Jr. Executive Vice PresidentSecurity Dept. Aurora Capellan- Tan Vice President- Executive Office/ Asst. Corporate Secretary/ Asst. Treasurer Purificacion M. Cipriano Asst. Corporate Secretary Melito S. Salazar Vice President- Advertising Department/ Asst. Compliance Officer Lyne A. Abanilla Vice President- Classified Advertising Carmen S. Suva Vice President- Public Relations Proceso D. Almando Vice PresidentAdministration Department Dylan I. Felicidario Corporate Secretary/ Compliance Officer Elizabeth T. Morales Asst. Vice PresidentFinance/ Chief Accountant/ Asst. Compliance Officer Jesus H. Mallare Asst. Vice PresidentCirculation Department Geronimo S. Montalban Asst. Vice PresidentClassified Advertising Johnny L. Lugay Asst. Vice President- ICT Alvin P. Mendigoria Asst. Vice PresidentEngineering Dept. Martin V. Isidro,Jr. Asst. Vice PresidentProduct Distribution Dante M. Simangan Asst. Vice PresidentProvincial Branches Katherine S. Chua Asst. Vice PresidentDisplay Ads Ramon C. Ting Assistant Vice PresidentMetro Manila Branches

AMOUNT & NATURE OF BENEFICIAL OWNERSHIP 63,378.00(B) 0.00

CITIZEN SHIP Filipino Filipino

%TAGE <0.01% 0.00%

0.00

Filipino

0.00%

158,442.00(B) 237,655.00(B)

Filipino Filipino

<0.01% <0.01%

0.00

Filipino

0.00%

0.00

Filipino

0.00%

10,500.00(B)

Filipino

<0.01%

0.00

Filipino

0.00%

0.00

Filipino

0.00%

0.00

Filipino

0.00%

3,652.00(B)

Filipino

<0.01%

0.00 0.00

Filipino Filipino

0.00% 0.00%

0.00

Filipino

0.00%

87,141.00(B)

Filipino

<0.01%

0.00

Filipino

0.00%

0.00

Filipino

0.00%

0.00

Filipino

0.00

35

No change of control in the Corporation has occurred since January 1, 2012. K. EXHIBITS AND SCHEDULES 1. Ratification and confirmation by stockholders at the annual meeting on July 12, 2012 as follows: a. Cash dividend equivalent to 5.00% or five centavos (P0.05) per share payable to stockholders of record as of August 8, 2012. b. Election and appointment of the Company Board of Directors of the ten (10) Member Board of Directors as follows: Dr. Emilio T. Yap Atty. Hermogenes P. Pobre Dr. Emilio C. Yap III Dr. Enrique C. Yap Mrs. Paciencia M. Pineda Dr. Crispulo J. Icban Jr. Atty. Miguel B. Varela Secretary Alberto G. Romulo (Ret.)- Independent Director Chief Justice Hilario G. Davide, Jr. (Ret.)- Independent Director Dr. Esperanza I. Cabral- Independent Director 2. Election and appointment of the Company Board of Directors and officers during the Board Meeting on July12, 2012 and July 26, 2012. - Chairman of the Board - Vice Chairman / President / Publisher Chief Justice Hilario G. Davide, Jr. (SC Ret.) - Vice Chairman/ Independent Director Secretary Alberto G. Romulo (DFA Ret.) - Vice Chairman/ Independent Director Dr. Esperanza I. Cabral - Independent Director Dr. Enrique C. Yap - Director Atty. Miguel B. Varela -Director Dr. Crispulo J. Icban Jr. -Director Dr. Emilio C. Yap III - Director/ Executive Vice President- Advertising Dept. Paciencia M. Pineda - Director/ Executive Vice President- Advertising Dept./ Treasurer Atty. Fe B. Barin - Executive Vice President / Compliance Officer Gen. Hermogenes C. Esperon, Jr. (AFP Ret.) - Executive Vice PresidentSecurity Dept. Gen. Proceso D. Almando ( PNP Ret.) - Vice President Administration Purificacion M. Cipriano - Assistant Corporate Secretary Aurora Capellan Tan - Vice President Executive Dept. / Asst. Treasurer Assistant Corporate Secretary Lyne A. Abanilla - Vice President-Classified Advertising Department
36

Dr. Emilio T. Yap Atty. Hermogenes P. Pobre

Melito S. Salazar Jr. Carmen S. Suva Atty. Dylan I. Felicidario Jesus H. Mallare Elizabeth T. Morales Johnny L. Lugay

Alvin P. Mendigoria Geronimo S. Montalban Martin V. Isidro, Jr. Katherene S. Chua Ramon C. Ting

- Vice President Advertising/ Asst. Compliance Officer - Vice President Public Relations - Corporate Secretary/ Compliance Officer - Assistant Vice President Circulation Dept. - Assistant Vice President- Finance/ Assistant Compliance Officer - Assistant Vice PresidentInformation and Communication Technology - Assistant Vice PresidentEngineering Department - Asst. Vice President- Classified Advertising Dept. - Asst. Vice President- Production Distribution - Asst. Vice President- Display Advertising - Asst. Vice President- Metro Manila Branches

3. The 2011 Annual Report to Security Holders were given to the stockholders before the annual stockholders meeting on July 12, 2012, including SEC Form 17-IS (Definitive Information Statement). L. COMPLIANCE WITH THE MANUAL OF CORPORATE GOVERNANCE Compliance by the Company with its Manual of Corporate Governance for the year 2012 was monitored, with all of the Companys directors, officers and employees substantially complying with the leading practices and principles on good corporate governance as embodied in the manual. The Company has also complied with the appropriate performance self rating assessment and performance evaluation system to determine and measure compliance. There was no deviation made by any of the Companys directors, officers and employees from the Companys Manual of Corporate Governance. The Companys Board of Directors, executive officers and staff reaffirm their commitment to the principles and practices of good corporate governance especially on the following areas: a. guidelines on directorship particularly on independent directors and the role of the Boards Nominations Committee in the selection of nominees to the Board of Directors and other positions in the Company. b. the oversight financial management function of the Audit Committee as part of the Companys internal audit activities and c. overall management, organizational and procedural controls to assure compliance and enable the Company efficiently and effectively assess the same. Likewise, the Company adopted the revised disclosure rules of the Philippine Stock Exchange prohibiting the communication of material non public information without simultaneously disclosing the same information to the Stock Exchange.
37

MANILA BULLETIN PUBLISHING CORPORATION

AUDITED FINANCIAL STATEMENTS December 31, 2012 and 2011 with Report of Independent Auditors

MANILA BULLETIN PUBLISHING CORPORATION

STATEMENTS OF FINANCIAL POSITION

December 31
Notes

2012

2011

ASSETS Current Cash Trade and other receivables Inventories Other current assets Noncurrent Available-for-sale investments Property, plant and equipment Investment property Deferred tax asset - net Prepaid benefit obligation Goodwill Other noncurrent assets
4,25,26 5,25,26 6 7,25,26

71,192,632 1,835,231,527 1,241,434,508 318,459,223 3,466,317,890 5,867,604 2,866,268,196 94,808,970 13,601,082 74,894,667 5,000,000 177,487,049 3,237,927,568

33,654,965 1,911,854,106 1,196,311,960 153,074,330 3,294,895,361 5,764,040 2,869,452,880 94,808,970 6,427,942 71,562,128 5,000,000 145,043,347 3,198,059,307

8,25,26 9 10 21 22 11 12

P LIABILITIES AND EQUITY LIABILITIES Current Trade and other payables Trust receipts payable Current portion of loans payable Income tax payable Noncurrent Loans payable net of current portion Equity Paid-up capital Retained earnings Unrealized gain on available-for-sale investments Treasury shares
13,25,26 14,25,25 15,25,26 2

6,704,245,458

6,492,954,668

2,358,303,915 389,727,984 110,000,000 18,395,968 2,876,427,867 550,000,000 3,030,284,900 258,489,132 5,391,536 (16,347,977) 3,277,817,591

2,234,704,397 211,873,635 180,000,000 29,020,862 2,655,598,894 570,000,000 3,030,284,900 248,311,729 5,107,122 (16,347,977) 3,267,355,774

15,25

16 16 8 16

P
See accompanying notes to financial statements.

6,704,245,458

6,492,954,668

MANILA BULLETIN PUBLISHING CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

Notes

2012 P 3,005,893,647 1,781,208,239 1,224,685,408

Years Ended December 31 2011 P 2,983,264,147 1,796,840,658 1,186,423,489 1,103,036,512 83,386,977 248,574,017 1,563,571 1,726,402 382,183 160,997 8,700 (63,865,584) 188,550,286 271,937,263 81,032,842 190,904,421 395,884 P 191,300,305 P

2010

REVENUES COST OF SALES AND SERVICES GROSS PROFIT OPERATING EXPENSES OPERATING INCOME OTHER INCOME (CHARGES) Other operating income Rental income Royalty income Foreign exchange gain Interest income Dividend income Interest expense INCOME BEFORE INCOME TAX PROVISION FOR INCOME TAX NET INCOME OTHER COMPREHENSIVE INCOME Unrealized gain on AFS investments TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic/Diluted
See accompanying notes to financial statements.

17 18

P 2,943,491,239 1,710,930,842 1,232,560,397 1,051,166,181 181,394,216 102,993,597 466,259 38,323,254 1,555,204 226,924 17,950 (62,918,007) 80,665,181 262,059,397 78,426,945 183,632,452 505,329 184,137,781

19

1,102,352,859 122,332,549

20 24 25 4

148,724,956 1,846,094 1,472,219 553,574 120,600 14,410 (54,089,575) 98,642,278 220,974,827

21

59,749,412 161,225,415

284,414 P 161,509,829

23

0.05

0.06

0.06

MANILA BULLETIN PUBLISHING CORPORATION

STATEMENTS OF CASH FLOWS

Notes

2012

Years Ended December 31 2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES P 220,974,827 Income before income tax Adjustments for: 95,192,095 Depreciation 11 4,215,428 Provision for impairment and credit losses 5 Gain on sale of assets 19 (120,600) Interest income 54,089,575 Interest expense Operating income before changes in operating 374,351,325 assets and liabilities Changes in operating assets and liabilities: (Increase) decrease in: 72,588,001 Trade and other receivables 5,25,26 (45,122,548) Inventories 6 (197,828,595) Other assets 7,25,26 (3,332,539) Prepaid benefit obligation 22 123,599,518 Trade and other payables 13,25,26 324,255,162 Cash generated from operations 120,600 Interest received (54,089,575) Interest paid (77,547,447) Income taxes paid 192,738,740 Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment CASH FLOWS FROM FINANCING ACTIVITIES Payment of loans payable Proceeds from (payments of) bills payable Payment of dividends Net cash used in financing activities INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, AT END OF YEAR
See accompanying notes to financial statements.

P 271,937,263 116,279,284 4,001,091 124,715,185 (169,697) 63,865,584 580,628,710

P 262,059,397 128,234,717 4,358,420 716,208 (244,874) 62,918,007 458,041,875

(325,604,563) 37,588,298 132,510,495 (143,260,497) 125,271,521 407,133,964 169,697 (63,865,584) (2,158,419) 341,279,658

(105,784,548) (103,417,512) 170,778,964 (53,595,407) 67,423,143 433,446,515 244,874 (62,918,007) (64,529,376) 306,244,006

(92,007,411)

(102,279,603)

(229,376,777)

15,25 14,25 16

(90,000,000) 177,854,349 (151,048,012) (63,193,663)

(50,000,000) (74,994,191) (151,048,012) (276,042,203)

(50,000,000) 144,374,919 (151,048,012) (56,673,093)

37,537,666

(37,042,148)

20,194,136

33,654,965 P 71,192,632

70,697,113 P 33,654,965 P

50,502,976 70,697,113

4,25

MANILA BULLETIN PUBLISHING CORPORATION

STATEMENTS OF CHANGES IN EQUITY

Share Capital (Note 16)

Treasury Shares (Note 16)

Retained Earnings (Note 16)

Net Unrealized Gain on AFS Investments (Note 8)

Total

Balances at January 1, 2012 Net income for the year Other comprehensive income Total comprehensive income Cash dividends declared Balances at December 31, 2012

P 3,030,284,900 P 3,030,284,900

(16,347,977) (16,347,977)

248,311,729 161,225,415

161,225,415 (151,048,012) P 258,489,132

5,107,122 284,414 284,414 5,391,536

P 3,267,355,774 161,225,415 284,414 161,509,829 (151,048,012) P 3,277,817,591

Balances at January 1, 2011 Net income for the year Other comprehensive income Total comprehensive income Cash dividends Balances at December 31, 2011

P 3,030,284,900 P 3,030,284,900

(16,347,977) (16,347,977)

208,455,320 190,904,421 190,904,421 (151,048,012) P 248,311,729

4,711,238 395,884 395,884 5,107,122

P 3,227,103,481 190,904,421 395,884 191,300,305 (151,048,012) P 3,267,355,774

Balances at January 1, 2010 Prior period error (Note 16) As restated Net income for the year Other comprehensive income Total comprehensive income Cash dividends Impairment of AFS investments Balances at December 31, 2010

P 3,030,284,900 3,030,284,900 P 3,030,284,900

(16,347,977) (16,347,977) (16,347,977)

174,340,494 1,530,386 175,870,880 183,632,452 183,632,452 (151,048,012) P 208,455,320

3,652,774 3,652,774 505,329 505,329 553,135 4,711,238

P 3,191,930,191 1,530,386 3,193,460,577 183,632,452 505,329 184,137,781 (151,048,012) 553,135 P 3,227,103,481

See accompanying notes to financial statements.

MANILA BULLETIN PUBLISHING CORPORATION

NOTES TO FINANCIAL STATEMENTS
1. Corporate Information
Manila Bulletin Publishing Corporation (the Company) was incorporated in the Philippines on February 2, 1900. Its principal office is located at Manila Bulletin Bldg., Muralla corner Recoletos Sts., Intramuros, Manila. It is the first newspaper company in the Philippines to go public. As of this date, it is the oldest newspaper published in the country and the second oldest English newspaper in the Far East. It started as a commercial newspaper, publishing advertisements of shipping companies. It has maintained its leadership in the newspaper industry and in the publications of magazines with its advertisements, circulation and clientele. The broad sheet, Manila Bulletin is published seven days a week; the Philippine Panorama, a Sunday Weekly Magazine; Style Weekend, a Friday Weekly Magazine; Travel Magazine, published every second and fourth Thursday of the month; Tempo, a daily English tabloid; Balita, a daily Filipino; monthly magazines, namely: Agriculture, to help boost food production and promote livelihood programs; Cruising for sports and travel; Sense and Style, an upscale magazine, covers various facets lifestyle from its core content on homes and gardening to beauty and fashion, health and fitness, career, cooking and dining, travel, leisure and everything relevant to busy young urbanities; Animal Scene, which focuses on animals from pets to endangered species; and Sports Digest for sports aficionados and healthy entertainment; Sense and Style Magazine for womans fashion and beauty. On June 22, 1989, the Securities and Exchange Commission approved the Companys application of extension of amended Articles of Incorporation to extend its life for another Fifty (50) years. On July 1, 2005 Manila Bulletin Publishing Corporation acquired from Liwayway Publishing, Inc., its Tagalog daily newspaper, Balita, and weekly vernacular magazines, Liwayway, Bisaya, Hiligaynon and Bannawag including their trade names. The Company is 54.18% owned by U.S. Automotive Co., Inc, which was also incorporated in the Philippines. The financial statements of the Company were authorized for issue by the Board of Directors on April 12, 2013.

2. Summary of Significant Accounting and Financial Reporting Policies

Basis of Preparation The accompanying financial statements of the Company have been prepared under the historical cost convention basis, except for available-for-sale (AFS) investments that have measured at fair value. The financial statements are presented in the Philippine Pesos, which is the Companys functional currency. All amounts are rounded to the nearest peso, except when otherwise indicated. Statement of Compliance The Companys financial statements have been prepared in compliance with Philippine Financial Reporting Standards (PFRS). The term PFRS includes all applicable PFRS, Philippine Accounting Standards (PAS) and interpretation, which have been approved by the Financial Reporting Standard Council (FRSC) and adopted by the Securities and Exchange Commission (SEC), including SEC pronouncements.

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Changes in Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, except for the following amended PFRS which were adopted as of January 1, 2012. PFRS 7, Financial Instruments Disclosures (Amendment) requires additional disclosures about transfers of financial assets. The amendments require disclosure of information that enables users of the financial statements to understand the relationship between transferred financial assets that are not derecognized in their entirety and the associated liabilities; and to evaluate the nature of, and risks associated with, the entitys continuing involvement in derecognized financial assets. The amendment becomes effective on or before July 1, 2012. The amendment has no impact have no impact on the Companys financial position or performance. PAS 12, Income Taxes (Amendment) - Deferred Taxes: Recovery of Underlying Assets. The amendment clarified the determination of deferred tax on investment property measured at fair value. The amendment introduces a rebuttable presumption that deferred tax on investment property measured using the fair value model in PAS 40 should be determined on the basis that its carrying value amount will be recovered through sale. Furthermore, it introduces the requirement that deferred tax on non-depreciable assets are measured using revaluation model in PAS 16 always be measured on a sale basis of the asset. The amendment is effective for annual periods beginning on or after January 1, 2012. The amendment has no impact have no impact on the Companys financial position or performance.

New Standards and Interpretations Not Yet Adopted The following new standards, interpretations and amendments, which have not been applied in these financial statements, will or may have an effect on the Company's future financial statements: PAS 1, Financial Statement Presentation (Amendment). The main change resulting from these amendments is a requirement for entities to group items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. The amendment becomes effective on or before July 1, 2012. PAS 19, Employees Benefits (Amendment). Amendments to PAS 19 range from fundamental changes such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and re-wording. The Company is yet to assess the full impact of PAS 19 and its amendments. The amendment becomes effective for annual periods beginning on or after January 1, 2013. PAS 27, Separate Financial Statements (As revised in 2011). As a consequence of the new PFRS 10, Consolidated Financial Statements, and PFRS 12, Disclosure of interest in Other Entities, what remains of PAS 27is limited to accounting of subsidiaries, jointly-controlled entities, and associates in separate financial statements. The amendment becomes effective for annual periods beginning on or after January 1, 2013. PAS 28, Investments in Associates and Joint Ventures, prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. Under PAS 28, an entity shall account for an investment, or a portion of an investment, in an associate or a joint venture as held for sale if it meets the relevant criteria. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale shall be accounted for using the equity method until disposal of the portion that is classified as held for sale takes place.

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

PFRS 9, Financial Instrument: Classification and Measurement. This standard addresses the classification, measurement and recognition of financial assets and financial liabilities. PFRS 9 was issued in November 2009 and October 2010. It replaces the parts of PAS 39 that relate to the classification and measurement of financial instruments. PFRS 9 requires financial assets to be classified into two measurement categories: those measured as at fair value and those measured at amortized cost. The determination is made at initial recognition. The classification depends on the entitys business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the PAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entitys own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Company is yet to assess PFRS 9s full impact and intends to adopt PFRS 9 no later than the accounting period beginning on or after January 1, 2015. The Company will also consider the impact of the remaining phases of PFRS 9 when completed by the Financial Reporting Standard Council (FRSC). PFRS 10, Consolidated Financial Statements, provides a new definition of control that determines which entities are consolidated. PFRS 10 replaces the part of PAS 27, Consolidated and Separate Financial Statements, related to consolidated financial statements and replaces SIC 12 Consolidation Special Purpose Entities. PFRS 11, Joint Arrangements, deals with how a joint arrangement of which two or more parties have joint control should be classified. As newly defined, proportionate consolidation is not permitted for joint ventures. PFRS 11 replaces PAS 31, Interests in Joint Ventures and SIC 13 Jointly Controlled Entities Non-Monetary Contributions by Venturers. PFRS 12, Disclosure of Interests in Other Entities, is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in PFRS 12 are more extensive than those in the current standards. PFRS 13, Fair Value Measurement, establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The Standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The scope of PFRS 13 is broad; it applies to both financial instrument items and non-financial instrument items for which other PFRSs require or permit fair value measurements and disclosures about fair value measurements, except in specified circumstances. In general, the disclosure requirements in PFRS 13 are more extensive than those required in the current standards.

Annual Improvements to PFRSs (2009-2011 cycle) contain non-urgent but necessary amendments to PFRSs. The amendments are effective for annual periods beginning on or after January 1, 2013 and are applied retrospectively. Earlier application is permitted. PFRS 1, First time Adoption of PFRS Borrowing Costs The amendment clarifies that, upon adoption of PFRS, an entity that capitalized borrowing costs in accordance with its previous generally accepted accounting principles, may carry forward, without any adjustment, the amount previously capitalized in its opening statement of financial position at the date of transition. Subsequent to the adoption of PFRS, borrowing costs are recognized in accordance with PAS 23, Borrowing Costs. The amendment does not apply to the Company as it is not a first-time adopter of PFRS.

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

PAS 1, Presentation of Financial Statements Clarification of the requirements for comparative information. The amendments clarify the requirements for comparative information that are disclosed voluntarily and those that are mandatory due to retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond minimum required comparative period. The additional comparative period does not need to contain a complete set of financial statements. On the other hand, supporting notes for the third balance sheet (mandatory when there is a retrospective application of an accounting policy, or retrospective restatement or reclassification of items in the financial statements) are not required. The amendments affect disclosures only and have no impact on the Companys financial position or performance. PAS 16, Property, Plant and Equipment Classification of servicing equipment. The amendment clarifies that spare parts, stand-by equipment and servicing equipment should be recognized as property, plant and equipment when they meet the definition of property, plant and equipment and should be recognized as an inventory if otherwise. The Company is currently assessing the impact of this amendment. PAS 32, Financial Instruments; Presentation Tax effect of distribution to holders of equity instruments. The amendment clarifies that income taxes relating to distributions to equity holders and to transaction costs of an equity transaction are accounted for in accordance with PAS 12. The Company expects that this amendment will not have any impact on its financial position or performance. PAS 34, Interim Financial Reporting Interim financial reporting and segment information for total assets and liabilities. The amendment clarifies that the total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change from the amount disclosed in the entitys previous annual financial statements for that reportable segment. The amendment affects disclosures only and has no impact on the Companys financial position or performance.

None of the other new standards, interpretations and amendments, which are effective for periods beginning after January 1, 2012, and which have not been adopted early, are expected to have a material effect on the Company's future financial statements Financial Instruments Date of recognition Financial instruments are recognized in the statement of financial position when the Company becomes a party to the contractual provisions of the instruments. Purchases or sales of financial assets that require delivery of assets within the time frame established by the regulation or convention in the marketplace are recognized on the settlement date. Initial recognition and classification of financial instruments Financial instruments are recognized initially at fair value. Except for financial instruments at fair value through profit or loss (FVPL), the initial measurement of financial assets and liabilities includes transaction cost. The Company classifies its financial assets in the following categories: financial assets at FVPL, held to maturities (HTM) investments, available-for-sale (AFS) financial assets, and loans and receivables. The Company classifies its financial liabilities as other financial liabilities. The classification depends on the purpose for which the investments were acquired and whether they are quoted in an active market. Management determines the classification of its investments at initial recognition and, where allowed and appropriate, re-evaluates such designation at every reporting date.

10

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Determination of fair value The fair value for financial instruments traded in active markets at the financial position date is based on their quoted market price or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs. When current bid and asking prices are not available, the price of the most recent transaction provides evidence of the current fair value as long as there has been a significant change in economic circumstances since the time of the transaction. For all other financial instruments not listed in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques included net present value techniques, comparison to similar instruments for which market observable prices exist, options pricing models, and other relevant valuation models. Financial assets or liabilities at FVPL The Company has designated financial assets and liabilities at FVPL when either: The assets or liabilities are managed, evaluated and reported internally on a fair value basis; The designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or The asset or liability contains an embedded derivative that significantly modifies the cash flows that would otherwise be required under the contract.

As of December 31, 2012 and 2011, the Company has no financial assets or financial liabilities designated at FVPL. HTM investments HTM investments are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities for which management has the positive intention and ability to hold to maturity. Where the company sells other than an insignificant amount of HTM investments, the entire category would be tainted and reclassified as AFS financial assets. After initial measurement, these investments are subsequently measured at amortized cost using the effective interest rate method, less any impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees that are an integral part of the effective interest rate. The amortization is included in the investment income in the statement of comprehensive income. Gains and losses are amortized in income when the HTM investments are derecognized and impaired, as well as through the amortization process. The losses arising from impairment of such investments are recognized in the statement of comprehensive income. As of December 31, 2012 and 2011, the Company has no financial instruments classified as HTM investments. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, loans and receivables are subsequently measured at amortized cost using the effective interest method, less any allowance for impairment. Amortized cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and losses are recognized in the statement of comprehensive income when the loans and receivables are derecognized or impaired, as well as through the amortization process. Loans and receivables are included in current assets if maturity is within 12 months from the financial position date. Cash includes cash on hand and in banks which are stated at face value. As of December 31, 2012 and 2011, the Companys cash and trade and other receivables are included in this category.

11

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

AFS financial assets AFS investments are those non-derivative financial assets that are either designated in this category or not classified in any of the other categories. After initial recognition, AFS investments are measured at fair value with unrealized gains or losses being recognized in the statements of comprehensive income. When the investment is disposed of, the cumulative gains or losses previously recognized as other comprehensive income is recognized in other income. Interest earned or paid on the investment is reported as interest income or expense using the effective interest rate. When the fair value of AFS financial assets cannot be measured reliably because of lack of reliable estimates of future cash flows and discount rates necessary to calculate the fair value of unquoted equity instruments, these investments are carried at cost. As of December 31, 2012 and 2011, the Company has financial instruments classified as AFS included under non-current assets (see Note 8). Other financial liabilities Other financial liabilities include interest bearing loans and borrowings. All loans and borrowings are initially recognized at the fair value of the consideration received less directly attributable transaction costs. Other financial liabilities relate to Trade and other payables and Loans payable including current portion. Gains and losses are recognized under the other income (charges) account in the statement of comprehensive income when the liabilities are derecognized or impaired, as well as through amortization process. Impairment of Financial Assets At each reporting date, the Company assesses whether a financial asset or group of financial assets is impaired. Loans and receivables For loans and receivables carried at amortized cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, continues to be, recognized are not included in a collective assessment for impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of the estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of loss is charged to the statement of comprehensive income. Interest income continues to be recognized based on the original effective interest rate of the asset. Loans and receivables, together with the associated allowance account, are written off when there is no realistic prospect of future recovery and all collateral has been realized. If, in a subsequent period, the amount of the estimated impairment loss decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognized in the statement of comprehensive income, to the extent that the carrying value of the asset does not exceed its amortized cost at the reversal date.

12

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. Time value is generally not considered when the effect of discounting is not material. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate, adjusted for the original credit risk premium. The calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is probable. For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of such credit risk characteristics as type of borrower, collateral type, past-due status and term. Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. AFS financial assets In case of equity investments classified as AFS financial assets, impairment indicators would include a significant or prolonged decline in the fair value of the investments below its cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the statement of comprehensive income is removed from the equity and recognized in the statement of comprehensive income. Impairment losses on equity investments are not reversed through the statement of comprehensive income. Increases in fair value after impairment are recognized directly in equity. In the case of debt instruments classified as AFS financial assets, impairment is assessed based on the same criteria as financial assets carried at amortized cost. Interest continues to be accrued at the original effective interest rate on the reduced carrying amount of the asset and is recorded as part of Investment income in the statement of comprehensive income. If in subsequent year, the fair value of a debt instrument increased and the increase can be objectively related to an event occurring after the impairment loss was recognized in the statement of comprehensive income, the impairment loss is reversed through the statement of comprehensive income. HTM investments For HTM investments, the Company assesses whether there is objective evidence of impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The carrying amount of the asset is reduced through use of an allowance account and the amount of loss is charged to the statement of comprehensive income. Interest income continues to be recognized based on the original effective interest rate of the asset. If subsequently, the amount of the estimated impairment loss decreases because of an event occurring after the impairment was recognized, any amount formerly charged are credited to the Provision for impairment losses in the statements of comprehensive income and the allowance account, reduced. The HTM investments, together with the associated allowance accounts, are written off when there is no realistic prospect of future recovery and all collateral has been realized. Derecognition of Financial Assets and Financial Liabilities Financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized when: The rights to receive cash flows from the asset have expired; The Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to third party under a pass-through arrangement; or

13

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

The Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all risks and rewards of the asset, but has transferred control of the asset.

Where the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Companys continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company would required to repay. Financial liabilities A financial liability is derecognized when the obligation under the liability was discharged, cancelled or has expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts in recognized in the statement of comprehensive income. Offsetting of Financial Instruments Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position if, and only if, the Company has a legal right to set off the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. This is generally the case with master netting agreements; thus, the related assets and liabilities are presented gross in the statement of financial position. Inventories Inventories are valued at the lower of cost or net realizable value (NRV). NRV is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Cost is determined by the weighted average method for newsprint and by first-in, first-out method for machinery spare parts and supplies. Cost comprises all costs of purchase, handling costs and other costs incurred in bringing the inventories to the present location or condition. Allowance is provided for obsolescence due to deterioration, damage, bad quality, age and technological changes. Full obsolescence allowance is provided when the inventory is non-moving for more than one year. An allowance for market decline is also provided equivalent to the difference between the cost and the NRV of inventories. When inventories are sold, the related allowance is reversed in the same period. Newsprint and printing supplies are consumed upon withdrawal from the storeroom for use in the daily printing of newspapers and magazines. Property, Plant and Equipment Property, plant and equipment, except for land, are stated at cost less accumulated depreciation. Cost of an item of property, plant and equipment comprises of its purchase price and any cost attributable in bringing the asset to its intended location and working condition. The cost of self-constructed assets includes the costs of materials and direct labor, and any other cost directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring to site on which they are located. Cost also includes interest and other financing charges on borrowed funds used to finance the acquisition of property and equipment to the extent incurred during the period of installation and construction. Land is stated at cost less any impairment in value.

14

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Major spare parts and stand-by equipment items that the Company expects to use more than one (1) period and can be used only in connection with an item of property, plant and equipment are accounted for as property, plant and equipment. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Construction in progress, included in property, plant and equipment, is stated at cost. This cost includes cost of construction, plant and equipment and other direct costs. Construction in progress is not depreciated until such time as the relevant assets are completed and put into operational use. Projects under construction are transferred to the related property, plant and equipment account when the construction or installation and related activities necessary to prepare the property, plant and equipment for their intended use are completed, and the property, plant and equipment are ready for service. Subsequent costs The cost of replacing of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The cost of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in the circumstances indicate that the carrying values may not be recoverable. Depreciation Depreciation and amortization of property, plant and equipment commence, once the property, plant and equipment are available for use (i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by the Company) and are computed using the straight-line method over the estimated useful lives (EUL) of the assets regardless of utilization. Depreciation is recognized in profit or loss. The EUL for each item of property, plant and equipment of the Company follows:

Buildings Machineries and equipment Furniture, fixtures and equipment Transportation equipment

Years 10-20 10-15 3-10 3-7

The cost of the leasehold improvements is amortized over the shorter of the covering lease term or the EUL of the improvements of 5-10 years. Depreciation methods, useful lives and residual values are reassessed periodically to ensure that the periods and method of depreciation are consistent with the expected pattern of economic benefits from items of property and equipment. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable. Derecognition An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statements of comprehensive income, in the year the item is derecognized.

15

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Investment Property Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at cost less impairment. An investment property is derecognized when either it has been disposed of or when the investment property is permanently withdrawn from use or no future economic benefit is expected from its disposal. Intangible Asset Goodwill Goodwill represents the excess of cost of the acquisition over the fair value of identifiable net assets of the investee at the date of acquisition which is not identifiable to specific assets. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill on acquisitions is not amortized but is reviewed for impairment, annually or more frequently if events of changes in circumstances indicate that the carrying value may be impaired. Non-current Asset Held for Sale Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. Impairment of Non-Financial Assets The carrying amounts of the Companys non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the assets recoverable amount is estimated. An impairment loss is recognized when the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using the pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates using the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation and amortization, if no impairment loss had been recognized. Borrowings and Borrowing Costs All borrowings are initially recognized at the fair value of the consideration received less directly attributable debt issuance costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into consideration any issue costs, and any discount or premium of settlement.

16

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Borrowing costs are generally expensed in the period in which they are incurred and are shown in the statements of comprehensive income. Borrowing costs and other finance costs incurred during the construction period on borrowing used to finance the construction of an asset are capitalized to the appropriate asset accounts. Capitalization of borrowing costs commences when the activities to prepare the asset are in progress and expenditures and borrowing costs are being incurred. The capitalization of these borrowing costs ceases when substantially all the activities necessary to prepare the asset to its intended use are complete. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recorded. Capitalized borrowing cost is based on the applicable weighted average borrowing rate. Equity Share Capital Capital stock is determined using the nominal value of shares that have been issued. Retained Earnings Retained earnings include all current and prior period results as disclosed in the statement of comprehensive income. Treasury shares Treasury shares are recorded at cost and are presented as a deduction from equity. When the shares are retired, the capital stock account is reduced by its par value. The excess of cost over par value upon retirement is debited to the following accounts in the order given: (a) additional paid-in capital to the extent of the specific or average additional paid-in capital when the shares were issued, and (b) retained earnings. No gain or loss is recognized in the statement of comprehensive income on the purchase, sale, issue or cancellation of the Companys own equity instruments. Comprehensive Income The Company uses single statement of comprehensive income, in which it presents all items of income and expenses recognized during the period. Revenue and Expense Recognition Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount of the revenue can be measured reliably. The Company assesses its revenue arrangement against specific criteria to determine if it is acting as principal or agent. The following specific recognition criteria must also be met before revenue is recognized: Advertising Advertising revenue is recognized as income on the dates the advertisements are published. The fair values of barter transactions from advertisements exchanged for assets or services are included in advertising revenue and the related accounts. Goods received in exchange for advertisement pursuant to ex-deal transactions executed between the Company and its customers are recorded at fair value of assets received. Fair market value is the current market price. Circulation Revenue from circulation which consists of sales of daily newspapers and the weekly and monthly magazines is recognized upon delivery, when the significant risks and rewards of ownership of the goods have passed to the buyer and the amounts of revenue can be measured reliably. This is stated net of sales discounts, returns and allowances. Rental income Rental income is recognized as income on a straight-line basis over the lease term. Dividend income Dividend income is recognized when the shareholders right to receive the payment is established.

17

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Royalty income Royalty income is recognized on accrual basis in accordance with the substance of the relevant agreement. Interest income Interest income from bank deposits is recognized as the interest accrues taking into account the effective yield on the asset. Other income Revenue from printing services is recognized when the services are rendered. Revenue from sale of scrap and spoiled newspapers is recognized upon delivery. Revenue from notarization is recognized when services are rendered. Costs and Expenses Cost and expenses are recognized in the statement of comprehensive income when decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably. Cost and expenses are charged to operations when incurred. Retirement Plan The liability recognized in the statement of financial position in respect of the defined benefit pension plans is the present value of the defined benefit obligation at the financial position date minus the fair value of plan assets, together with adjustments for actuarial gains/losses and past service costs. The defined benefit obligation is calculated periodically by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash flows using interest rates of debt securities that are denominated in the currency in which the benefits will be paid, and that have terms to maturity which approximate the terms of the related retirement liability. Gains or losses on the curtailment or settlement of retirement benefit are recognized when the curtailment or settlement occurs. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are credited to or charged against income when the net cumulative unrecognized actuarial gains and losses at the end of the previous period exceeds 10% of the higher of the defined benefit obligation and the fair value of the plan assets at that date. These gains or losses are recognized over the expected average remaining working lives of the employees participating in the plan. Past service cost, if any, are recognized immediately in the statement of comprehensive income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service cost are amortized on a straight-line basis over the vesting period. Leases The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date, and requires an assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies: (i) (ii) (iii) (iv) there is a change in contractual terms, other than a renewal or extension of the arrangement; a renewal option is exercised or an extension is granted, unless that term of the renewal or extension was initially included in the lease term; there is a change in the determination of whether fulfillment is dependent on a specified asset; or there is a substantial change to the asset.

18

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for any of the scenarios above, and at the date of renewal or extension period for the second scenario. Company as a lessee Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognized as an expense in the statement of comprehensive income and expenses on a straight-line basis over the lease term. Company as a lessor Leases where the Company does not transfer substantially all the risks and benefits of ownership of the assets are classified as operating leases. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as the rental income. Contingent rents are recognized as revenue in the period in which they are earned. Income Taxes Current tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted as of the financial position date. Deferred tax Deferred income tax is provided, using balance sheet liability method on temporary differences at the financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all deductible temporary differences, carryforward benefit of unused tax credits (minimum corporate income tax or MCIT) and unused tax losses (net operating loss carry over or NOLCO), to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward benefit of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax to be utilized. Unrecognized deferred tax assets are reassessed at each financial position date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that is expected to apply to the period when the asset is realized or settled, based on tax rate (and tax laws) that has been enacted or substantively enacted at the financial position date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Value added Tax Revenue, expenses and assets are recognized net of the amount of Value added tax (VAT) except: Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; Receivables and payables that are stated with the amount of VAT included.

19

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of Prepaid expenses and other current assets or Other payables account in the statement of financial position. Provision and Contingencies Provision Provision is recognized when: (a) the Company has a present obligation (legal or constructive) as a result of a past event; (b) it is probable (i.e. more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. Where the Company expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pretax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as interest expense. Provisions are reviewed at each financial position date and adjusted to reflect the current best estimate. Contingencies A contingent asset is not recognized in the financial statements but disclosed when an inflow of economic benefits is probable. Contingent liabilities are not recognized in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Related Party Transactions Parties are considered to be related if one of the parties has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subjected to common control or common significant influence. Related parties may be individuals or corporate entities. Foreign Currency Transaction and Translations Transactions in foreign currencies are initially recorded in the functional currency rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to profit or loss. Basic and Diluted Earnings per Share Basic and diluted earnings per share is computed by dividing net income for the year by the weighted average number of common shares issued and outstanding during the year, after giving retroactive effect to stock dividends declared, stock rights exercised and stock split declared during the year, if any. The Company does not have any potential diluters; hence, basic and diluted earnings per share are the same. Subsequent Event Post-year-end events that provide additional information about the Companys position at the financial position date (adjusting events) are reflected in the financial statements. Post-year-end events that are not adjusting events are disclosed in the notes to financial statements, when material.

3. Significant Accounting Judgments and Estimates

The preparation of the financial statements in accordance with PFRS requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingent assets and contingent liabilities. Future events may occur which will cause the assumptions used in arriving at the estimates to change. The effects of any change in estimates are reflected in the financial statements as they become reasonably determinable.

20

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Judgments In the process of applying the Companys accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effects on amounts recognized in the financial statements: Revenue recognition In making judgment, the management considered the detailed criteria for the recognition of revenue from the sale of goods set out in PAS 18 Revenue and, in particular, whether the Company had transferred to the buyer the significant risks and rewards of ownership of the goods. Fair value of financial instruments Where fair values of financial assets and financial liabilities recorded on the statement of financial position cannot be derived from the active markets, they are determined using a variety of valuation techniques that include the use of mathematical models. The input to these models is taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Operating leases agreement The Company has entered into various lease agreements either as a lessor or as a lessee. Critical judgment was exercised by the management to distinguish each lease agreement as either an operating or finance lease by looking at the transfer or retention of significant risk and rewards of ownership of the properties covered by the agreements. All of the Companys lease agreements were determined as operating leases. Rent income amounted to P1.8 million and P1.6 million for the years ended December 31, 2012 and 2011, respectively (see Notes 20 and 24). Rental expense amounted to P17.1 million and P17.3 million for the years ended December 31, 2012 and 2011, respectively (see Notes 19, 24). Functional currency The Company has determined that its functional currency is the Philippine peso. It is the currency of primary economic environment in which the Company operates. Distinction between investment properties and owner-occupied properties The Company determines whether a property qualifies as investment property. In making its judgment, the Company considers whether the property generates cash flows largely independent of the other assets held by an entity. Owner-occupied properties generate cash flows that are attributable not only to property but also to the other assets used in the production or supply process. Some properties consist of a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production of services or for administrative purposes. If these portions cannot be sold separately, the property is accounted for as investment property only if an insignificant portion is held for use in the production of services or for administrative purposes. Judgment is applied in determining whether ancillary services are so significant that a property does not qualify as investment property. The Company considers each property separately in making judgment. The Company classifies all properties which have a portion that is earning rentals and another portion which are used in production of services or used in administrative purposes as owner-occupied properties based on the criterion above. In this case, such properties were included in the account Property, plant equipment.

21

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Estimates and Assumptions The key assumptions concerning the future and other key sources of estimation uncertainties at the end of reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: Fair values of financial assets and liabilities The Company carries certain financial assets at fair value, which requires extensive use of accounting estimates and judgments. Fair value determinations for financial assets and liabilities are based generally on listed or quoted market prices. If prices are not readily determinable or if liquidating the positions is reasonably expected to affect market prices, fair value is based on either internal valuation models or managements estimate of amounts that could be realized under current market conditions, assuming an orderly liquidation over a reasonable period of time. The fair values of the financial assets and liabilities as of December 31, 2012 and 2011 are disclosed in Note 26. Estimated allowance for doubtful accounts on trade receivables The Company maintains an allowance for doubtful accounts at a level considered adequate to provide for potential uncollectible receivables. The level of allowance is evaluated by the Company on the basis of factors that affect the collectability of the accounts. The review is accomplished using a combination of specific and collective assessment. The factors considered is specific impairment assessment are the length of the Companys relationship with customers, customers current credit status based on known factors, age of the accounts and other available information that will indicate objective evidence that the customers may unable to meet their financial obligations. The collective impairment assessment is based on historical loss experience and deterioration in the market in which the customers operate. The amounts and timing of recorded provision for doubtful accounts for any period would differ if the Company made different assumptions or utilized different estimates. The related balances follow (see Note 5):

2012 Receivables Allowance for impairment losses Provision for impairment losses P 1,886,507,652 51,276,125 4,034,578 P

2011 1,959,095,652 47,241,546 4,001,091

Net realizable value of inventories The Company records a provision for excess of cost over the net realizable value of materials and supplies whenever the value of material and supplies becomes lower than cost due to damage, physical deterioration, obsolescence, change in price levels or other causes. The lower of cost or net realizable value of inventories is reviewed on a monthly basis to reflect the accurate valuation in the financial records. Materials and supplies identified to be obsolete and unusable are written off and charged as expense for the year. The carrying values of inventories amounted to P1.24 million and P1.20 million as of December 31, 2012 and 2011, respectively. There were no provisions for inventory losses in 2012 and 2011 (see Note 6). Impairment of AFS financial assets The computation for the impairment of AFS financial assets requires an estimation of the present value of the expected future cash flows and the selection of an appropriate discount rate. An impairment issue arises when there is an objective evidence of impairment, which involves significant judgment. In making this judgment, the Company evaluates the financial health of the issuer, among others. In the case of AFS equity instruments, the Company expands its analysis to consider changes in the issuers industry performance, legal and regulatory framework, and other factors that affect the

22

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

recoverability of the Companys investments. Further, the impairment assessment would include an analysis of the significant or prolonged decline in fair value of the investments below its cost. As of December 31, 2012 and 2011, the carrying value of the Companys AFS financial assets amounted to P5.87 million and P5.76 million, respectively (see Note 8). Estimated useful lives of property, plant and equipment The Company reviews annually the estimated useful lives of property, plant and equipment based on the period over which the assets are expected to be available for use and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The related balances follow (see Note 11):

2012 Cost Accumulated depreciation Depreciation expense P 4,978,099,641 2,111,831,445 95,192,095 P

2011 4,886,092,230 2,016,639,350 116,279,284

Impairment of Non-Financial Assets The Company assesses impairment on assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The factors that the Company considers important which could trigger an impairment review include the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of the acquired assets or the strategy for overall business; and significant negative industry or economic trends.

An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell and value in use. The fair value less costs to sell is the amount obtainable from the sale of an asset in an arms length transaction while value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit to which the asset belongs. In determining the present value of estimated future cash flows expected to be generated from the continued use of the assets, the Company is required to make estimates and assumptions that can materially affect the financial statements. No indications of impairment were noted on property, plant and equipment and investment property as of December 31, 2012 and 2011. Recognition of deferred income tax assets The Company reviews the carrying amounts of the deferred income tax assets at the end of each reporting period and adjusts the balance of deferred income tax assets to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred income tax assets to be utilized. The Companys assessment on the recognition of deferred income tax assets on deductible temporary differences is based on the level and timing of forecasted taxable income of the subsequent reporting periods. This forecast is based on the Companys past results and future expectations on revenues and expenses as well as future tax planning strategies. However, there is no assurance that the Company will generate sufficient taxable income to allow all or part of the deferred income tax assets to be utilized.

23

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

As of December 31, 2012 and 2011, the carrying values of the Companys deferred tax assets net of deferred tax liability amounted to P13.60 million and P6.43 million, respectively.

4. Cash
The account at December 31 consists of the following:

2012 Cash on hand Cash in banks P P 9,832,796 61,359,836 71,192,632 P P

2011 13,195,091 20,459,874 33,654,965

Cash in banks consist of savings, current and dollar deposits, which are unrestricted as to withdrawal. Savings Peso and dollar deposits earned interest at the prevailing bank deposit rates. Interest income earned from cash in banks amounted to P120,600 and P160,997 in 2012 and 2011, respectively. As of December 31, 2012 and 2011, cash in bank includes foreign currency-denominated deposits amounting to $34,052 and $110,891, respectively (see Note 25).

5. Trade and Other Receivables

The account at December 31 consists of the following:

2012 Trade Others Allowance for impairment losses P P 1,768,538,523 117,969,129 1,886,507,652 51,276,125 1,835,231,527 P

2011 1,845,945,924 113,149,728 1,959,095,652 47,241,546 1,911,854,106

Trade receivables are non-interest bearing and generally on a 60-day credit term. All provincial circulations are covered by post-dated checks. Other receivables are receivables from other revenues generated from commercial printing, gift certificates and credit cards which are collected within one year. The Company evaluates the possibility of losses that may arise out of the non-collection of receivables based on a certain percentage of the outstanding balance of receivable and on an evaluation of the current status of the account. Allowance for doubtful accounts relates to trade receivables. No allowance was provided on non-trade receivables. The movement in the allowance for doubtful accounts follows:

2012 Balance, January 1 Provision for the year Accounts written-off P 47,241,546 4,034,578 51,276,124 P

2011 64,187,613 4,001,091 (20,947,158) 47,241,546

24

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

6. Inventories
The account at December 31 consists of the following:

2012 News print Printing materials, supplies and spare parts Total costs Less : Allowance for inventory writedown Net realizable value P 1,052,756,182 195,746,650 1,248,502,832 7,068,324 1,241,434,508 P

2011 1,043,260,190 160,120,094 1,203,380,284 7,068,324 1,196,311,960

There are no transactions or events which occurred during the year involving the following:

Declines subsequent to financial position date in market prices of inventory not protected by firm sales contract. Changes in pricing methods and the effects thereof; Unusual purchase commitments and accrued net losses, if any, on such commitments. (Losses which are expected to arise from firm and non-cancellable commitments for the future purchase of inventory items should, if material, be recognized in the accounts and separately disclosed in statements of comprehensive income); The amount of any substantial and unusual write downs.

The cost of inventories recognized as expense in the statement of comprehensive income amounted to P1.72 billion and P1.73 billion for the years ended December 31, 2012 and 2011, respectively. The inventories do not secure any existing outstanding loans obligation with any public financial institutions.

7. Other Current Assets

The account at December 31 consists of the following:

2012 Due from exchange deal transactions Prepaid expenses P P 176,049,708 142,409,515 318,459,223 P P

2011 29,321,999 123,752,331 153,074,330

Due from exchange deal transactions Ex-deal agreements are contracts executed between the Company and its customers wherein advertising services are provided in exchange for goods or other valuable consideration. The advertising services provided by the Company approximate the fair value of assets to be received. The transfer of ownership of those assets will occur upon completion of the services or as agreed upon by the parties. Prepaid expenses consist mainly of prepayments for taxes and insurance premiums of the Company properties owned and/or leased. These prepayments are being amortized on a regular basis.

25

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

8. Available-for-sale Investments
The available-for-sale investment consists of:

2012 Quoted equity securities Proprietary shares P P

The roll forward analysis of this account follows:

2011 P P 5,449,040 315,000 5,764,040

5,552,604 315,000 5,867,604

2012 Beginning Balance Changes in fair value Impairment of AFS P 5,764,040 284,414 (180,850) 5,867,604 P

2011 5,368,156 395,884 5,764,040

The roll forward analysis of unrealized gain on AFS account follows:

2012 Beginning Balance Changes in fair value Impairment of AFS P 5,107,122 285,514 (1,100) 5,391,536 P

2011 4,711,238 395,884 5,107,122

9. Property, Plant and Equipment

The rollforward analysis of this account follows:
Leasehold improvements 2012 Machinery, tools and equipment Furniture, fixtures and equipment Transportation equipment P 71,067,075 3,879,543 74,946,618

Land Cost At January 1, 2012 Additions At December 31, 2012 Accumulated depreciation and amortization At January 1, 2012 Depreciation and amortization At December 31, 2012

Buildings

Total P4,886,092,230 92,007,411 4,978,099,641

P 255,568,682 P 604,654,586 P 10,105,263 1,785,714 265,673,945 606,440,300

17,492,329 P 3,087,821,614 P 849,487,944 68,607,849 7,629,042 17,492,329 3,156,429,463 857,116,986

103,112,372 12,612,617 115,724,989 P

16,368,510 1,123,819 17,492,329

1,047,422,173 63,630,915 1,111,053,088

785,308,441 14,859,108 800,167,549 P 56,949,437 P

64,427,854 2,965,636 67,393,490 7,553,128

2,016,639,350 95,192,095 2,111,831,445 P2,866,268,196

P 265,673,945 P 490,715,311

- P 2,045,376,375

26

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Land Cost At January 1, 2011 Additions Retirements/disposals At December 31, 2011 Accumulated depreciation and amortization At January 1, 2011 Depreciation and amortization At December 31, 2011

Buildings

Leasehold improvements

2011 Machinery, Furniture, tools and fixtures equipment and equipment

Transportation equipment 66,742,967 4,324,107 71,067,075

Total P4,988,371,833 80,220,397 (182,500,000) 4,886,092,230

P 405,568,682 P 632,000,540 P 5,154,046 (150,000,000) (32,500,000) 255,568,682 604,654,586

17,492,330 P 3,021,963,926 P 844,603,389 P 65,857,688 4,884,556 17,492,330 3,087,821,614 849,487,945

90,170,454 12,941,918 103,112,372

14,772,544 1,595,966 16,368,510

974,742,437 72,679,736 1,047,422,173

762,391,258 22,917,183 785,308,441 P 64,179,503 P

58,283,373 6,144,481 64,427,854 6,639,221

1,900,360,066 116,279,284 2,016,639,350 P2,869,452,880

P 255,568,682 P 501,542,214 P

1,123,820 P 2,040,399,441

Included in the account furniture, fixtures and equipment is the total cost of upgraded versions of computer hardware and software for editorial, advertising, circulation and financial management systems. The Company continues to modernize its facilities and it has computerized the entire process of preprinting until full-page output, including color. In addition, the Company acquired new machines for commercial printing, which are used for printing magazines, posters, catalogues and other collaterals; format printers were also installed for billboards and streamers. The upgrading and modernization of these facilities will be on a continuing basis. Depreciation of property, plant and equipment are distributed as follows:

2012 Cost of Printing Operating expenses P P 63,909,466 31,282,629 95,192,095 P P

2011 68,659,089 47,620,195 116,279,284

Included in machinery, tools and equipment is the cost of construction/installation of a plant facility which is still in process amounting to P24,920,784 and P23,949,976 as of December 31, 2012 an 2011, respectively. This amount is not depreciated until the construction is completed and the asset is put into operational use. Certain property and equipment with a carrying value of P704.9 Million and P721.8 Million as of December 31, 2012 and 2011 were pledged as collateral to secure a loan. (see Note 15). Fully depreciated property and equipment with cost amounting to P17.5 Million are still being used by the Company.

10. Investment Property

In 2010, the Company acquired a land located in Sta. Rosa, Laguna amounting to P94,808,970 which is being held for capital appreciation and future development. As of December 31, 2012 and 2011, the fair value of this asset was not determined. The management believes, however, that there were no conditions present in 2012 and 2011 that would significantly reduce the fair value of the investment property from that determined in 2010.

27

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

11. Goodwill
The Company recognized goodwill from acquisition of Tagalog daily newspaper, Balita, and weekly vernacular magazines, Liwayway, Bisaya, Hiligaynon and Bannawag amounting to P5,000,000. This asset is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. No impairment loss on goodwill was recognized in 2012 and 2011.

12. Other Noncurrent Assets

This account consists of:

2012 Deferred input tax Assets held for sale Input VAT Rental and other deposits Due from BIR P 86,471,822 53,101,287 32,608,425 5,235,925 69,590 177,487,049 P

2011 76,973,885 53,101,287 8,905,217 5,989,484 73,474 145,043,347

Assets held for sale consists of assets acquired from ex-deal transactions. In 2011, the Company assessed that these assets have met the criteria to be classified as held-for-sale because these assets are available for immediate sale and can be sold to a potential buyer in their present condition. Input VAT is fully recoverable and can be applied against output VAT

13. Trade and Other Payables

The account as of December 31 consists of the following:

2012 Trade Accrued expenses Uncollected VAT payable Withholding taxes payable Output VAT Premiums payable P 2,101,550,717 93,709,090 91,675,730 37,180,019 30,411,036 3,777,323 2,358,303,915 P

2011 2,024,451,747 89,955,928 79,376,296 28,656,662 8,834,295 3,429,469 2,234,704,397

Trade payables pertain to unpaid billings to suppliers of raw materials which are normally settled within ninety (90) days. Accrued expenses consist mainly of salaries, commissions and rebates which are normally settled within the next financial year. Premiums payable pertain to SSS, HDMF, healthcare, housing and other loans of the Companys employees.

28

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

14. Trust Receipts Payable

The account represents trust receipts payable incurred in the importation of newsprint materials, which are the major components in the production of the Companys newspapers and magazines. The inventory is maintained at a level commensurate enough to cover the corresponding level of the obligation. This obligation is unsecured. The payments are made as every promissory note matures. Interest rate ranges from 5.25% to 5.30% in 2012 and 2011, respectively. As of December 31, 2012 and 2011, the trust receipts payable amounted to P389,727,984 and P211,873,635, respectively.

15. Loans Payable

This account consists of:

2012 Current Noncurrent P P 110,000,000 550,000,000 660,000,000 P P

2011 180,000,000 570,000,000 750,000,000

The Companys loans payable are the credit facilities obtained from private banking institutions. The proceeds of the loans were used for the expansion of production facilities. Loans payable mature until July 12, 2026 and bear interest rates ranging from 11%-14% in 2012 and 2011. The current portion of the long-term loans pertains to the amount of the liability due within one year following the close of the financial position date. The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant. The Company is required to comply with certain loan covenants, including maintenance of certain financial ratios at the year end of every financial year. The details of machineries and equipment pledged as security on loans payable follows:

2012 Cost Accumulated depreciation P P 844,677,850 (139,764,050) 704,913,800 P P

2011 844,677,850 (122,870,492) 721,807,358

16. Equity
Capital stock: The details are as follow:

2012 Authorized - 6,000,000,000 shares par value @ P1 per share Issued and subscribed Treasury shares P 6,000,000,000 3,030,284,900 16,347,977 P

2011 6,000,000,000 3,030,284,900 16,347,977

29

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Retained Earnings and Dividends In a meeting held on July 12, 2012, the Board of Directors approved the declaration of cash dividend of five percent (5%) or five centavos (P0.05) per share based on the subscribed and outstanding capital stock of 3,020,960,250 (net of treasury shares 9,324,650) shares payable on September 3, 2012 to stockholders of record as of August 8, 2012 to be taken from the unrestricted retained earnings of the Company as of December 31, 2012. In a meeting held on July 14, 2011, the Board of Directors approved the declaration of cash dividend of five percent (5%) or five centavos (P0.05) per share based on the subscribed and outstanding capital stock of 3,020,960,250 (net of treasury shares 9,324,650) shares payable on September 5, 2011 to stockholders of record as of August 10, 2011 to be taken from the unrestricted retained earnings of the Company as of December 31, 2012. Prior period error In 2010, the Companys prior period adjustment amounting to P1,530,386 relates to the effect of adoption of and PAS 19, employee benefits.

17. Revenues
The revenue from advertising and circulation for the years ended December 31, 2012, 2011 and 2010 are as follows:

2012 Advertising Circulation Less: Sales return Sales discount P 1,683,629,068 1,652,802,396 3,336,431,464 330,537,817 P 3,005,893,647

2011 P 1,676,349,018 1,640,440,146 3,316,789,164 333,525,017 P 2,983,264,147

2010 P 1,655,954,142 1,663,094,668 3,319,048,810 375,172,961 384,610 P 2,943,491,239

18. Cost of Sales and Services

The account as of December 31 consists of the following:

2012 Newsprint, ink and press supplies Depreciation of machinery and equipment P 1,717,298,773 63,909,466 P 1,781,208,239

2011 P 1,728,181,569 68,659,089 P 1,796,840,658

2010 P 1,638,073,328 72,857,514 P 1,710,930,842

30

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

19. Operating Expenses

2012 Salaries and employee benefits Freight and handling charges Advertising and promotions Communication, light and water Security and janitorial Features purchased and news services Repairs and maintenance Depreciation expense Transportation and travel Rent expense Gas and oil Taxes and licenses Stationery and office supplies Insurance SSS and Pag-ibig premiums Entertainment and representation Commission Provision for doubtful accounts Membership dues and subscriptions Charitable contributions Documentary stamps Professional fees Others P 415,082,005 157,021,652 106,451,531 98,070,371 75,796,671 46,483,341 39,416,897 31,282,630 25,572,968 17,144,101 15,378,661 14,198,504 12,699,452 11,300,659 8,342,159 7,138,158 5,033,712 4,034,578 1,978,788 1,606,089 881,845 592,582 6,845,505 P 1,102,352,859 P 2011 375,192,114 143,989,092 103,607,849 92,774,385 76,340,714 61,999,519 36,392,344 47,620,195 38,805,315 17,262,342 17,483,826 16,151,435 23,254,813 12,436,460 8,731,437 7,879,694 4,726,003 4,001,091 3,072,377 8,854,250 1,250,231 864,024 347,002 P 1,103,036,512 P 2010 380,969,644 101,864,683 72,271,554 88,703,814 75,128,829 62,862,593 47,058,126 55,377,203 35,062,383 18,395,097 13,168,354 17,293,302 28,546,945 12,534,937 8,642,074 7,928,861 3,903,721 4,358,420 3,703,423 8,436,520 3,548 4,689,166 262,984 P 1,051,166,181

20. Other Operating Income

This account consists of the following:

2012 Printing services Sale of spoiled newpapers Sale of scrap newspapers Sale of newsprint wastes Income from notarization Miscellaneous P 82,362,854 46,142,601 11,605,825 1,250,426 486,644 6,876,606 148,724,956 P

2011 5,365,643 42,973,719 10,698,074 1,045,019 437,026 188,054,536 248,574,017 P

2010 50,313,203 46,154,327 5,257,801 958,446 295,399 14,421 102,993,597

Miscellaneous income includes revenue from additional price that the Company charges for special designs, colors and borders of an advertisement.

31

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

21. Income Tax

The Companys provision for income tax includes the regular corporate income tax (RCIT), minimum corporate income tax (MCIT) and final tax paid at the rate of 20% for peso deposits and 7.50% for foreign currency deposits which are final withholding tax on gross interest income. These income taxes as well as the deferred tax provisions are presented for income tax in the statement of comprehensive income. Details follow:

2012 Current Deferred P P 66,922,552 (7,173,140) 59,749,412 P P

2011 75,941,540 5,091,302 81,032,842 P P

2010 79,739,025 (1,312,080) 78,426,945

Under Republic Act No. 9337 Income tax amendments, the corporate income tax rate applicable from January 1 to October 31, 2005 of 32% in 2005 was increased to 35% effective November 1, 2005, decreasing to 30% effective on January 1, 2009. Because of the change in the corporate income tax rate, the allowable deduction for interest expense in Section 34(B)(1) is reduced by 42% (from 38%) of interest income subject to final tax and 33% (from 42%) upon the effectivity of the 30% corporate tax rate on January 1, 2009. A reconciliation of income tax computed at the statutory income tax rate to the provision for income tax follows:

2012 Statutory income tax Tax effects on: Income subjected to final tax Tax exempt income Non-taxable income Allowable expenses Unallowable expenses P 66,292,448 (477,846) (4,323) (164,294) 1,276,567 P 66,922,552 P P

2011 81,581,179 (566,220) (2,610) (2,928) (6,284,147) 1,216,266 75,941,540 P P

2010 78,617,819 (207,955) (831) 1,329,992 79,739,025

The following are the composition of deferred income tax recognized by the Company:

2012 Deferred tax asset Allowance for doubtful accounts Deferred tax liabilities Unrealized gain on AFS Unrealized gain on foreign exchange P P 15,382,837 1,617,461 164,294 13,601,082 P

2011 14,172,464 7,744,522 6,427,942

32

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

22. Retirement Plan

The Company has a funded, non-contributory retirement plan, administered by a common retirement trustee, covering its employees on regular status. Retirement benefits are provided for under the Collective Bargaining Agreement (CBA). Pertinent provision of the Agreement provides for, the payment of gratuity benefits based on the longevity of service to resigned employees. However, under Section 4, Article X of the agreement, the Company at its option, may retire any employee or worker who had rendered at least 20 years of service or had reached the age of 60 years on his birthday by paying him full benefits provided in Section 1 of the same Article. The Company set up a fund to fully cover the estimated liability for retirement benefits. As a result, the Company maintains a separate bank account exclusively for the purpose of the plan. All officers and regular employees are allowed to borrow from the retirement fund. The Treasurer of the Company oversees the management of the said retirement fund. Net benefit expenses recognized in the statements of comprehensive income are as follows:

2012 Current service cost Interest cost Expected return on plan assets Net actuarial (gain) loss recognized P 6,928,908 9,790,837 (2,527,863) 3,994,623 18,186,505 P

2011 7,060,141 10,355,097 (3,275,325) 14,139,913 P

2010 5,886,296 10,353,668 (3,197,610) 13,042,354

The amounts recognized in the companys statements of financial position as retirement asset are as follows:

2012 Fair value of plan asset Present value of obligation Funded obligation Unrecognized actuarial losses Asset to be recognized P 161,822,571 144,477,574 (17,344,997) (57,549,670) (74,894,667) P

2011 126,393,168 119,400,452 (6,992,716) (64,569,412) (71,562,128)

Changes in the present value of defined benefit obligations are as follows:

2012 At January 1 Current service cost Interest cost Benefits paid Actuarial loss P 119,400,452 6,928,908 9,790,837 (26,000,960) 34,358,337 144,477,574 P

2011 126,281,672 7,060,141 10,355,097 (24,296,458) 119,400,452

33

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Changes in the fair value of plan assets are as follows:

2012 At January 1 Expected return on plan assets Contributions Benefits paid Actuarial gain (loss) P 126,393,168 2,527,863 21,519,044 (26,000,960) 37,383,456 161,822,571 P

2011 163,766,274 3,275,325 21,629,335 (24,296,458) (37,981,308) 126,393,168

Unrecognized actuarial (gain) losses are as follows:

2012 Unrecognized actuarial losses, beginning Limit of corridor Actuarial loss outside corridor Average expected future service Actuarial loss recognized Actuarial loss - obligation Actuarial loss (gain) - plan assets Unrecognized actuarial losses, ending P 64,569,412 12,639,317 51,930,095 13 3,994,623 34,358,337 (37,383,456) 57,549,670 P

2011 26,588,104 12,628,167 13,959,937 5 37,981,308 64,569,412

The Company has no retirement contribution for the year ended December 31, 2012. The Company does not expect to contribute to the plan in 2013. The latest actuarial valuation report of the plan is as of December 31, 2012. As of the beginning of the year, the principal actuarial assumptions used to determine retirement benefit obligations are:

2012 Discount rate Expected rate of return on plan assets Salary increase rate 5.60% 2.00% 3.00%

2011 8.20% 2.00% 3.00%

23. Earnings Per Share

Basic earnings per share are computed as follows:

2012 Net income Divide by: weighted average number of outstanding shares P 161,225,415 3,020,960,250 P 0.05 P

2011 190,904,421 3,020,960,250 P 0.06 P

2010 183,632,452 3,020,960,250 P 0.06

There were no potential dilutive shares as of December 31, 2012 and 2011.

34

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

24. Commitments
Operating lease commitments Company as lessee The Company leases properties for the Companys branch office space. The operating lease agreements are renewable every year under certain terms and conditions. Total rental expense amounted to P17.1 million and P17.2 million in 2012 and 2011, respectively. Future minimum rentals payable under non-cancellable operating leases as of December 31 are as follows:

2012 Within one year More than one year up to five years P P 12,690,427 10,173,173 22,863,600 P P

2011 11,324,109 8,875,635 20,199,744

Operating lease commitment Company as lessor The Company has entered into operating lease agreement covering a building owned located in Caloocan City. The leases typically run from 1 year to 5 years, with the option to renew the lease after that date. Rental income from leased properties which are included in Other income account in the statements of income amounted to P1.8 million and P1.6 million for the years ended December 31, 2012 and 2011, respectively. Future minimum rental receivables under non-cancellable operating leases as of December 31 are as follows:

2012 Within one year More than one year up to five years P P 1,253,747 668,380 1,922,127 P P

2011 1,109,921 78,056 1,187,977

25. Financial Risk Management

Overview The Company has exposure to the following risks from its use of financial instruments: Credit risk Liquidity risk Market risk

This note presents information about the Companys exposure to each of the above risks, the Companys objectives, policies and processes for the measuring and managing risk, and the Companys management of capital. Further quantitative disclosures are included throughout these financial statements. Credit Risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companys receivables from customers and other financial instruments. Trade and other receivables The Companys exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Companys customer base, including the default risk of the industry in which the customers operate, has less of an influence on credit risk. Approximately .001 percent of the Companys revenue is attributable to sales transactions with a single customer. However, geographically there is no concentration of credit risk.

35

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

The Credit Committee has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Companys standard payment and conditions are offered. The Companys review includes external ratings, where available, and in some cases bank references. Credit limits are established for each customer, which represents the maximum open amount without requiring approval from the Credit Committee; these limits are reviewed quarterly. Customers that fail to meet the Companys benchmark creditworthiness may transact with the Company only on a prepayment basis. More than 30 percent of the Companys customers have been transacting with the Company for over 20 years, and losses have occurred infrequently. In monitoring customer credit risk, customers are group according to their credit characteristics, including whether they are an individual or legal entity, industry, aging profile, maturity and existence of previous financial difficulties. Trade and other receivables relate mainly to the Companys valued clients. Customers that are graded as high risk are placed on a restricted customer list, and future sales are made on a prepayment basis. The Company establishes an allowance for credit losses that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are specific loss component that relates to individually significant exposures. The allowance is determined based on historical data or aging of accounts. The maximum exposure of the Company to credit risk as of December 31, 2012 and 2011 is as follows:

2012 Cash in banks Receivables Trade Others Rental and other deposits Available for sale investments P 61,359,836 1,768,538,523 117,969,129 5,235,925 5,867,604 1,958,971,017 P

2011 20,459,874 1,845,945,924 113,149,728 5,989,484 5,764,040 1,991,309,050

Credit quality of financial assets The following tables summarize the credit quality of the Companys financial assets as of December 31.
2012 Neither past due nor impaired Standard Substandard High grade Cash in banks Receivables Trade Nontrade Rental and other deposits Available for sale investments P 61,360 1,058,728 117,969 5,236 5,868 P 1,249,161 P P grade grade

Past due but not impaired P Total 61,360 1,768,539 117,969 5,236 5,868 1,958,972

(amounts in thousands) P P 51,276 51,276

658,535 658,535 P

36

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

2011 Neither past due nor impaired Standard Substandard High grade Cash in banks Receivables Trade Nontrade Rental and other deposits Available for sale investments P 20,460 823,962 113,150 5,989 5,764 969,325 P grade grade (amounts in thousands) P P 47,242 47,242

Past due but not impaired P Total 20,460 1,845,946 113,150 5,989 5,764 1,991,309

974,742 974,742 P

High grade accounts, other than cash are accounts considered to be of high value. The counterparties have a very remote likelihood of default and have consistently exhibited good paying habits. Standard grade accounts are active accounts with propensity of deteriorating to mid-range age buckets. These accounts are typically not impaired as the counterparties generally respond to credit actions and update their payments accordingly. Substandard grade accounts are accounts which have probability of impairment based on historical trend. These accounts show propensity to default in payment despite regular follow up actions and extended payment terms. Financial assets that are past due but not impaired The tables below summarize the aging analysis of past due but not impaired financial assets as of December 31, 2012 and 2011.

2012 2011 (amounts in thousands) Less than 30 days 31-60 days 61-90 days 91 days - 1 year Over 1 year P 395,904 74,956 53,520 53,591 80,564 658,535 P 647,707 96,577 85,366 76,092 69,000 974,742

Liquidity Risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Companys approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companys reputation. The Company focuses on its cash sales transactions, which assists it in monitoring cash flow requirements and optimizing its cash returns on investments, specifically on modern machineries. Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30days, including the servicing of financial obligation; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the lines of credit with certain local bank. The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The key measure used by the Company for managing liquidity risk is the net liquidity gaps between assets and liabilities as to maturity. The details of the reported net liquidity gaps at the reporting date shown below:

37

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Less than 1 month Financial assets Cash Receivables Trade Others Rental and other deposits Available for sale investments

1 to 3

2012 3 months

Over 1 year Total

months to 1 year (amounts in thousands) P 486,566 P 486,566 P P 522,137 522,137 P P

61,360 572,162 117,969 5,236 5,868

187,674 187,674

61,360 1,768,539 117,969 5,236 5,868

P 762,595 Financial liabilities Trade payable Accrued expenses Trust receipts payable Loans payable Net Liquidity Surplus (Gap)

1,958,972

856,211 93,709 949,920 P (187,325)

225,000 225,000 261,566

1,020,340 389,728 110,000 1,520,068 (997,931)

550,000 550,000 (362,326) P

2,101,551 93,709 389,728 660,000 3,244,988 (1,286,016)

Less than 1 month Financial assets Cash Receivables Trade Others Rental and other deposits Available for sale investments

1 to 3

2011 3 months

Over 1 year Total

months to 1 year (amounts in thousands) P 184,561 184,561 P 248,999 248,999 P

20,460 496,540 113,150 5,989 5,764 641,903

915,846 915,846

20,460 1,845,946 113,150 5,989 5,764 1,991,309

Financial liabilities Trade payable Accrued expenses Trust receipts payable Loans payable Net Liquidity Surplus (Gap)

718,457 89,956 808,413 P (166,510) P

207,401 207,401 (22,840)

1,098,594 211,874 180,000 1,490,468 P (1,241,469) P

570,000 570,000 345,846 P

2,024,452 89,956 211,874 750,000 3,076,282 (1,084,973)

The tables above summarize the maturity profile of the companys financial assets and liabilities as of December 31, 2012 and 2011, based on undiscounted cash flows, including interest due. Market Risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

38

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Foreign exchange risk Foreign exchange risk arises on financial instruments that are denominated in a foreign currency other than the functional currency in which they are measured. The following table demonstrates the sensitivity to a reasonably possible change in the US dollar rate, with all variables held constant, of the Companys profit before tax (due to change in the fair value of monetary asset) and the Companys equity.
Increase/Decrease in US$ 2012 +1 -1 2011 +1 -1 Effect on income before income tax P 34,011 (35,915) 110,669 (116,867)

Effect on equity P 23,807 (25,141) 77,469 (81,807)

Interest rate risk Interest rate risk arises on interest-bearing financial instruments recognized in the statement of financial position. The Companys exposure to market risk for changes in interest rates relates primarily to the Companys short-term and long-term debt obligations. The Companys policy is to manage its interest cost using a mix of fixed and variable rate debt. The following table demonstrates the sensitivity to the Companys profit before tax and equity to a reasonably possible change in interest rates on December 31, 2011, with all variable held constant.
Increase/Decrease in basis points 2012 +100 - 100 2011 +100 - 100 Effect on income before income tax P (14,256,849) 14,256,849 (28,386,166) 28,386,166 P

Effect on equity (9,979,794) 9,979,794 (19,870,316) 19,870,316

The terms and maturity profile of the interest-bearing financial assets and liabilities that are exposed to interest rate risks, together with the corresponding nominal amounts and carrying values, are shown below:
Interest terms (p.a.) Cash Short-term debt Fixed at the date of investment Variable ranging from 5.25% to 5.30% Variable ranging from 11% to 14% Rate fixing period Various Monthly 2012 Nominal amount less than 1 year P 1 to 5 years P Carrying value 61,359,836 389,727,984

P 61,359,836 P 62,291,999 389,727,984 389,727,984

Long-term debt

Quarterly

660,000,000

110,000,000

550,000,000

660,000,000

39

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Interest terms (p.a.) Cash Short-term debt Fixed at the date of investment Variable ranging from 5.25% to 5.30% Variable ranging from 11% to 14%

Rate fixing period Various Monthly

2011 Nominal amount

less than 1 year P

1 to 5 years P

Carrying value 20,459,874 211,873,635

P 20,459,874 P 20,459,874 211,873,635 211,873,635

Long-term debt

Quarterly

750,000,000

180,000,000

570,000,000

750,000,000

Capital management The primary objective of the Companys capital management policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors both the return on equity, which defines as total shareholders equity, and the level of dividends to ordinary shareholders. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders or issue new shares. No changes were made in the objective, policies or processes for the years ended December 31, 2012 and 2011. The Company monitors capital using the gearing ratio of debt to equity and net debt to equity. Debt consists of bills payable and long-term debt. Net debt includes bills payable and long-term debt less cash. The Company considers as capital the equity attributable to equity holders of the Company.

2012 Trust receipts payable Long-term debt Total debt Less: Cash Net debt Equity Debt to equity Net debt to equity P 389,727,984 660,000,000 1,049,727,984 71,192,632 978,535,352 3,277,817,591 32% 30% P

2011 211,873,635 750,000,000 961,873,635 33,654,965 928,218,670 3,267,355,774 29% 28%

26. Financial Assets and Liabilities

Set out below is a comparison by category of carrying amounts and fair values of all of the Companys financial instruments that are carried in the financial statements.

40

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

2012 Carrying amount Financial assets Cash Trade and other receivables Trade through Others profit or loss Available-for-sale investments Rental and other deposits P 71,192,632 1,768,538,523 117,969,129 5,867,604 5,235,925 P Financial liabilities Trade payable Accrued expenses Trust receipts payable Loans payable 1,968,803,813 P P Fair value 71,192,632 1,768,538,523 117,969,129 5,867,604 5,235,925 1,968,803,813

2011 Carrying amount P 33,654,965 1,845,945,924 113,149,728 5,764,040 5,989,483 P 2,004,504,140 P Fair value 33,654,965 1,845,945,924 113,149,728 5,764,040 5,989,483 P 2,004,504,140

2,101,550,717 93,709,090 389,727,984 660,000,000 3,244,987,791

2,101,550,717 93,709,090 389,727,984 660,000,000 3,244,987,791

P 2,024,451,747 89,955,928 211,873,635 750,000,000 P 3,076,281,310

P 2,024,451,747 89,955,928 211,873,635 750,000,000 P 3,076,281,310

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate such value: Short-term financial instruments Due to the short-term nature of the transactions, the carrying value of cash, trade and other receivables, advances and deposits, trade payable, bills payable and accrued expenses approximate their fair values. Available-for-sale financial assets The fair values of publicly traded instruments and similar investments are based on quoted bid prices. The Companys available-for-sale financial assets represent PLDT stocks held under the Investees Subscribers Investment Plan, MERALCO shares and corporate proprietary shares. Long-term debt The fair value of the long-term debt approximates its carrying value due to the quarterly repricing of the instrument. Fair Value Hierarchy The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Quoted prices in active markets for identical assets or liabilities (level 1); Those involving inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level2); and Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). As of December 31, 2012 and 2011, the Companys financial instruments carried at fair values pertain to quoted equity securities amounting to P5.9 million and P5.8 million, respectively, which have been determined by reference to the price of the most recent transaction at the close of the end of reporting period (Level 1). There were no financial instruments carried at fair values measured under level 2 and level 3. In 2012 and 2011, there were no transfers between level 1 and level 2 fair value measurements and no transfers into and out of level 3 fair value measurement.

41

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

27. Related Party Transactions

Related party relationship exists when one party has the ability to control, directly, or indirectly through one or more intermediaries, the other party or exercise significant influence over the other party in making financial and operating decisions. Such relationship also exists between and/or among entities which are under common control with the reporting enterprise, or between, and/or among the reporting enterprise and its key management personnel, directors, or its stockholders. In considering each possible related party relationship, attention is directed to the substance of the relationship, and not merely the legal form. Transactions between related parties are based on terms similar to those offered to non-related parties. Under the Company policy, shareholders are prohibited to obtain loans and advances from/to the Company. In the ordinary course of business, the Company has transaction with the following affiliates under common control as follow:
Nature of Related Party Affiliates under common control Philtrust Bank (Philippine Trust Company) Savings and current deposits Operating lease P38.48 Million Earn interest at the prevailing bank deposit rates; unimpaired; and unrestricted as to withdrawals Lease term is for one (1) year period and renewable annually upon mutual agreement of the parties Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Lease term is for one (1) year period and renewable annually upon mutual agreement of the parties Transactions 2012 Amount/ Volume Terms and Conditions

1.98 Million

Advertising services

11.8 Million

Philtrust Realty Corporation

Advertising services

7.87 Million

Euro-Med Laboratories Phil, Inc.

Advertising services

10.66 Million

Manila Hotel

Advertising services

25.19 Million

Centro Escolar University

Advertising services

8.17 Million

US Automotive Co. Inc.

Operating lease

0.98 Million

42

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Nature of Related Party Affiliates under common control Philtrust Bank (Philippine Trust Company) Savings and current deposits Operating lease Transactions

2011 Amount/ Volume Terms and Conditions

P8.8 Million

Earn interest at the prevailing bank deposit rates; unimpaired; and unrestricted as to withdrawals Lease term is for one (1) year period and renewable annually upon mutual agreement of the parties Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term Advertising rates charged are the same as charged to regular customers; Unsecured; and with a 30-day credit term

1.9 Million

Advertising services

14.5 Million

Euro-Med Laboratories Phil, Inc.

Advertising services

10.3 Million

Manila Hotel

Advertising services

23.5 Million

Centro Escolar University

Advertising services

19.1 Million

Compensation of Key Management Personnel The compensation of the Companys directors is stipulated in the By Laws of the Company which is 3% of the yearly net profits before payment of income tax is distributed among them in proportion to the number of regular special meetings of the BOD actually attended by each. The Company does not enter into an employment/management contract with any of its executive officers. The Company maintains retirement plan for all regular officers and employees. Retirement computations are the same both for executives and rank and file employees. There are no outstanding warrants or options held by directors and officers. The compensation of the Companys key management personnel by benefit type follows:

2012 Short-term benefits Post employment benefits P P

The short-term benefits are as follows:

2011 P P 98,488,245 58,473,368 156,961,613

103,190,443 58,034,840 161,225,283

2012 Salaries Bonus Directors' fee P 52,070,131 46,883,784 4,236,528 56,306,659 P

2011 54,853,107 39,439,266 4,195,872 98,488,245

There are no advances made to/from related party which are interest-bearing or non-interest-bearing.

43

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Transactions with retirement plans Under PFRS, certain post-employee benefit plans are considered related parties. The Companys retirement plan is maintained in a separate bank account which is being administered by the Companys treasurer. The fund consists of cash and cash equivalents amounting to P161,822,571 and P126,393,168 as of December 31, 2012 and 2011, respectively.

28. Contingencies
As of December 31, 2012, the Company has no contingencies since the Company is neither a plaintiff nor a defendant in any legal actions in or out of court.

29. Additional Disclosure Requirements of SRC Rule 68

Under the following disclosure requirements by SRC Rule 68, the Company has neither an existing plan nor a transaction involving the following: a) Preferred shares. b) Profit sharing and other similar plans. c) Capital stock optioned, sold or offered for sale to directors, officers and key employees. d) Warrants or rights outstanding. e) Defaults

30. Other Matters

Certain reclassifications have been made to the prior years financial statements to enhance comparability with the current years financial statements. As a result, certain line items have been amended on the face of the statement of financial position, statement of comprehensive income, statement of changes in equity and statement cash flow, and the related notes to the financial statements. Comparative figures have been adjusted to conform with the current years presentation.

31. Supplementary Information Required Under Revenue Regulation No. 19-2011 and 15-2010
Supplementary Information Required Under RR No. 19-2011 On December 31, 2011, the BIR issued RR No. 19-2011 which prescribes the new annual income tax forms that will be used for filing effective taxable year 2012.

Revenues Net sales (see Note 21) Cost of goods sold and manufactured Newsprint, ink and press supplies Depreciation of machinery and equipment Other taxable income Other operating revenue (Note 20) Rental income Miscellaneous Operating expenses

P 3,005,893,647 63,909,466 1,717,298,773 1,781,208,239 148,724,956 1,846,094 5,928 150,576,978 P 1,152,187,208 223,075,178

44

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

Details of operating expenses are as follows:

2012 Salaries and employee benefits Freight and handling charges Advertising and promotions Communication, light and water Security and janitorial Interest expense Features purchased and news services Repairs and maintenance Depreciation expense Transportation and travel Rent expense Gas and oil Taxes and licenses Stationery and office supplies Insurance SSS and Pag-ibig premiums Entertainment and representation Commission Membership dues and subscriptions Charitable contributions Documentary stamps Professional fees Others P 415,082,005 157,021,653 106,451,531 98,070,371 75,796,671 54,049,777 46,483,341 39,416,897 31,282,630 25,572,968 17,144,101 15,378,661 14,198,504 12,699,452 11,300,659 8,342,159 7,138,158 5,033,712 1,978,788 1,606,089 881,845 592,582 6,664,654 1,152,187,208

Supplementary Information Required Under RR No. 15-2010 On November 25, 2010, the Bureau of Internal Revenue (BIR) issued Revenue Regulation (RR) No. 15-2010 which took effect on December 29, 2010 which provides for additional information required to be disclosed in the notes to financial statements regarding taxes, duties and license fee, paid or accrued, during the taxable year. Specifically, the disclosure should include the following: (a) amount of Value-Added Tax (VAT) output taxes declared during the year with account title and amount/s; (b) amount of VAT Input taxes claimed; (c) landed cost of imports and the amount of customs duties and tariff fees; (d) amount of excise taxes, classified per major product category; (e) documentary stamp tax (DST) on loan instruments and other transactions; (f) all other taxes, local and national, license and permit fees lodged under taxes and licenses account both under the Cost of sales and operating expense accounts; (g) amount of withholding taxes;(h) periods covered and amounts of deficiency assessments; and (i) tax cases and amounts involved. In compliance with RR No. 15-2010, the following taxes are either paid or accrued by the Company for the taxable year ended December 31, 2012.

45

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

1. The following table shows the Companys Sales and VAT output declared as of December 31, 2012 and 2011:

2012 Tax Base Taxable sales Sales of goods and services Zero-rated sales Output VAT Tax Base

2011 Output VAT

P 1,038,187,562 P P 1,038,187,562 P

124,582,507 P 1,147,198,444 P 172,234,077 124,582,507 P 1,319,432,521 P

137,663,813 137,663,813

2. Input VAT The movements of input VAT are summarized as follows:

2012 Balance at beginning of year Domestic purchases Goods for resale/manufactured Applied against output VAT Balance at end of year
3. Landed Cost, Customs Duties and Tariff Fees

2011 P 116,886,585 P 116,886,585

116,886,585 75,510,748 (63,022,346) 129,374,987

2012 Landed costs Custom duties Others P 521,201,358 64,521,358 17,546,258 603,268,974 P

2011 520,458,248 52,682,980 27,433,413 600,574,641

P
4. Excise Tax

The Company did not have any transactions in 2012 and 2011 which are subject to excise tax. 5. Documentary Stamp Tax Documentary stamp tax paid in 2012 and 2011 amounted to P881,845 and P1,250,231, respectively, arising from applications for certain interest-bearing loans and borrowings.

46

MANILA BULLETIN PUBLISHING CORPORATION

Notes to Financial Statements - December 31, 2012

6. Taxes and Licenses The details of taxes and licenses are shown as part of expenses follows:

2012 Real estate taxes Licenses and permits Others P 8,987,350 2,421,166 2,789,987 14,198,503 P

2011 10,577,461 2,646,418 2,927,556 16,151,435

7. Withholding Taxes

2012 Withholding tax on compensation and benefits Expanded withholding tax Final withholding tax P 68,156,248 10,564,852 980,415 79,701,515 P

2011 67,308,183 11,684,928 989,621 79,982,732

8. Tax Assessment and Case There are no tax cases, under preliminary investigation, litigation and/or prosecution in courts or other government regulatory bodies.

47

MANILA BULLETIN PUBLISHING CORPORATION Philippine Financial Reporting Standards (PFRSs) and Interpretations Effective as of December 31, 2012
PFRSs AND INTERPRETATIONS Effective as of December 31, 2012 Framework for the Preparation and Presentation of Financial Statements Conceptual Framework Phase A: Objectives and quantitative characteristics PFRSs Practice Statement Management Commentary First-time Adoption of Philippine Financial Reporting PFRS 1 Standards (Revised) Amendments to PFRS 1 and PAS 27: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to PFRS 1: Additional Exemptions for First-time Adopters Amendments to PFRS 1: Government Loans Share-based Payment PFRS 2 Amendments to PFRS 2: Vesting Conditions and Cancellations Amendments to PFRS 2: Group Cash-settled Sharebased Payment Transactions PFRS 3 Business Combinations (Revised) Insurance Contracts PFRS 4 Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts Non-current Assets Held for Sale and Discontinued PFRS 5 Operations Exploration for and Evaluation of Mineral Resources PFRS 6 Financial Instruments: Disclosures PFRS 7 Amendments to PFRS 7: Transition Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets - Effective Date and Transition Amendments to PFRS 7: Improving Disclosure about Financial Instruments Amendments to PFRS 7: Disclosures - Transfer of Financial Assets Amendments to PFRS 7: Disclosures - Offsetting Financial Assets and Financial Liabilities Amendments to PFRS 7: Mandatory Effective Date of PFRS 9 and Transition Disclosures Operating Segments PFRS 8 Financial Instruments PFRS 9 Amendments to PFRS 9: Mandatory Effective Date of PFRS 9 and Transition Disclosures Consolidated Financial Statements PFRS 10 Joint Arrangements PFRS 11 Disclosure of Interest in Other Entities PFRS 12 Fair Value Measurement PFRS 13 Adopted Not Adopted Not Applicable

P P P P P P P P P P P P P P P P P P P P P P P P P P

PFRSs AND INTERPRETATIONS Effective as of December 31, 2012 Philippine Accounting Standards Presentation of Financial Statements PAS 1 (Revised) Amendments to PAS 1: Capital Disclosures Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Amendment to PAS 1: Presentation of Items of Other Comprehensive Income PAS 2 Inventories PAS 7 Statements of Cash Flows PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors PAS 10 Events After the Balance Sheet Date PAS 11 Construction Contracts PAS 12 Income Taxes Amendment to PAS 12 - Deferred Tax: Recovery of Assets PAS 16 Property, Plant and Equipment PAS 17 Leases PAS 18 Revenue PAS 19 Employee Benefits Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures PAS 19 Employee Benefits (Amended) PAS 20 Accounting for Government Grants and Disclosures of Government Assistance PAS 21 The Effect of Changes in Foreign Exchange Rates Amendment: Net Investment in a Foreign Operation PAS 23 Borrowing Cost (Revised) PAS 24 Related Party Disclosures (Revised) PAS 26 Accounting and Reporting by Retirement Benefit Plans PAS 27 Separate Financial Statements (Amended) PAS 28 Investments in Associates and Joint Ventures (Amended) PAS 29 Financial Reporting in Hyperinflationary Economies PAS 31 Interests in Joint Ventures PAS 32 Financial Instruments: Disclosure and Presentation Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation Amendment to PAS 32: Classification of Rights Issues Amendments to PAS 32: Offsetting Financial Assets and Financial Liabilities PAS 33 Earnings per Share PAS 34 Interim Financial Reporting PAS 36 Impairment of Assets PAS 37 Provisions, Contingent Liabilities and Contingent Assets PAS 38 Intangible Assets PAS 39 Financial Instruments: Recognition and Measurement Amendments to PAS 39: Cash Flow Hedge Accounting of Forecast Intragroup Transactions Amendments to PAS 39: The Fair Value Option

Adopted

Not Adopted

Not Applicable

P P P

P P P P P P P P P

P P

P P P P P P P P P P P P P P P P P P P P P

P P

PFRSs AND INTERPRETATIONS Effective as of December 31, 2012 Amendments to PAS 39 and PFRS 4: Financial Guarantee Contracts Amendments to PAS 39 and PFRS 7: Reclassification of Financial Assets Amendments to PAS 39 and PFRS 7: Reclassification of Finacial Assets - Effective Date and Transistion Amendments to Philippine Interpretation IFRIC - 9 and PAS 39: Embedded Derivatives Amendments to PAS 39: Eligible Hedged Items PAS 40 Investment Property PAS 41 Agriculture Philippine Interpretations IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities IFRIC 2 Members' Share in Co-operative Entities and Similar Intsruments IFRIC 4 Determining Whether an Arrangement Contains a Lease IFRIC 5 Rights to Interest Arising from Decommissioning , Restoration and Environmental Rehabilitation Funds IFRIC 6 Liabilities arising from Participating in a Specific MarketWaste Electrical and Electronic Equipment IFRIC 7 Applying the Restatement Approach under PAS 29 Financial Reporting under Hyperinflationary Economies IFRIC 8 Scope of IFRS 2 IFRIC 9 Reassessment of Embedded Derivatives Amendments to Philippine Interpretation IFRIC - 9 and PAS 39: Embedded Derivatives IFRIC 10 Interim Financial Reporting and Impairment IFRIC 11 PFRS 2 - Group and Treasury Shares Transactions IFRIC 12 Service Concession Arrangements IFRIC 13 Customer Loyalty Programmes The Limit on a Defined Benefit Asset, Minimum Funding IFRIC 14 Amendments to Philippine Interpretations IFRIC-14, Prepayments of a Minimum Funding requiremnt. IFRIC 16 Hedges of a Net Investment in a Foreign Operations IFRIC 17 Distributions of Non-Cas Assets to Owners IFRIC 18 Transfer of Assets to Customers IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine SIC-7 Introduction of the Euro SIC-10 Government Assistance - No Specific Relation to Operating Activities SIC-12 Consolidation - Special Purpose Entities Amendment to SIC - 12: Scope of SIC 12 SIC-13 Jointly Controlled Entities - Non-Monetary Contributions by Ventures SIC-15 Operating Leases - Incentives SIC-21 Income Taxes - Recovery of Revalued Non-Depreciable Assets SIC-25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders SIC-27 Evaluating the Substance of Transactions involving the Legal form of a Lease PAS 39

Adopted

Not Adopted

Not Applicable

P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P

PFRSs AND INTERPRETATIONS Effective as of December 31, 2012 SIC-29 SIC-31 SIC-32 Service Concession Arrangements: Disclosures Revenue - Barter Transactions Involving Advertising Services Intangible Assets - website Costs

Adopted

Not Adopted

Not Applicable

P P P

MANILA BULLETIN PUBLISHING CORPORATION

FINANCIAL SOUNDNESS INDICATORS December 31, 2012

2012 CURRENT RATIO DEBT-TO-EQUITY RATIO ASSET-TO-EQUITY RATIO INTEREST RATE COVERAGE RATIO PROFITABILITY RATIO: PROFIT MARGIN RETURN ON ASSETS RETURN ON EQUITY 0.41 0.03 0.05 0.02 1.05 2.05 1.05

2011 0.01 0.99 1.99 0.99

0.40 0.03 0.06

MANILA BULLETIN PUBLISHING CORPORATION

Schedule of relationship between and among the company and its major shareholders December 31, 2012

U.S. AutomotiveCo.,Inc. 54.1796%

USAUTOCO,Inc. 23.3323%

MenziTrustFundInc. 8.2467%

Manila BulletinPublishing Company