QUARTERLY INTERIM REPORT

To Our Shareholders:

Results of Operations

The FPH Group posted a consolidated net income of

₱13.4 billion for the first half of 2012, significantly higher

than the ₱455 million profits for the same period in 2011. The

increase in the bottom line was primarily due to the

recognition of the gain on sale of Meralco shares amounting to

₱6.1 billion and the business combination gain of ₱1.8 billion

related to the Rockwell Land investment. Equity in net

earnings of associates, mainly EDC and FG Hydro, jumped to

₱3.0 billion from share in net losses of ₱1.2 billion last year.

Net income attributable to Parent surged to ₱10.8 billion, as

against the prior year’s loss of ₱402 million. Without the gain

on sale and the gain from business combination, net income

attributable to Parent was still higher at ₱2.9 billion.

In January 2012, First Philippine Utilities Corporation

(FPUC) sold 30 million Meralco shares to Beacon Electric for

a total consideration of ₱8.9 billion and realized a gain of ₱3.3

billion. On May 11, 2012, the Rockwell Land shares were

listed by way of introduction in the Philippine Stock Exchange

(PSE) at an initial price of ₱1.46 per share. In June 2012, FPH

received 1.4 billion shares of Rockwell Land valued at ₱2.8

billion from Beacon Electric pursuant to the Investment and

Cooperation Agreement dated March 12, 2009 (as

subsequently amended on November 20, 2009 and March 1,

2010). This was recognized as an additional gain relating to

the previous sale of Meralco shares. Additionally, FPH

acquired 52.8 million shares from Beacon Electric for a total

consideration of ₱106.1 million. As of June 30, 2012, the

Group owned 75.6% of Rockwell Land. Under Philippine

Accounting Standards, such events necessitated the

revaluation of the book value of FPH’s existing equity

interest in Rockwell Land to its fair value resulting in a non-

cash gain of ₱1.8 billion.

On July 27, 2012, FPH acquired 681.6 million shares of

Rockwell Land for a total consideration of ₱1.4 billion from

San Miguel Corporation (SMC) via a special block sale at the

PSE. The shares were received as property dividends by SMC

from Meralco. As a result, the company’s ownership in

Rockwell Land increased to 86.8%.

First Gen reported a net income attributable to Parent of

₱4.0 billion (US$92.8 million) for the first semester of 2012,

up from the ₱698 million (US$16.0 million) in net losses last

year. The turnaround in net results was brought about by

First Philippine Holdings Corporation

JUNE 30, 2012

ASSETS 2012 2011 Increase

(As restated) (Decrease)

Current Assets

Cash and cash equivalents ₱25,968 ₱22,487 ₱3,481

Short-term investments 99 6,476 (6,377)

Trade and other receivables 14,654 8,639 6,015

Inventories 11,836 4,222 7,614

Other current assets 3,381 2,484 897

55,938 44,308 11,630

Asset classified as held for sale – 157 (157)

Total Current Assets 55,938 44,465 11,473

Noncurrent Assets

Investments and deposits in associates 55,239 58,929 (3,690)

Investment in equity securities 11,606 20,516 (8,910)

Property, plant and equipment 30,524 32,056 (1,532)

Investment properties 10,485 1,349 9,136

Goodwill and intangible assets 574 612 (38)

Retirement benefit asset 940 890 50

Deferred tax assets 719 511 208

Other noncurrent assets 7,212 8,431 (1,219)

Total Noncurrent Assets 117,299 123,294 (5,995)

TOTAL ASSETS ₱173,237 ₱167,759 ₱5,478

LIABILITIES AND EQUITY

Current Liabilities

Loans payable ₱3,734 ₱– ₱3,734

Trade payables and other current liabilities 16,574 12,581 3,993

Income tax payable 258 211 47

Current portion of:

Long-term debt 3,501 9,053 (5,552)

Bonds payable 3,082 – 3,082

Total Current Liabilities 27,149 21,845 5,304

Noncurrent Liabilities

Bonds payable - net of current portion – 4,297 (4,297)

Long-term debt - net of current portion 46,816 44,079 2,737

Derivative liabilities 2,538 1,800 738

Deferred tax liabilities 1,604 388 1,216

Retirement benefit liability 123 160 (37)

Other noncurrent liabilities 603 1,433 (830)

Total Noncurrent Liabilities 51,684 52,157 (473)

Total Liabilities 78,833 74,002 4,831

Equity Attributable to Equity Holders of the Parent

Common stock 6,036 6,014 22

Preferred stock 6,300 6,300 – Subscriptions receivable (4) (4) – Capital in excess of par value 3,881 3,841 40

Parent company preferred shares held by a consolidated subsidiary (2,000) (2,000) – Treasury stock (3,345) (2,105) 1,240

Unrealized fair value gains on investment in equity securities 3,099 6,911 (3,812)

Cumulative translation adjustments (11,542) (15,895) (4,353)

Share in other comprehensive income of associates 2,877 6,117 (3,240)

Equity reserve (2,557) (2,557) – Retained earnings 71,243 59,416 11,827

Equity Attributable to Equity Holders of the Parent 73,988 66,038 7,950

Non-controlling Interests 20,416 27,719 (7,303)

Total Equity 94,404 93,757 647

TOTAL LIABILITIES AND EQUITY ₱173,237 ₱167,759 ₱5,478

FIRST PHILIPPINE HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Position

(Amounts in Millions)

(unaudited)

June 30

higher earnings of EDC and FG Hydro and one-month of full

earnings contribution from the First Gas Group (FGHC, FGP

and First NatGas Power Corporation). On May 30, 2012, First

Gen, through its wholly-owned subsidiary Blue Vulcan

Holdings Corporation, acquired BG Group’s 40% interest in

the First Gas Group for $360 million. First Gen now

beneficially owns 100% of the First Gas Group. EDC

reported higher revenues following the re-pricing of bilateral

power contracts of the Tongonan I and Palinpinon power

plants that became effective mid-2011 and the absence of

impairment provisions on its Northern Negros Geothermal

Plant (NNGP) that was recognized in 2011. The ancillary

services provided to the National Grid Corporation of the

Philippines increased the net earnings of FG Hydro.

First Philippine Industrial Park’s (FPIP) net income

reached ₱922 million this semester from last year’s ₱71

million due to major land sales. FPIP sold a total of 42

hectares during the period compared to 2 hectares last year.

Rockwell Land posted net income of ₱440 million for the

current period, up from ₱394 million a year ago, primarily

driven by the higher construction completion of Edades and

strong demand for The Grove and 205 Santolan, its new

project launched last May 2012.

First Balfour has earned ₱67 million to date, up from

only ₱3 million last year on account of the substantial

contribution from its well drilling subsidiary, ThermaPrime

Well Services, Inc. (ThermaPrime). ThermaPrime generated a

net income of ₱62 million during the current period.

First Philec incurred a net loss of ₱671 million for the

period, a reversal from last year’s net income of ₱83 million

due to market conditions and disputes with joint venture

partners. The arbitration filed by First PV Ventures

Corporation (First PV) and First Philec Nexolon Corporation

(FPNC) against Nexolon Co., Ltd. is currently with the

International Chamber of Commerce. First Philec Solar

Corporation (FPSC) is, likewise, in dispute with SunPower

Philippines Manufacturing, Ltd. (SPML), a joint venture

partner of First Philec in FPSC. SPML is alleging a breach on

the part of FPSC and is purporting to terminate their Wafering

Supply and Sales Agreement dated November 7, 2007. FPSC

denies the allegation and has also pointed out contractual

breaches on the part of SPML. FPSC has contested the

termination. The Supply Agreement is supposed to run until

the middle of 2013.

2012 2011 Increase

(As restated) (Decrease)

REVENUES

Sale of electricity ₱30,179 ₱27,638 ₱2,541

Equity in net earnings (losses) of associates 3,022 (1,155) 4,177

Sale of merchandise 2,851 3,830 (979)

Sale of real estate 2,170 43 2,127

Contracts and services 1,618 1,132 486

Share in project revenue of joint ventures 20 – 20

39,860 31,488 8,372

COSTS AND EXPENSES

Operations and maintenance 24,719 22,249 2,470

General and administrative expenses 2,900 1,876 1,024

Merchandise sold 2,576 3,414 (838)

Contracts and services 1,216 1,033 183

Real estate sold 943 15 928

32,354 28,587 3,767

OTHER INCOME (EXPENSES)

Gain on sale of investment in equity securities 6,084 – 6,084

Gain related to business combination 1,834 – 1,834

Finance costs (2,111) (2,338) (227)

Finance income 586 446 140

Foreign exchange loss (170) (105) 65

Other income 621 458 163

6,844 (1,539) 8,383

INCOME BEFORE INCOME TAX 14,350 1,362 12,988

PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 1,182 1,024 158

Deferred (205) (117) 88

977 907 70

NET INCOME 13,373 455 12,918

Attributable To

Equity holders of the Parent 10,776 (402) 11,178

Non-controlling Interests 2,597 857 1,740

₱13,373 ₱455 ₱12,918

Earnings (Loss) Per Share for Net Income (Loss) Attributable to

the Equity Holders of the Parent

Basic ₱19.677 (₱0.707) ₱20.384

Diluted ₱19.564 (₱0.707) ₱20.271

FIRST PHILIPPINE HOLDINGS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(Amounts in Millions, Except Per Share Data)

(unaudited)

Six-Month Period Ended June 30

FEDERICO R. LOPEZ

Chairman and Chief Executive Officer