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