SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 

 

FORM 6-K

Report of Foreign Private Issuer 

 

Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934

 

 

**For the month of August 2010**
 

 

**Commission File Number 1-03006**

 

 

Philippine Long Distance Telephone Company
(Exact Name of Registrant asSpecified in Its Charter)

 

**Ramon****Cojuangco Building**

**Makati Avenue**

**Makati****City**

**Philippines**

(Address of principal executiveoffices)

 

 

(Indicate by check markwhether the registrant files or will file annual reports under cover Form 20-For Form 40-F.)

 

Form20-F      Ö                                  Form40-F

 

 

(Indicate by check markwhether by furnishing the information contained in this Form, the registrant isalso thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under the Securities Exchange Act of 1934.)

 

Yes                                                        No       Ö

 

 

(If "Yes" ismarked, indicate below the file number assigned to the registrant in connectionwith Rule 12g3-2(b): 82- ________ )
****
 

NOTE REGARDINGFORWARD-LOOKING STATEMENTS

 

Some information in this report may containforward-looking statements within the meaning of Section 27A of the U.S.Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of1934.  We have based these forward-looking statements on our current beliefs,expectations and intentions as to facts, actions and events that will or mayoccur in the future.  Such statements generally are identified byforward-looking words such as “believe,” “plan,” “anticipate,” “continue,” “estimate,”“expect,” “may,” “will” or other similar words.

A forward-looking statement may include astatement of the assumptions or bases underlying the forward-lookingstatement.  We have chosen these assumptions or bases in good faith.  Theseforward-looking statements are subject to risks, uncertainties and assumptions,some of which are beyond our control.  In addition, these forward-lookingstatements reflect our current views with respect to future events and are nota guarantee of future performance.  Actual results may differ materially frominformation contained in the forward-looking statements as a result of a numberof factors, including, without limitation, the risk factors set forth in“Item 3. Key Information – Risk Factors” in our annual report on Form 20-Ffor the fiscal year ended December 31, 2009.  You should also keep in mind thatany forward-looking statement made by us in this report or elsewhere speaksonly as at the date on which we made it.  New risks and uncertainties come upfrom time to time, and it is impossible for us to predict these events or howthey may affect us.  We have no duty to, and do not intend to, update or revisethe statements in this report after the date hereof.  In light of these risksand uncertainties, you should keep in mind that actual results may differmaterially from any forward-looking statement made in this report or elsewhere.

 
 

 

**EXHIBITS**
 

 

 

Exhibit Number

 

Page

 

 

 

 

 

 

1

 

 

 

2

 

Copies of the disclosure letters that we filed today with the Securities and Exchange Commission and the Philippine Stock Exchange regarding the following matters:

 

Press release regarding the Company’s unaudited consolidated financial results for the six (6) months ended June 30, 2010;

 

a.       Mr. Oscar S. Reyes ceased to qualify as an independent director but shall remain to be a member of the Board as a regular director;

 

b.      Amendments to the By-Laws of the Company; and 

 

c.      Cash dividend declaration on the Company’s Common Stock, Series IV Cumulative Non-Convertible Redeemable Preferred Stock and Series B, F, Q, V and Z 10% Cumulative Convertible Preferred Stock.

 

 

 

 

 

 

 

 

 

 

11

 

 

 

19

 

 

 

 

 

 

 

 
Exhibit1

 

 
 

August3, 2010
 

 

Philippine Stock Exchange

3/F Philippine StockExchange Plaza

Ayala Triangle, AyalaAvenue

Makati City

 

Attention:Ms. Janet A. Encarnacion 

Head– Disclosure Dept. 

 

Gentlemen:

 

            Inaccordance with Section 17.1 (b) and Section 17.3 of the Securities RegulationCode, we submit herewith a copy of SEC Form 17-C with a press release attachedthereto regarding the Company’s unaudited consolidated financial results forthe six (6) months ended June 30, 2010.

 

            Thisshall also serve as the disclosure letter for the purpose of complying with PSERevised Disclosure Rules.

 

 

 

Very truly yours,

 

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
 

 

/s/ Ma. Lourdes C. Rausa-Chan

MA. LOURDES C. RAUSA-CHAN
Corporate Secretary

 

 

Page 1 of 11

    
Exhibit1

 

 

 

August3, 2010 
 

 

Securities & ExchangeCommission

SEC Building, EDSA

Mandaluyong City

 

Attention:  Director Justina F. Callangan
                    Corporation Finance Department
 

Gentlemen:

 

            Inaccordance with Section 17.1 (b) of Securities Regulation Code and SRC Rule17.1, we submit herewith two (2) copies of SEC Form 17-C with a press releaseattached thereto regarding the Company’s unaudited consolidated financial resultsfor the six (6) months ended June 30, 2010.

 

 

 

 

Very truly yours,

 

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
 

 

/s/ Ma. Lourdes C. Rausa-Chan

MA. LOURDES C. RAUSA-CHAN
Corporate Secretary

 

 

Page 2 of 11

   

Exhibit1 

COVER SHEET

 
P

W

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5

5

 
 

S.E.C. Registration No.

 

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T

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Y

 

 

 

 

 

 

(Company’s Full Name)

 

R

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(Business Address: No. Street City/Town/Province)

 

MS. JUNE CHERYL A. CABAL 

 

816-8534

Contact Person

 

Company Telephone Number

 

 
 

1

 

2

 

 

3

 

1

 

 

SEC FORM 17-C

 

 

0

 

6

Every 2nd

Tuesday

 

 

 
Month

Day

FORM TYPE

Month

Day

Fiscal Year

 

Annual Meeting

 
 

 
C

F

D

 

N/A

Dept. Requiring this Doc.

 

Amended Articles

Number/Section

 

 

Total Amount of Borrowings

 
2,183,041

As of June 30, 2010

 

N/A

 

 

N/A

 
 
Total No. of Stockholders

 

Domestic

 

Foreign

 

----------------------------------------------------------------------------------------------------------------------------------

To be accomplished by SEC Personnel concerned
 

 

 

 

 

 

 

 

 

 

 

 

______________________________

 
 
File Number

 

LCU

 

 

 

 

 

 

 

 

 

 

 

 

______________________________

 
 
Document I.D.

 

Cashier

 

 

STAMPS
 

Remarks: Please useblack ink for scanning purposes.

Page 3 of 11

  ** **

 

 

 

Exhibit 1

 

SECURITIES AND EXCHANGE COMMISSION

 

 

CURRENT REPORT UNDER SECTION 17

OF THE SECURITIES REGULATION CODE

AND SRC RULE 17.1

 

 

1.                 3 August 2010

Date of Report (Date of earliest event reported)

 

2.                 SEC Identification Number PW-55

 

3.                 BIR Tax Identification No. 000-488-793

 

4.                 PHILIPPINE LONGDISTANCE TELEPHONE COMPANY

Exact name of issuer as specified in its charter

 

5.         PHILIPPINES                                                      6.____________(SEC Use Only)  

Province, country or other jurisdiction                    IndustryClassification Code

of Incorporation

 

7.         Ramon Cojuangco Building, Makati Avenue, Makati City                         1200 

Address of principal office                                                                  PostalCode

 

8.         (632)816-8405 

Issuer's telephone number, includingarea code
 

9.         NotApplicable 

Former name or former address, if changed since lastreport

 

10.             Securities registered pursuant to Sections 8 and 12 ofthe Securities Regulation Code and Sections 4 and 8 of the Revised SecuritiesAct

 

Title of Each Class

Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding

 

________________________________________________________________

________________________________________________________________

________________________________________________________________

 

 

Page 4 of 11

  Exhibit 1

 

**PLDT****pressrelease**

 

**FIRST HALF 2010CONSOLIDATED NET INCOME UP 10% TO P21.7 BILLION**

**CORE NET INCOME UP 2% TO P21.2BILLION**

**EBITDA AT P43.3BILLION;**

**CELLULAR SUBSCRIBER BASEREACHES 45.3 MILLION, UP 18%**

**TOTAL BROADBANDSUBSCRIBERS NEARS 2 MILLION, UP 21%**

**CORE EPS AT P112.39,INTERIM REGULAR DIVIDEND OF P78 PER SHARE DECLARED**

 

•        Consolidatednet income of P21.7 billion for 1H2010, 10% higher than the P19.7billion net income reported in 1H2009 

•        Consolidatedcore net income for 1H2010 at P21.2 billion, an increase of 2% from the P20.8billion recorded in 1H2009  

•        Consolidatedservice revenues declined 1% year-on-year to P72.2 billion. Wirelessservice revenues stable at  P47.9 billion; fixed line service revenuesdown 1% to P25.2 billion; and ePLDT service revenues improve 1% to P5.3billion

•        ConsolidatedEBITDA slightly lower at P43.3 billion; consolidated EBITDA margin at60% of service revenues, similar to the margin last year

•        Cellularsubscriber base reaches 45.3 million; net subscriber additions of 4 million forthe first half,  22% higher year-on-year 

•        Totalbroadband subscribers at 1.96 million, with wireless alone over 1.32 million;aggregate revenue contribution from broadband and internet services of P8.0billion for 1H2010, 21% higher than last year

•        CoreEPS at P112.39;  interim regular dividend of P78 per sharedeclared

 

MANILA, Philippines, 3rdAugust 2010–– Philippine Long Distance Telephone Company (“PLDT”) (PSE: TEL) (NYSE: PHI)today announced its unaudited financial and operating results for the first six(6) months of 2010 with consolidated Reported Net Income increasing by 10% to P21.7billion, from the P19.7 billion recorded in the same period last year.Core Net Income for the first half of 2010, net of exceptional items, rose 2%to P21.2 billion, from P20.8 billion in the same period in 2009.This year’s results reflect higher recurring net income and a net gain fromforeign exchange revaluation of our financial assets and liabilities andderivatives compared to a net loss last year. 

 

Consolidated servicerevenues decreased by 1% to P72.2 billion, as voice revenues grew 3% andbroadband/internet and corporate data revenues rose 21%.  These revenueimprovements were partially offset, however, by a 5% decline in data and ICTrevenues, largely as a result of the 13% decline in cellular data/SMSrevenues.  Approximately 28% of consolidated service revenues remain directlyor indirectly linked to the US Dollar.  Had the peso remained stable, servicerevenues for the first half of 2010 would have stayed at last year’s levels.

 

Consolidated EBITDA waslower at P43.3 billion while EBITDA margin was at 60%, similar to themargin for the same period last year and slightly up over the full year 2009margin of 59%.  

 

Page 5 of 11

  Exhibit 1

 

Consolidated free cashflow remained strong at P19.4 billion for the period while consolidatedcapital expenditures stood at P9.7 billion for the first six months of2010, as the Group continues to work on network modernization andre-architecure. Capex for 2010 is estimated at P28.6 billion.

 

The Group’s consolidateddebt balance as at the end of the first half 2010 stood at US Dollars 2.1billion with net debt at approximately US Dollars 1.5 billion.  Net debt toEBITDA increased to 0.8x. The Company’s debt maturities continue to be wellspread out, with almost 60% due in and after 2013. The percentage of US Dollar-denominateddebt to the Group’s total debt portfolio was at 49%, slightly up from 48% atthe end of 2009. Taking into account our peso borrowings, our hedges and our U.S. Dollar cash holdings, only 23% of total debt remains unhedged.   The Group’scash and short-term securities are invested primarily in bank placements andGovernment securities.

 

Earlier today, theCompany’s Board of Directors declared an interim dividend of P78 pershare, fulfilling the Company’s commitment to pay out a minimum ratio of 70% ofconsolidated core earnings. The cash dividend will be payable to holders ofPLDT common stock as of 19th August 2010, with payment due on 21stSeptember 2010.

 

 “Consistent with ourdividend policy and enabled by our robust cash flow, we are pleased to declarean interim dividend of P78 per share,” stated Manuel V. Pangilinan, PLDTChairman.

 

 
**Wireless:   Surging ahead in Broadband**
 

Wireless service revenueswere stable at P47.9 billion for the first half of 2010, compared withthe same period last year. Excluding the impact of our satellite operationswhere revenues declined due to the disposal of our satellite transponders,wireless service revenues would have been flat year-on-year at P47.3billion.  Cellular subsidiary Smart Communications, Inc. (“Smart”) continues tolead the industry in terms of share of both industry-wide revenues andsubscribers. 

 

Wireless EBITDA wasmarginally lower at P29.7 billion in the first six months of 2010 withEBITDA margin at 62%, similar to that for the full year 2009.  

 

The PLDT Group’s totalcellular subscriber base for the first six (6) months of 2010 grew to 45.3million subscribers, an 18% growth year-on-year. Smart added 4.0 millionsubscribers for the period, compared with 3.3 million in 2009. Smart Buddyrecorded net additions of almost 2.0 million subscribers to end the half-yearwith 26.2 million subscribers while Talk ‘N Text added approximately 958,000subscribers to end the half with 18.0 million subscribers. Red Mobile, thebrand owned by Smart subsidiary, CURE, had about 1.1 million subscribers at theend of June 2010. Red Mobile was relaunched in March 2010 and positioned tomeet market demand for unlimited services, particularly for “second SIM”holders. In order to support the traffic requirements for unlimited voice andtext without degrading the service quality of other subscribers, Smart built asecondary network that caters to unlimited voice service offerings. The RedMobile subscriber base is expected to grow even further.  Beginning July 2010,Red Mobile subscribers can make unlimited calls to all other subscribers in theSmart network.

Page 6 of 11

   

 

Exhibit 1

 

Cellular voice revenuesimproved by 15% to P21.8 billion and now contribute 50% of totalcellular service revenues from 43% for the same period last year. On the otherhand, cellular data/text revenues fell 14% to P20.9 billion, despite a27% increase in text volumes, as they remain under pressure from theproliferation of lower yield offerings, multiple-SIM ownership andregulator-mandated load validity extensions.  

 

On the broadband front,SmartBro, Smart’s wireless broadband service offered through its wholly-ownedsubsidiary Smart Broadband, Inc. (“SBI”) continued to expand as its wirelessbroadband subscriber base grew to 1.3 million at the end of June 2010, close to870,000 of whom were on SmartBro’s prepaid service. Wireless broadband revenuescontinued to grow strongly, up 26% to P3.4 billion, compared with the P2.7billion recorded in the first half of 2009. Wireless broadband revenues nowcomprise 7% of wireless service revenues.

 

“Wireless broadbandcontinues to be a strong engine for growth and viability.  Meanwhile, we havebeen re-architecting to be a truly smart pipe, ready for the next big wave whenmobile broadband devices, applications, multimedia platforms, and the cloudenvironment fuse together explosively down at the mass-market level,” stated Orlando B. Vea, ChiefWireless Adviser of Smart.

 

“We continue to grapplewith the changing dynamics in the industry – the popularity of unlimitedservice offerings, the resurgence of voice and the growing assortment ofalternative means of communication.  We are looking to meet these challengesfrom all angles – whether it be through reconfiguring our networks, retoolingour products and even re-assessing our business models,"added Napoleon L. Nazareno, President and CEO of PLDT and Smart.

 

Smart continues to investin its cellular and multi-platform broadband networks while upgrading itsexisting transmission, core and access facilities. Smart’s 3G and HSPA networksnow cover 50% and 44% of the country’s population, respectively. 

 

PLDTFixed Line:  Holding Steady

 

Fixed line servicerevenues declined slightly by 1% to P25.2 billion in the first half of2010 from P25.4 billion in the same period in 2009  as the 11% increasein data revenues, both from corporate data and residential DSL services, wasoffset by declines in other segments of the business. Despite an increase inthe number of postpaid billed lines, revenues from our local exchange, or LEC,services were lower as a result of LEC voice revenues being re-allocated tobundled voice and data services. National long distance revenues continued  todecrease with the reduction in call volumes, while international long distancerevenues weakened further due to the decrease In the average settlement ratefor inbound calls, as well as the impact of the peso appreciation vis-à-vis theUS Dollar. Data service revenues contributed 46% of the fixed line’s servicerevenues compared with 41% in the same period last year. 

 

The fixed line businesscontinues to pursue initiatives aimed at tapping new markets and generating newand higher ARPUs.  These were enabled by leveraging both the fixed and wirelessnetworks and creating new products for different market segments.

Page 7 of 11

   

Exhibit 1

 

PLDT DSL continued itsstrong performance as broadband subscribers grew close to 50,000 to 609,000 atthe end of June 2010 from 560,000 at the end of 2009.  PLDT DSL generated P4.1billion in revenues in 2010, up 22% from the P3.3 billion in the sameperiod in 2009.  

Fixed line EBITDA marginwas at 50% in the first half of 2010, slightly higher than the full year 2009margin of 49%, but lower compared with 52% in the same period last year.  Thedecline was the result of higher cash operating expenses, mainly relating toprofessional and other contracted services, and maintenance expenses.

 

"Ourgoal for the fixed line business is to sustain its resilient performance by buildingon the continued strength of our corporate data and broadband revenues whilemanaging the downward trend of our national and international tollbusinesses," declared Nazareno.

ePLDT:Positioning for Growth

 

ePLDT, the Group’sinformation and communications technology arm, reported service revenues of P5.3billion in the first half of 2010, an increase of 1% from P5.2 billionin the same period in 2009. ePLDT’s EBITDA increased by 48% to P756million in the first half of 2010 compared with P511 million in the sameperiod in 2009, mainly due to a 1% increase in service revenues and a 4%decrease in  cash operating expenses, largely due to lower headcount andcompensation. EBITDA margin at 14% was higher than the 10% recorded in the sameperiod in 2009 and the 12% margin for the year 2009.  ePLDT’s revenues accountfor 7% of PLDT’s consolidated revenues. 

 

Earlier this year, ePLDTreorganized its businesses to create better focus and maximize scale. ePLDTVentus, which handles customer interaction services (more commonly known as“call center”) and SPi Technologies, Inc., the knowledge processing arm (alsoknown as business process outsourcing or “BPO”) have combined their operationsand will be known as SPi Global Solutions, Inc. while Vitro Data Center andinternet and online gaming operations will remain housed under ePLDT.

 

“With the re-organizationof ePLDT into separate entities as previously announced, we expect theirseparate and stand-alone senior management teams to focus on their core areasfor growth. SPi Global Holdings have set their sights on creating end-to-endBPO solutions for clients through consolidation, thus, accelerating growthacross all three verticals:  call center, healthcare and content solutions,”stated Nazareno.

 

Meralco:Improving Prospects

 

Our first halffinancial results reflect the equity accounting of our share in the earnings ofManila Electric Company(“Meralco”) through PLDTCommunications and Energy Ventures, Inc (“PCEV”), formerly Pilipino TelephoneCorporation. PCEV’s income isderived mainly from its direct equity share in the net income of Meralco and its holdings in Beacon Electric Asset Holdings,Inc. (“Beacon Electric”).  PCEV owns 50% of Beacon Electric, a special purpose companyjointly owned by PCEV and Metro Pacific Investments  Corporation  (“MPIC”)  whose sole  purpose  is  to  hold  shares in Meralco, 

Page 8 of 11

  Exhibit 1

 

which presentlyamount to 392.5 million shares, equivalent to 34.8% of Meralco’s outstandingcommon shares. PCEV’S direct holdings in Meralco consist of 68.8 millionMeralco common shares (approximately 6% interest) retained by PCEV after thetransfer of its 154.2 million shares to Beacon Electric in March 2010. PCEVacquired its original 20% investment in Meralco in July 2009.  

 

Meralco’s consolidatedReported Net Income for the first half of 2010 increased to 4.8 billion, 51% higherthan the 3.2 billion realized forthe same period in 2009. Consolidated Core Net Income, which excludes one-time,exceptional charges, stood at 5.8 billion, which was82% better than the Consolidated Core Net Income in 2009 of 3.2 billion.  Theimprovements reflect the significantly higher volume of energy sold with thesurge in demand from all customer classes, led by the industrial sector. Alsocontributing to this improvement was the higher average distribution rate forthe period.  The rate adjustment in May 2009 was Meralco’s first rateadjustment since 2003. 

 

Meralco’s consolidatedrevenues, in which electricity sales account for approximately 98% of thetotal, increased by 35% to 127.5 billion.Approximately 40% of the total increase in consolidated electricity revenues isaccounted for by the 14% growth in kilowatt-hours sold while 46% is due tohigher average purchased power and transmission pass-through costs.  The firsthalf of 2010 also saw improved average distribution rates.   

 

Total cost and expensesamounted to 120.3 billion in thefirst six months of 2010, 34% higher compared with 89.7 billion for the sameperiod in 2009. Cost of purchased power accounted for 87% of total cost andexpenses in 2010, compared with 85% in 2009.

 

In its meeting held last26th July 2010, Meralco’s board of directors declared an interimcash dividend of 2.50 per common share toall shareholders of record as of 23rd August 2010, payable on 16thSeptember 2010. The interim dividend represents approximately 50% of Meralco’score earnings per share for the period.

 

 

Conclusion

 

“Withfirst half results being encouraging, core profit guidance for 2010 is inexcess of P41.0 billion and capital investments should remain at 28.6 billion. While webelieve that there is still room for growth in the broadband space, we dorecognize that our core markets are maturing.  We are, therefore, looking tomove beyond the verticality of the traditional telco business model as we laythe groundwork for a more “horizontal” perspective via our strategic platformand infrastructure investments,,” concluded Manuel V. Pangilinan, PLDTChairman.

**####**

Page 9 of 11

  ****Exhibit 1

 

****

****

*This press release maycontain some statements which constitute “forward-looking statements” that aresubject to a number of risks and uncertainties that could affect PLDT’sbusiness and results of operations. Although PLDT believes that expectationsreflected in any forward-looking statements are reasonable, it can give noguarantee of future performance, action or events.*

 

 

For further information,please contact:

 

**Anabelle L.Chua                  Melissa V. Vergel de Dios               Ramon R. Isberto**
Tel No: 816-8213                    TelNo: 816-8024                                Tel No: 511-3101

Fax No: 844-9099                   FaxNo: 810-7138                               Fax No: 893-5174

** **

Page 10 of 11

  ****Exhibit 1

** **

** **

**About PLDT**

**PLDT is the leading telecommunications provider inthe Philippines. Through its three principal business groups – fixed line,wireless, and information and communications technology – PLDT offers a widerange of telecommunications services across the Philippines’ most extensivefiber optic backbone and fixed line, cellular and satellite network.**

** **

**PLDT is listed on the Philippine Stock Exchange(PSE:TEL) and its American Depositary Shares are listed on the New York StockExchange (NYSE:PHI).  PLDT has one of the largest market capitalizations amongPhilippine listed companies.**

** **

**Further information can be obtained by visiting theweb at www.pldt.com.ph.**

 

Page 11 of 11

   

Exhibit 2

 

 

 

 

August 3, 2010

 

 

Philippine Stock Exchange

3/F Philippine StockExchange Plaza

Ayala Triangle, AyalaAvenue

Makati City

 

Attention:  Ms. Janet A. Encarnacion

Head,Disclosure Department

 

Gentlemen:

 

In compliance with Section 17.1 (b) and Section 17.3of the Securities Regulation Code, we submit herewith a copy of SEC Form 17-Cwith respect to certain discloseable events/information.    

 

This shall also serve asthe disclosure letter for the purpose of complying with PSE Revised DisclosureRules.

 

 

Respectfully yours,

 

 

/s/ Ma. Lourdes C.Rausa-Chan

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

Page 1 of 19

   
 

Exhibit2

 

 

 

 

August 3, 2010

 

 

SECURITIES &EXCHANGE COMMISSION

CorporationFinance Department 

SEC Building,EDSA

Mandaluyong City

 

Attention:        DirectorJustina F. Callangan

CorporationFinance Department

 

Gentlemen:

 

In accordance with Section 17.1 (b) of the SecuritiesRegulation Code, we submit herewith two (2) copies of SEC Form 17-C withrespect to certain discloseable events/information.        

 

 

Respectfully yours,

 

 

/s/ Ma. Lourdes C.Rausa-Chan

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

Page 2 of 19

    

Exhibit2

 

COVER SHEET

 

 

P

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5

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SEC Registration No.

 

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(Company’s Full Name)

 

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(Business Address: No. Street/City/Town/Province)

 

ATTY. MA. LOURDES C. RAUSA-CHAN

 

816-8405

Contact person

 

Contact Telephone No.

 

 

1

 

2

 

 

3

 

1

 

 

SEC FORM 17-C

 

 

0

 

6

Every 2nd

Tuesday

 

 

Month

 

Day

 

FORM TYPE

 

Month

Day

 

 
Fiscal Year

 

Annual Meeting

 
 

C

F

D

 

N/A

Dept. Requiring this Doc.

 

Amended Articles

Number/Section

 

 

Total Amount of Borrowings

  2,183,041

As of June 30, 2010

 

 

NA

 

 

NA

Total No. of Stockholders

 

Domestic

 

Foreign

--------------------------------------------------------------------------------------------------------------

To be accomplished by SEC Personnelconcerned

 

 
 

 

 

 

 

 

 

 

 

 

 

______________________________

File Number

 

LCU

 
 

 
 

 

 

 

 

 

 

 

 

 

 

______________________________

 
Document I.D.

 

Cashier

 

STAMPS

  

 

 

 

Remarks: Please use blackink for scanning purposes

Page 3 of 19

    

Exhibit 2

 

SECURITIES AND EXCHANGECOMMISSION

 

 

CURRENT REPORT UNDER SECTION 17

OF THE SECURITIES REGULATION CODE

AND SRC RULE 17.1

 

 

 

1.                 August 3, 2010

Date of Report (Date of earliest event reported)

 

2.                 SEC Identification Number PW-55

 

3.                 BIR Tax Identification No. 000-488-793

 

4.                 PHILIPPINE LONGDISTANCE TELEPHONE COMPANY

Exact name of issuer as specified in its charter

 

5.         PHILIPPINES                                                      6.____________(SEC Use Only)  

Province, country or other jurisdiction                    IndustryClassification Code

of Incorporation

 

7.         RamonCojuangco Building, Makati Avenue, Makati City                 1200 

Address of principaloffice                                                            Postal Code

 

8.         (632)816-8405 

Issuer's telephone number, includingarea code
 

9.         NotApplicable 

Former name or former address, if changed since lastreport

 

10.             Securities registered pursuant to Sections 8 and 12 ofthe Securities Regulation Code and Sections 4 and 8 of the Revised SecuritiesAct

 

Title of Each Class

Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding

____________________________________________________________

____________________________________________________________

____________________________________________________________

 

Page 4 of 19

  ** **

Exhibit2

 

11.       Item 9 (Other Events)

 

We disclose that at themeeting of the Board of Directors of Philippine Long Distance Telephone Company(respectively, the “Board” and the “Company”) held on August 3, 2010:

 

1.        The Board confirmed thefinding of the Governance and Nomination Committee that Mr. Oscar S. Reyes hasceased to qualify as an independent director, in view of his appointment asSenior Executive Vice President and Chief Operating Officer of Manila ElectricCompany.  However, Mr. Reyes shall remain to be a member of the Board as aregular director.  With three (3) remaining independent directors in the Board(namely, Rev. Fr. Bienvenido F. Nebres, Mr. Pedro E. Roxas and Mr. Alfred V.Ty), the Company remains compliant with the legal requirement on the minimumnumber of independent directors.

 

2.        The Board, exercisingits own power, and the authority duly delegated to it by the stockholders ofthe Company, to amend the Company’s By-Laws, authorized and approved theamendments to the Company’s By-Laws contained in Annex A attached hereto.

 

        The amendments to the By-Laws shalltake effect upon approval by the Securities and Exchange Commission of theAmended By-Laws.

 

3.     The Board declared the followingcash dividends out of the unaudited unrestricted retained earnings of theCompany as at June 30, 2010, which are sufficient to cover the total amount ofdividends declared:

 

a.     Regulardividend of ₱78.00 per outstandingshare of the Company’s Common Stock, payable on September 21, 2010 to theholders of record on August 19, 2010;

 

b.     ₱12,420,000.00 on all ofthe outstanding shares of the Company’s Series IV Cumulative Non-ConvertibleRedeemable Preferred Stock, for the quarter ending September 15, 2010, payableon September 15, 2010 to the holder of record on August 18, 2010.

 

c.     ₱1.00 per outstanding share of the Company’sSeries B 10% Cumulative Convertible Preferred Stock, for the annual periodending August 31, 2010, payable on September 30, 2010 to the holders of recordon September 2, 2010.

 

d.     ₱1.00 per outstanding share of the Company’sSeries F 10% Cumulative Convertible Preferred Stock, for the annual periodending August 31, 2010, payable on September 30, 2010 to the holders of recordon September 2, 2010.

Page 5 of 19

    

Exhibit 2

 

e.     ₱1.00 per outstanding share of the Company’sSeries Q 10% Cumulative Convertible Preferred Stock, for the annual periodending August 31, 2010, payable on September 30, 2010 to the holders of recordon September 2, 2010.

 

f.       ₱1.00 per outstanding share of the Company’sSeries V 10% Cumulative Convertible Preferred Stock, for the annual periodending August 31, 2010, payable on September 30, 2010 to the holders of recordon September 2, 2010.

 

g.     ₱1.00 per outstanding share of the Company’sSeries Z 10% Cumulative Convertible Preferred Stock, for the annual periodending August 31, 2010, payable on September 30, 2010 to the holders of recordon September 2, 2010.

 

 

Pursuantto the requirements of the Securities Regulation Code, the Company has dulycaused this Report to be signed on its behalf by the undersigned hereunto dulyauthorized.

 

 

PHILIPPINE LONG DISTANCETELEPHONE COMPANY

 

By:

 

 

/s/ Ma. Lourdes C. Rausa-Chan

MA. LOURDES C. RAUSA-CHAN

Corporate Secretary

 

 

August3, 2010

 

Page 6 of 19

  ARTICLE II

ANNEX A

 

  
Exhibit 2

 

  MEETINGS

 

Stockholders’ Meetings

Existing

Amended

 

Section 2

 

•      Calling of special meeting

 

 

 

•      Giving of notice of special meeting

 

 

 

•      Question of service of notice of meeting

 

 

 

by **the President**or three (3) Directors or stockholders representing two-thirds (2/3) of subscribed capital stock

 

Secretary, Assistant Secretary or in case of his absence, inability, refusal or neglect to act, then by the **President**, Directors or stockholders calling said meeting

 

statement of service entered in the **minutes upon being read and approved in the subsequent meeting of stockholders** shall be conclusive on the question of service

 

 

 

by the Chairman of the Board

 

 

 

 

 

 

 

by the Chairman of the Board

 

 

minutes as certified correct by the secretary of the meeting and attested by the chairman of the meeting

 

 

Section 3

 

•      Presiding Officer

 

 

 

**President** or, in his absence, by a chairman to be chosen by the stockholders representing a majority of the shares of the corporation issued and outstanding and entitled to vote present or duly represented at said meeting

 

 

 

Chairman of the Board or, in his absence, the President

 

Board of Directors’ Meeting

Existing

Amended

 

Section 4

 

•      Calling of special meeting

 

•      Giving of notice of special meeting

 

 

 

 

•      Question on service of notice of meeting

 

 

 

by the **President** or any three (3) directors

 

by Secretary or Assistant Secretary, or in case of his absence, inability, refusal or neglect to act, by any person appointed for that purpose by the **President** or three (3) directors

 

Statement of service entered in the **minutes** upon **being read and approved at a subsequent meeting of the Board** shall be conclusive upon question of service

 

 

 

 

by the Chairman of the Board

 

 

 

 

 

 

by the Chairman of the Board

 

minutes as certified correct by the secretary of the meeting and attested by the chairman of the meeting

 

Page 7 of 19

  

 

Exhibit 2

 

  ARTICLE III

QUORUM AND VOTING REQUIREMENTS

 

Stockholders Meetings

Existing

Amended

 

Section 1

 

•      Power to adjourn in the absence of a quorum

 

 

 

 

 

 

**President** or, in his absence, any person entitled to preside or act as secretary of the meeting shall have the power to adjourn until a quorum is present or represented.

 

 

 

Chairman of the Board

 

 

Section 3

 

•      Filing of proxies

 

 

•      Revocation of proxies

 

 

•      Validation of proxies

 

 

 

At least **two (2)** days before the day of the meeting

 

At least **two (2)** days before the day of the meeting

 

No By-Laws provision

 

 

 

at least seven (7) days

 

 

at least three (3) days

 

 

at least five (5) days before the day of the meeting 

 

Shall be done by the Secretary or a special committee of inspectors composed of the Secretary, Assistant Secretary and a representative of the transfer agent

 

 

ARTICLE V

BOARD OF DIRECTORS

 

 

Existing

Amended

 

Section 1

 

•      Number of directors

 

 

 

 

Thirteen (13) members

 

 

 

Thirteen (13) members or such number of members provided in the Articles of Incorporation of the corporation, as amended from time to time

 

Section 2

 

•      Number of Independent Directors

 

 

 

 

•      Definition of Independent Directors

 

 

 

** **

** **

**At least 2** Independent Directors or such Independent Directors shall constitute **at least twenty percent (20%)** of the members of the Board of Directors, **whichever is lesser**

 

Page 8 of 19

   
 Independence criteria enumerated in the By-Laws

 

 

 

Twenty percent (20%) but in no case less than two (2)

 

 

 

 

a person who:

(a)    is independent of management,

(b)    is free from any business or other relationship with the corporation which could, or could reasonably be perceived to, materially interfere with the exercise of independent judgment in carrying out his responsibilities as a director of the corporation, and

(c)    
Exhibit 2

 

   
 meets all the independence criteria enumerated in the corporation’s Manual on Corporate Governance and such other criteria provided under applicable laws, rules or regulations (including SRC Rule 38, as amended from time to time) or determined by the Board of Directors or the Governance and Nomination Committee

 

A person nominated for election as Independent Director must possess all the qualifications and have none of the disqualifications for directorship set forth in Sections 3, 4 and 5 of Article V of the By-Laws and 

must meet all the independence criteria referred to above

 

Section 3

 

•      Director’s qualifications

 

 

 

-          at least a college graduate, or in the absence of such college degree or formal education, sufficient experience in managing a business 

-       at least twenty one (21) years old

-       proven integrity and probity

-       
Page 9 of 19

   
 assiduousness in the performance of duties

 

 

 

-       college education or equivalent academic degree

 

 

 

-       same

-       possess integrity and probity

-       deleted

 

-       ownership of at least one share of the corporation standing in his name in the books of the corporation

-       practical understanding of the business of the corporation or previous business experience

-       has attended a seminar on corporate governance

-       such other additional qualifications provided under any amendments to the Corporation Code, Securities Regulation Code, the Code of Corporate Governance issued by the Securities and 
Exhibit 2

 

   
 Exchange Commission (the “Commission”) and other relevant laws, rules and regulations in effect at the relevant time

 

Sections 4 and 5

 

•      Competing business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•      Other Grounds for Disqualification

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:

Page 10 of 19

   
 The grounds for disqualification in the third column of this summary 
Exhibit 2

 

   
 which are marked with * are in the 
Page 11 of 19

   
 existing By-Laws.

 

 

 

No person shall qualify or be eligible for nomination or election as a Director if he is engaged in any business that competes with or is antagonistic to that of the corporation or its subsidiaries.  Without limiting the generality of the foregoing, a person shall be deemed to be so engaged:

(a)       If he is an employee, officer, manager, **director**  or controlling person, or the owner (either of record or beneficially) of ten per cent (10%) or more of any outstanding class of shares, of any corporation (other than one in which this corporation owns at least thirty per cent (30%) of the capital stock) or entity engaged in a business that the Board of Directors, by at least a majority vote, determines to be competitive or antagonistic to that of this corporation or any of its subsidiaries; or

(b)       If he is an employee, officer, manager, **director** or controlling person, or the owner (either of record or beneficially) of ten per cent (10%) or more of any outstanding class of shares, of any corporation or entity engaged in any line of business of this corporation or any of its subsidiaries, when in the judgment of the Board of Directors, by at least a majority vote, the laws against combinations and restraint of trade shall be violated by such person’s membership in the Board of Directors; or

x   x   x
 
No person suffering from any of the following grounds for disqualification shall qualify or be eligible for nomination or election as a Director:
 

(a)     Any person convicted or adjudged guilty of any of the offenses or crimes specified below in a final, non-appealable judgment, decree or order issued by a judicial or an administrative body having competent jurisdiction or the Commission:

 

(i)       an offense involving moral turpitude*, fraud*, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery, false affirmation, perjury or* other fraudulent acts;

 

(ii)   any crime that (x) involves the purchase or sale of securities, as defined in the Securities Regulation Code; (y) arises out of the person’s conduct as an underwriter, broker, dealer, investment adviser, principal distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or floor broker; or (z) arises out of his fiduciary relationship with a bank, quasi-bank, trust company, investment house or as an affiliated person of any of them; or

 

(iii)  having willfully violated, or willfully aided, abetted, counseled, induced or procured the violation of, any provision of the Securities Regulation Code, the Corporation Code, or any other law administered by the Commission or the Bangko Sentral ng Pilipinas (the “BSP”), or any rule, regulation or order of the Commission or BSP*;

Exhibit 2

 

   
  

(b)       Any person who, by reason of misconduct, after hearing, is permanently enjoined by a final judgment or order of the Commission or any court or administrative body of competent jurisdiction from: (i) acting as an underwriter, broker, dealer, investment adviser, principal distributor, mutual fund dealer, futures commission merchant, commodity trading advisor, or floor broker; or (ii) acting as director or officer of a bank, quasi-bank, trust company, investment house, or investment company; or (iii) engaging in or continuing any conduct or practice in any of the capacities mentioned in sub-clauses (i) and (ii) above.

 

The disqualification shall also apply if such person: (i) is currently the subject of an order of the Commission or any court or administrative body denying, revoking or suspending any registration, license or permit issued to him under the Corporation Code, Securities Regulation Code or any other law administered by the Commission or BSP, or under any rule or regulation issued by the Commission or BSP; or (ii) has otherwise been restrained to engage in any activity involving securities and banking; or (iii) is currently the subject of an effective order of a self-regulatory organization suspending or expelling him from membership, participation or association with a member or participant of the said organization;

 

Page 12 of 19

   
 (c)   Any person found guilty by final judgment or order of a foreign court or equivalent securities or banking regulatory authority of acts, violations or misconduct similar to any of the acts, violations or misconduct enumerated in paragraphs (a) and (b) above;

Exhibit 2

 

   
  

(d)   Any person convicted by final judgment of an offense punishable by imprisonment for more than six (6) years, or a violation of the Corporation Code committed within five (5) years prior to the date of his election or appointment*; or

 

(e)  Any person judicially declared as insolvent*;

 

Section 6

 

•      Procedures for

Nomination and Election 

of Independent Directors

 

 

 

No By-Laws provision

 

 

 

With respect to the nomination and election of independent directors, the Governance and Nomination Committee shall ensure that the corporation observes the procedures and requirements contained in SRC Rule 38, as amended from time to time.

 

Section 7

 

•      Nomination of a Director for appointment by the Board of Directors to fill a vacancy arising for any reason other than removal by the stockholders or expiration of term of office

 

 

 

No By-Laws provision.

(By-Laws covers nomination of directors to be elected by stockholders.  Nominations must be submitted at least sixty (60) working days before the stockholders’ meeting)

 

 

 

Nominations must be submitted at least thirty (30) working days before the day of the Board of Directors’ meeting for the purpose of appointing a Director to fill a vacancy

 

Section 9

 

•      Powers of the Board

 

 

 

Page 13 of 19

   
 No By-Laws provision

 

 

 

Unless otherwise provided by law, the powers, business and property of the corporation shall be exercised, conducted and controlled by the Board of Directors.  The Board of Directors shall exercise its powers in consonance with the corporate governance principles instituted in the corporation’s Manual on Corporate Governance.

 

Without prejudice to such general powers and such other powers as may be granted by law, the Board of Directors shall have the following express powers:

Exhibit 2

 

   
  

(a)       From time to time, to make and change policies, rules and regulations not inconsistent with these By-Laws for the governance of the corporation and the conduct of its business and affairs;

 

(b)       To purchase, receive, take, or otherwise acquire in any lawful manner, for and in the name of the corporation, any and all property, rights, interests or privileges, including securities and bonds of other corporations, as the transaction of the business of the corporation may reasonably or necessarily require, for such consideration and upon such terms and conditions as the Board of Directors may deem proper and convenient;

 

(c)       To invest the funds of the corporation in another corporation or business or for any other purposes other than those for which the corporation was organized, whenever in the judgment of the Board of Directors, the interests of the corporation would thereby be promoted, subject to such stockholders’ approval as may be required by law;

 

(d)       
Page 14 of 19

   
 To incur such indebtedness as the Board of Directors may deem necessary and, for such purpose, to make and issue evidence of such indebtedness including, without limitation, notes, deeds of trust, instruments, bonds, debentures or securities, and/or pledge, mortgage, or otherwise encumber all or part of the property and rights of the corporation, subject to such stockholders’ approval as may be required by law;

Exhibit 2

 

   
  

(e)       To guarantee, for and in behalf of the corporation, obligations of other corporations or entities in which it has lawful interest;

 

(f)         To make provision for the discharge of the obligations of the corporation as they mature, including payment for any property or rights acquired by the corporation, either wholly or partly in money, property, or in stocks, bonds, debentures, or other securities of the corporation lawfully issued for the purpose;

 

(g)       To impose conditions as the Board of Directors may deem convenient, subject to the limitations prescribed by law, regarding the transfer of shares issued in total or partial payment of debts contracted or property acquired by, or services rendered in behalf of the corporation;

 

(h)       To sell, lease, exchange, assign, transfer or otherwise dispose of any property, real or personal, belonging to the corporation whenever in the judgment of the Board of Directors, the corporation’s interest would thereby be promoted;

 

(i)         
Page 15 of 19

   
 Subject to such stockholders’ approval as may be required by law, to establish pension, retirement, bonus, profit sharing plans, employees share purchase and stock option plans, or other types of incentives or compensation plans for the employees, including officers and directors of the corporation and to determine the persons to participate in any such plans and the amount of their respective participations;

Exhibit 2

 

   
  

(j)         To prosecute, maintain, defend, compromise or abandon any lawsuit in which the corporation or its officers are either plaintiffs or defendants in connection with the business of the corporation, and likewise, to approve the payment or settlement of whatsoever debts are payable to the corporation upon such terms as the Board of Directors may deem proper and convenient;

 

(k)       To delegate, from time to time, any of the powers of the Board of Directors which can be lawfully delegated in the course of the current business or businesses of the corporation to any standing or special committee or to any person who shall act as agents of the corporation with such powers (including the power to sub-delegate), and upon such terms, as the Board of Directors may deem appropriate;

 

(l)         To resolve doubts as to the meaning, interpretation and/or application of these By-Laws and supply the omissions thereof;

 

(m)     To authorize the issuance of shares out of the authorized but unissued capital stock of the corporation, or the buyback or repurchase of the corporation’s shares, upon such terms and conditions as the Board of Directors may deem proper and in the best interest of the corporation, subject to the requirements prescribed by law;

 

(n)       
Page 16 of 19

   
 To determine whether any part of the unrestricted retained earnings of the corporation available for declaration as dividends shall be declared as dividends, subject to the provisions of law; and to provide that the dividends thus declared shall be applied in payment of new shares to be issued to the stockholders entitled to said dividends, which new shares shall be taken out of the authorized and unissued capital stock of the corporation;

Exhibit 2

 

   
  

(o)       To determine and prescribe the qualifications, duties, term of office, compensation, remuneration, incentives and other benefits of officers.  Pursuant thereto, to appoint or elect or enter into contract with such officers, under such terms and conditions as the Board of Directors may determine to be in the best interest of the corporation; and

 

(p)       To enter into any transaction, obligation or contract and perform such acts and execute such deeds as it may deem essential for the proper administration of the corporation’s property, business and affairs or the accomplishment of any of the purposes for which the corporation was organized.

 

 

ARTICLE VII

CHAIRMAN OF THE BOARD, PRESIDENT, SENIOR EXECUTIVEVICE PRESIDENT, EXECUTIVE VICE PRESIDENTS, 

SENIOR VICE PRESIDENTS, FIRST VICE PRESIDENTS, ANDVICE PRESIDENTS

 

 

Existing

Amended

 

Section 1

 

•      Chairman

 

 

 

 

The Chairman of the Board shall preside at all meetings of the Board of Directors

 

 

 

The Chairman of the Board shall preside at all meetings of stockholders and the Board of Directors

 

Section 2

 

•      President

 

 

 

 

Page 17 of 19

   
 He shall preside at all meetings of the stockholders and, in the absence of the Chairman of the Board, 
Exhibit 2

 

   
 preside at the meetings of the Board of Directors

 

 

 

In the absence of the Chairman of the Board, he shall preside at the meetings of the stockholders and of the Board of Directors

 

 

ARTICLE IX

TREASURER AND ASSISTANT TREASURER

 

 

Existing

Amended

 

Power and Duties

 

 

The Treasurer shall be the chief fiscal officer of the corporation.  He shall discharge such duties and have such powers as the Board of Directors or the President may prescribe or assign to him.

 

 

 

The Treasurer shall have chief custody of the corporation’s funds.  He shall be responsible for the placements of the corporation’s funds, debt portfolio administration and management, planning and controlling the corporation’s cash position, reviewing the corporation’s capital structure and maintaining the corporation’s relations with financial institutions and creditors.  He shall also perform such other duties as the Board of Directors or the President may prescribe or assign to him.

 

 

ARTICLE X

CONTROLLER AND ASSISTANT CONTROLLERS

 

 

Existing

Amended

 

Power and Duties

 

 

Page 18 of 19

   
 No By-Laws provision

 

The Controller shall serve as the chief financial reporting and accounting officer of the corporation who shall be responsible for the preparation and maintenance of the corporation’s financial/accounting books and records, financial planning, revenue management and cash assurance, and management and control of disbursements.  He shall also be responsible for the preparation and reporting of the corporation’s financial statements on a stand-alone basis and/or in combination with consolidated subsidiaries, and for the corporation’s financial regulatory compliance.

 

In the absence or disability of the Controller, the Assistant Controller shall act in his place and perform his duties.  The Assistant Controller shall also perform such 
Exhibit 2

 

   
 other duties as may, from time to time, be delegated to him by the Controller and as the Board of Directors or the President may prescribe or assign to him.

 

Page 19 of 19

    

 

 Signatures

 

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 

 

 

PHILIPPINE LONG DISTANCE

TELEPHONE COMPANY

 

 

 

By        :     /s/ Ma. Lourdes C. Rausa-Chan 

Name  :     Ma. Lourdes C. Rausa-Chan

Title     :     Senior Vice President, Corporate

                  Affairs and Legal Services Head 

                  and Corporate Secretary

 

 

 

Date:August 3, 2010