Notes to Financial Statements - BDO

Notes to Financial StatementsDECEMBER 31, 2008, 2007 AND 2006(Amounts in Millions Except Per Share Data)The Group’s subsidiaries and associates are all incorporated in the Philippines, except for the following:SubsidiariesPCI Express Padala (HK) Ltd.Express Padala HK Ltd.BDO Remittance (USA), Inc.Express Padala Frankfurt GmbHEquitable PCI Express Padala (Nederland) BVPCIB Europe, S.P.A.Country of IncorporationHong KongHong KongUnited States of AmericaGermanyNetherlandsItalyThe following table presents financial information on the Group’s associates as of and for the years ended December 31, 2008 and 2007:Net Income2008 Assets Liabilities Revenue (Loss)SM Keppel Land, Inc. P 1,765 P 234 P 254 P 63Generali Pilipinas Holdings, Inc. ( 253 ) 347 ( 456 ) ( 468 )Northpine Land Incorporated 1,661 464 82 36Taal Land 141 - 1 12007SM Keppel Land, Inc. P 1,724 P 256 P 251 P 60Generali Pilipinas Holdings, Inc. 730 336 8 ( 514 )Northpine Land Incorporated 1,423 500 102 57Taal Land 159 200 1 -13.5.1 Dividend DeclarationsIn 2008 and 2007, the Group’s wholly-owned subsidiaries declared and paid cash dividends amounting to P109 and P2,384, respectively,and are presented as Dividend Income under Other Operating Income in the Parent Bank income statements.13.5.2 Mergers Among SubsidiariesIn 2008, the following mergers among subsidiaries of the Group have taken place:(a)(b)(c)On April 23, 2008, the respective Board of Directors of EBCII, Jardine Equitable Finance Corporation, EBC Capital Corporation, EquitableExchange, Inc. and Express Padala International, Inc., approved the plan of Merger with EBCII as the surviving entity. The merger wasapproved by the SEC on October 6, 2008.On April 7, 2008, the respective Board of Directors of BDO Technology (formerly Equitable Data Center, Inc.) and PCI Automation Center,Inc, approved the Plan of Merger with BDO Technology as the surviving entity. The merger was approved by the SEC on September 5,2008.On April 7, 2008, the respective Board of Directors of BDOI and EBC Insurance Brokerage, Inc. approved a Plan of Merger with BDOIas the surviving entity. The merger was approved by the SEC on August 21, 2008.The above mergers were accounted for under the pooling-of-interests method since the merging entities are under the common control ofthe Group.13.5.3 Decrease in Authorized Capital StockOn July 30, 2007, the BOD and stockholders of ECN approved the decrease in authorized capital stock of ECN from P2,000 divided into20.0 million shares to P675 divided into 6.75 million shares. The Board of Directors also approved the return to stockholders of P1,336 to besourced from the funds of ECN representing surplus capital. On September 28, 2007, the SEC approved the decrease in authorized capitalstock and P1,300 was returned by ECN on the same day. The remaining P36 was returned to stockholders on October 1, 2007.13.5.4 Acquisitions/DisposalsOn a special meeting dated August 17, 2007, the Board of Directors approved the purchase of BDO Elite Savings Bank, Inc. (see Note 26) andthe American Express Philippine Dollar Charge Card Portfolio in the amount of P763.On May 30, 2007, the then EPCIB entered into a MOA with ECN to purchase its outstanding credit card receivables and related liabilities as ofMarch 31, 2007 for the amount of P3,650. ECN has also agreed to continue to provide the technical, marketing, collection and other credit cardservices with respect to the receivables and liabilities. On December 1, 2007, an addendum to the above-mentioned MOA was entered into withthe Parent Bank for the assignment and transfer of ECN’s assets and assumption of ECN’s liabilities amounting to P403 and P490, respectively.The parties understand and agree that the liabilities assumed by the Parent Bank are more than the assets assigned and transferred to theParent Bank. ECN undertakes and agrees to pay the net liability to the Parent Bank.56Thinking Ahead To Get You Ahead • Annual Report 2008