For the nine month ended September 30, 2007

INCOME STATEMENT

Revenues

Real Estate
The Company recorded revenue from real estate sales of 6,181 million in the nine months ended September 30, 2007, an increase of 38.3% from 4,469 million in same period last year. This was primarily attributable to the increase in the overall sales of its business units particularly that of C&P Homes and Communities Philippines during the nine months of 2007 compared to nine months of 2006.  The Company uses the Percentage of completion method of revenue recognition where revenue is recognized in reference to the stages of development of the properties.  

• Real estate revenue of C&P increased by 61.4% to 1,490 million in the nine months ended September 30, 2007 from 923 million for the nine months ended September 30, 2006. This was due to increase in the recorded sales of C&P Homes, specifically in its Cerritos, Merida, Pacific Residences and Tierra Nevada projects.  C&P Homes caters to the affordable segment of the market.

• Real estate revenue of Communities Philippines increased to 1,633 million in the nine months ended September 30, 2007, an increase of 59.4% from 1,024 million in the nine months ended September 30, 2006.  This increase was principally due to increase in Communities Philippines’ sales in its Savannah in Iloilo, Toscana in Davao, Wedgewood in Pangasinan and Plantacion in Batangas projects for the 2007.  Communities Philippines is the business unit of Vista Land that offers residential properties outside the Mega Manila area.

• Real estate revenue of Crown Asia increased by 25.8% to 1,442 million in the nine months ended September 30, 2007 from 1,146 million in the nine months ended September 30, 2006.  This was due to the increase in the sales of Crown Asia’s different projects particularly Ponticelli, Valenza and Maia Alta for the year.  Crown Asia is Vista Land’s business unit for the middle income segment of the market

• Real estate revenue of Brittany increased by 17.5% to 1,617 million in the nine months ended September 30, 2007 from 1,376 million in the same period last year.  This was due to the increase in Brittany’s Portofino and Crosswinds projects.  Brittany caters to the high-end segment of the market.

Figure 1. Real Estate Sales Per Division

Gain on restructuring
The Company recorded a non-recurring gain on restructuring of P1,379 million in the nine months ended September 30, 2007 as a result of C&P Homes’ restructuring of its foreign currency denominated obligation, Floating Rate Note (FRN).

Unrealized foreign exchange gain
Unrealized foreign exchange gain decreased by 58.1% to P94 million in the nine months ended September 30, 2007 from P226 million in the nine months ended September 30, 2006.  This was due primarily to C&P Homes’ restructuring of its FRN.

Interest Income
Interest income increased to P522 million in the nine months ended September 30, 2007 from P388 million in the nine months ended September 30, 2006. The 34.6% increase was due to higher collection of interest from the company’s in-house receivables.

Miscellaneous
Miscellaneous revenue decreased by 12.6% to P170 million in the nine months ended September 30, 2007 from P194 million in the nine months ended September 30, 2006 due to an improved conversion of accounts.

Costs and Expenses

Cost and expenses increased by 21.6% to P4,807 million in the nine months ended September 30, 2007 from P3,954 million in the nine months ended September 30, 2006 but as a percentage of real estate sales, Costs and Expenses improved from 88.5% in the nine months ended September 30, 2006 to 77.8% in the nine months ended September 30, 2007. The 21.6% increase in the account was primarily attributable to the following:

• Cost of real estate sales increased by 38.5% to P3,079 million in the nine months ended September 30, 2007 from P2,223 million in the nine months ended September 30, 2006.  This was primarily due an increase in the overall recorded sales of Vista Land’s four business units. 

• Operating expenses increased by 23.3% to P1,307 million in the nine months ended September 30, 2007 from P1,060 million in the nine months ended September 30, 2006.  This was primarily due to the following:

• an increase in the advertising and promotions to P333 million in the nine months ended September 30, 2007 from P247 million in the nine months ended September 30, 2006 resulting from aggressive marketing activities for the year; 

• an increase in commissions to P332 million in the nine months ended September 30, 2007 from P234 million in the nine months ended September 30, 2006 due to increased real estate sales; and

• an increase in salaries, wages and employees benefits to P142 million in the nine nths ended September 30, 2007 from P117 million in the nine months ended September 30, 2006 primarily due to the accrual of pension liability. 

• Interest and financing charges decreased by 37.2% to P421 million in the nine months ended September 30, 2007 from P671 million in the nine months ended September 30, 2006. This was due to the buying back of all the sold receivables of the Company as part of its use of proceeds from the follow-on offering.  The buy back was completed last September 2007.  Sold receivables usually carry an interest of about 16% to 21%.

Figure 2. EBIT Per Division

Provision for Income Tax

Provision for income tax was 817 million in the nine months ended September 30, 2007 and
302 million in the nine months ended September 30, 2006, representing an increase P515 million.  The increase was due primarily to a higher taxable income and the recognition of the deferred tax liability from the gain on restructuring for the period. 

Net Income
As a result of the foregoing, the Company’s net income increased by 166.7% to P2,722 in the nine months ended September 30, 2007 from P1,021 million in the nine months ended September 30, 2006.

For the nine months ended September 30, 2007, there were no seasonal aspects that had a material effect on the financial condition or results of operations of the Company.  Neither were there any trends, events or uncertainties that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.  The Company is not aware of events that will cause a material change in the relationship between the costs and revenues.

There are no significant elements of income or loss that did not arise from the Company’s continuing operations.

BALANCE SHEET

Total assets as of September 30, 2007 were P40,219 million compared to P29,735 million as of December 31, 2006, or a 35.3% increase.  This was due to the following:

• Cash and cash equivalents posted a significant increase of P6,572 million, from P1,364 million as of December 31, 2006 to P7,936 million as of September 30, 2007 due to the recognition of the net proceeds from the Company’s follow-on offering last July 26, 2007.

• Receivables increased by 25.6% due to higher sales recognized for the period from P7,910 million as of December 31, 2006 to P9,936 million as of September 30, 2007. 

• Real estate for sale and development increased by 8.7% from P18,067 million as of December 31, 2006 from P19,645 million as of September 30, 2007 due primarily to acquisitions of lands for future development as well as opening of new projects.

• Advances to real estate joint ventures increased by P810 million, from P497 million as of December 31, 2006 to P1,307 as of September 30, 2007 due to an increase in advances given to joint venture partners as well as reclassification of certain advances to affiliates in prior years pertaining to land acquisition through joint venture arrangement where documentations for the said transactions have already been completed.

• Due from related parties decreased by 100.0% from P586 million as of December 31, 2006 to nil as of September 30, 2007 due to the reclassification of certain accounts to advances to real estate joint ventures as well as settlements made by the Company to its affiliated companies.

• Other assets increased by 20.3% from P594 million as of December 31, 2006 to P714 million as of September 30, 2007 due primarily to increase in creditable withholding tax.

Total liabilities as of September 30, 2007 were P9,252 million compared to P21,445 million as of December 31, 2006, or a 56.9% decrease.  This was due to the following:

• Interest bearing bank loans decreased by 30.4% to P262 million as of September 30, 2007 from P377 million as of December 31, 2006 due to payments made during the year.

• Loans payable, representing the sold portion of the Company’s installment contracts receivables with recourse, decreased significantly by 100.0% from P4,951 million as of December 31, 2006 to nil as of September 30, 2007 due to the buying back of all the sold receivables of the Company as part of the use of proceeds from its follow-on offering.  The buy back was completed last August 2007. 

• Liabilities for purchased land increased by 54.5% from P984 million as of December 31, 2006 to P1,520 million as of September 30, 2007 due to new acquisitions of land for future development.

• Restructuring of FRN resulted in a significant decrease in the LTCP/FRN/LTN account of 80.3% from P6,650 as of December 31, 2006 to P1,311 million as of September 30, 2007.

• Accounts and other payables decreased by 62.6% from P5,443 million as of December 31, 2006 to P2,038 million as of September 30, 2007 due to the restructuring of the interest portion of the FRN.

• The group accrued a significant portion of its pension cost during the year resulting in an increase in the pension liability of 34.1% from P121 million as of December 31, 2006 to P162 million as of September 30, 2007.

• Deferred tax liabilities posted a significant increase of 133.1% from P606 million as of December 31, 2006 to P1,412 million as of September 30, 2007.  The increase in the account was due primarily to the recognition of the deferred tax liability from the gain on restructuring in 2007 and the increase in the sales that will be subjected to tax only upon collection and not during the recognition of the revenue.

• Customers’ advances and deposits increased by 10.1% from P2,313 million as of December 31, 2006 to P2,546 million as of September 30, 2007 due to an increase in the number of uncontracted accounts.

Total stockholder’s equity increased to P30,915 million as of September 30, 2007 from P8,226 million as of December 31, 2006 due largely to the issuance of stocks as part of the follow-on offering of the Vista Land last July 26, 2007 and the FRN restructuring as well as due to the higher net profit realized for the period.