Results of Operations

(Based on Financial Statements adopted in accordance with the Philippine Financial Reporting Standards)

Review of 2011 versus 2010

During the year 2011 consolidated net income including its newly acquired subsidiaries amounting to Php8.16 billion, 60.37% higher than the revious year net income of Php5.09 billion. Consolidated total revenues composed of real estate sales, rental income, hotel income, and other revenues elevated by 39.35% from Php20.54 billion to Php28.63 billion resulting from strong property sales and increased leasing income and nonrecurring gain from sale of shares.

Development

Among product portfolios, the bulk of generated consolidated revenues came from the sale of condominium units and residential lots amounting to Php15.89 billion in 2011 compared to Php13.11 billion in 2010, an increase of 21.18%. The Group’s registered sales mostly came from the following projects: Eight Forbestown in Fort Bonifacio Taguig; Eastwood Le Grand in Eastwood City; Mckinley West, Morgan Suites and The Venice Luxury Residences in Mckinley, Taguig City; Manhattan Heights in Quezon City; Newport Palmtree Villas, 81 Newport Boulevard and Newport City in Pasay.

Leasing

Rental income contributed 13.37% to the consolidated revenue and amounted to Php3.83 billion compared to Php2.70 billion reflected last year, a 42.02% increase. Contributing to the growth are the escalation and completion of additional leasing properties and increase in demand for office space from BPO Companies.

Hotel Operations

The Group’s hotel operations posted an amount of Php392.17 million in 2011, an increase of 68.49%, from Php232.76 million in 2010. The increase is primarily due to the increase in the number of hotel rooms and hotel occupancy rates.

In general, the increase in cost and expenses by 32.32% from Php15.46 billion in 2010 to Php20.45 billion in 2011 was due mainly to increase in recognized real estate sales, as well as marketing and selling expenses particularly commission expenses, resulting from aggressive marketing activities. Income tax expense in 2011 amounting to Php2.00 billion resulted to a 24.01% increase from 2010 reported amount of Php1.61 billion due to higher taxable income. There were no seasonal aspects that had a material effect on the financial condition or financial performance of the Group. Neither were there any trends, events or uncertainties that have had or that are reasonably expected to have a material impact on net sales or revenues or income from continuing operations. The Group is not aware of events that will cause material change in the relationship between costs and revenues. There are no significant elements of income or loss that did not arise from the Group’s continuing operations.