2go Sec 17-q March 2014 5 20 14 Final v1. - 4D668

COVER SHEET
4 4 0 9
SEC Registration Number
2 G O G R O U P , I N C .
[ f o r m e r l y A T S C o n s o l i d a t e d
( A T S C ) , I n c . ] A N D S U B S I D I A R I E S
(Companys Full Name)
1 5 t h F l o o r , T i m e s P l a z a B u i l d i n g
U n i t e d N a t i o n s A v E n u e c o r n e r T a f t
A v e n u e , E r m i t a , M A n i l a
(Business Address: No. Street City/Town/Province)
Jeremias E. Cruzabra (02) 528-7540

(Contact Person) (Company Telephone Number)
1 2 3 1 1 7 - Q 0 5 2 2
Month Day (Form Type) Month Day
(Fiscal Year) (Annual Meeting)
(Secondary License Type, If Applicable)
CFD Articles 1, 2 and 3

Dept. Requiring this Doc. Amended Articles Number/Section
Total Amount of Borrowings
1,935 =
P
Total No. of Stockholders Domestic Foreign
To be accomplished by SEC Personnel concerned
File Number LCU
Document ID Cashier
STAMPS
Remarks: Please use BLACK ink for scanning purposes.
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-Q
QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES
REGULATION CODE AND SRC RULE 17(2) (b) THEREUNDER
1. For the quarterly period ended March 31, 2014
2. Commission identification number 4409 3. BIR Tax Identification No 000-313-401-000
2GO GROUP, INC.

4. Exact name of issuer as specified in its charter
Philippines
5. Province, country or other jurisdiction of incorporation or organization
6. Industry Classification Code: (SEC Use Only)
15th Floor Times Plaza Bldg, UN Ave cor Taft Ave, Ermita, Manila 1000
7. Address of issuer's principal office Postal Code
(02) 528-7540, (02) 528-7412

8. Issuer's telephone number, including area code
12th Floor Times Plaza Bldg, UN Ave cor Taft Ave, Ermita, Manila
9. Former name, former address and former fiscal year, if changed since last report
10. Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding

and Amount of Debt Outstanding
Common Stock 2,446,136,400

Total Liabilities 9,446,716,713
11. Are any or all of the securities listed on a Stock Exchange?
Yes [ X ] No [ ]
Philippine Stock Exchange - Common Stock
12. Indicate by check mark whether the registrant:
(a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 there under or
Sections 11 of the RSA and RSA Rule 11(a)-1 there under, and Sections 26 and 141 of the
Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter
period the registrant was required to file such reports)
Yes [ X ] No [ ]
(b) has been subject to such filing requirements for the past ninety (90) days.
Yes [ X ] No [ ]
2GO SEC Form 17-Q First Quarter 2014

FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following Financial Statements are filed as part of this SEC Form 17-Q:
1. Unaudited Consolidated Balance Sheets as of March 31, 2014 and Audited

Consolidated Balance Sheets as of December 31, 2013 i - ii
2. Unaudited Consolidated Statements of Income for the Three Months Ended March 31,
2014 and 2013 iii
3. Unaudited Consolidated Statements of Comprehensive Income for the Three Months

Ended March 31, 2014 and 2013 iv
4. Unaudited Consolidated Statement of Changes in Equity as of March 31, 2014 and

2013
v
5. Unaudited Consolidated Cash Flows for the Three Months Ended March 31, 2014 and
2013 vi - vii
6. Note to Consolidated Financial Statements 1 - 79
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS
1. Key Performance Indicators and Results of Operations 80 - 84
2. Company Outlook 85
3. Financial Soundness Indicators 86
4. Map Of The Conglomerate Or Group Of Companies Of The Registrant 87
5. Statements of Retained Earnings Available For Dividend Declaration 88

2GO GROUP, INC.
AND SUBSIDIARIES
ITEM 1
Unaudited Consolidated Financial Statements

i
2GO GROUP, INC.

[formerly ATS Consolidated (ATSC), Inc.]
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
March 31, 2014 December 31, 2013

(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents (Note 6) P 626,159
= =918,645
P
Trade and other receivables (Notes 7 and 23) 4,030,630 3,949,819
Inventories (Note 8) 449,968 421,957
Other current assets (Note 9) 1,187,339 1,054,409
Total Current Assets 6,294,096 6,344,830
Noncurrent Assets
Property and equipment (Notes 13 and 20) 5,197,754 5,054,932
Available-for-sale investments (AFS) (Note 11) 6,907 6,907
Investments in associates and joint ventures (Note 12) 188,475 181,977
Investment property (Note 14) 9,763 9,763
Software development costs (Note 15) 15,810 15,379
Deferred income tax assets - net (Note 29) 504,981 477,076
Goodwill (Note 5) 250,450 250,450
Other noncurrent assets (Note 16) 195,610 180,590
Total Noncurrent Assets 6,369,750 6,177,074
TOTAL ASSETS = 12,663,845
P =12,521,904
P
LIABILITIES AND EQUITY

Current Liabilities
Loans payable (Note 17) = 1,347,873
P P1,344,927
=
Trade and other payables (Notes 18 and 23) 4,158,633 4,189,244
Income tax payable 9,643 5,772
Redeemable preferred shares (Notes 21 and 24) 6,643 6,680
Current portions of:
Long-term debts (Note 19) 243 373
Obligations under finance lease (Notes 13 and 20) 27,342 28,592
Total Current Liabilities 5,550,378 5,575,588
Noncurrent Liabilities
Long-term debts - net of current portion (Note 19) 3,598,849 3,597,496
Obligations under finance lease - net of current portion
(Notes 13 and 20) 87,285 89,192
Accrued retirement benefits (Note 28) 165,232 167,243
Deferred income tax liabilities - net (Note 29)
Other noncurrent liabilities 44,973 9,369
Total Noncurrent Liabilities 3,896,339 3,863,300
Total Liabilities =
P 9,446,717 =9,438,888
P
(Forward)

ii
March 31, 2014 December 31, 2013

Equity
Attributable to the equity holders of the
Parent Company:
Share capital (Note 24) =2,484,653
P =2,484,653
P
Additional paid-in capital 910,901 910,901
Acquisitions of non-controlling interests (Note 24) (3,093) (3,243)
Excess of cost over net assets of investments (Note 24) (10,912) (9,835)
Treasury shares (Note 24) (58,715) (58,715)
Other comprehensive loss (86,353) (86,405)
(Deficit) (Note 24) (47,420) (179,314)
3,189,062 3,058,042
Non-controlling interests 28,067 24,974
Total Equity 3,217,128 3,083,016
TOTAL LIABILITIES AND EQUITY = 12,663,845
P =12,521,904
P
See accompanying Notes to Consolidated Financial Statements.

iii
2GO GROUP, INC.

AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except for Earnings (Loss) Per Common Share)
Quarters Ended March 31

2013
2014
(Unaudited and
(Unaudited)
restated)
REVENUES
Freight (Note 23) P
=1,139,625 =1,297,086
P
Passage 741,077 852,241
Service fees (Note 23) 613,923 662,010
Sale of goods 605,619 506,007
Others 219,331 349,844
3,319,574 3,667,188
OPERATING COSTS AND EXPENSES (Note 25)
Operating 2,045,160 2,425,372
Terminal 347,786 326,371
Cost of goods sold (Note 8) 489,033 425,544
Overhead 237,928 288,083
3,119,908 3,465,369
OTHER INCOME (CHARGES)
Equity in net earnings (losses) of associates (Note 12) 6,498 12,188
Interest and financing charges (Note 26) (73,554) (104,723)
Others - net (Note 26) 23,228 16,718
(43,828) (75,817)
INCOME BEFORE INCOME TAX 155,838 126,002
PROVISION FOR (BENEFIT FROM) INCOME TAX (Note
29) 20,851 29,597
NET INCOME P
=134,987 =96,404
P
Attributable to:
Equity holders of the Parent Company P
=131,894 =93,691
P
Non-controlling interests 3,093 2,714
P
=134,987 =96,404
P
Basic Income Per Common Share (Note 31) P

= 0.0539 =0.0383
P

iv
2GO GROUP, INC.

AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
March 31, 2013

March 31, 2014 (Unaudited and
(Unaudited) Restated)
NET INCOME (LOSS) P

= 134,987 =96,404
P
OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income to be reclassified to profit or loss
in subsequent periods:
Net changes in unrealized gain on AFS investments
(Note 11) 52 38
52 38
TOTAL COMPREHENSIVE INCOME (LOSS)

FOR THE YEAR P
= 135,039 = 96,442
P
Attributable to:
Equity holders of the Parent Company P
= 131,946 = 99,156
P
Non-controlling interest 3,093 2,714
P
= 135,039 = 96,442
P

v
2GO GROUP, INC.

AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE PERIOD ENDED MARCH 31, 2014 AND 2013
Attributable to Equity Holders of the Parent Company

Other Comprehensive Income (Loss)
Re- Share in Re-
Excess of Cost measurement measurement
Over Net Gains (Losses) Gains (Losses)
Assets on Accrued on Accrued
Acquisition (Excess of Net Unrealized Share in Retirement Retirement
of Non- Assets Over Gain (Loss) Cumulative Benefits, net of Benefits of Retained
Share Additional controlling Cost) of on AFS Translation Deferred Associates and Earnings Treasury
Capital Paid-in Interests Investments Investments Adjustment of Income Tax Joint Ventures (Deficit) Shares Non-controlling
(Note 24) Capital (Note 24) (Note 24) (Note 11) an Associate Effect (Note 12) Subtotal (Note 24) (Note 24) Total Interests Total Equity
BALANCES AT DECEMBER 31,
2012, AS RESTATED P2,484,653
= = 910,901
P = 5,940
P = 13,208
P = 396
P = 5,294
P (P
=74,420) (P
=2,474) (P
=71,204) (P
=391,358) (P
=58,715) = 2,893,425
P = 27,300
P = 2,920,725
P
2012, AS PREVIOUSLY
REPORTED 2,484,653 910,901 5,940 (10,906) 396 5,294 5,690 (446,241) (58,715) 2,891,322 28,286 2,919,608
Effect of change in accounting policies
(Note 2) 24,114 (74,420) (2,474) (76,894) 54,883 2,103 (986) 1,117
2012, AS RESTATED 2,484,653 910,901 5,940 13,208 396 5,294 (74,420) (2,474) (71,204) (391,358) (58,715) 2,893,425 27,300 2,920,725
Total comprehensive loss for the year 38 (17,464) 2,225 (15,201) 212,044 196,843 15,037 211,880
Changes in ownership interest resulting
in the decrease of acquisition of
non-controlling interest (9,183) (23,043) (32,226) (5,142) (37,368)
Dividends declared (12,221) (12,221)
2013 2,484,653 910,901 (3,243) (9,835) 434 5,294 (91,884) (249) (86,405) (179,314) (58,715) 3,058,042 24,974 3,083,016
Total comprehensive income for the
year 131,894 131,894 3,093 134,987
Effect of acquisition of acquisition of
non-controlling interest 150 (1077) 52 52 (875) (875)
Dividends declared
BALANCES AT MARCH 31, 2014 = 2,484,653
P = 910,901
P (P
=3,093) (P
=10,912) = 486
P = 5,294
P (P
=91,884) (P
=249) (P
=86,353) (P
=47,420) (P
=58,715) = 3,189,062
P = 28,067
P = 3,217,128
P

BALANCES AT DECEMBER 31, 2012 2,484,653 910,901 396 5,294 (10,906) 5,940 (446,241) (58,715) 2,891,322 28,286 2,919,608
Net income (loss) for the year 93,691 93,691 2,714 96,404
Other comprehensive income for the year 21 21 21
Total comprehensive loss for the year - - 21 - - - 93,691 - 93,711 2,714 96,425
Dividend distribution to non-controlling interests - (1,955) (1,955)
Excess of net asset over cost of investments (6) (6) (6)
BALANCES AT MARCH 31, 2013 2,484,653 910,901 417 5,294 (10,912) 5,940 (352,550) (58,715) 2,985,027 29,045 3,014,072

vi
2GO GROUP, INC.

AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period Ended March 31

2013
2014 (Unaudited and
(Unaudited) restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax = 155,838
P = 126,002
P
Adjustments for:
Depreciation and amortization of property and
equipment and software development cost
(Note 13 and 15) 214,237 246,179
Interest and financing charges (Note 26) 73,554 96,014
Interest income (Note 26) (4,801) (8,146)
Unrealized foreign exchange gains (212) (206)
Equity in net loss (earnings) of associates and joint ventures
(Note 12) (6,498) (12,188)
Provisions for doubtful accounts 147 2,454
Loss (gain) on disposals of:
Property and equipment (Notes 13 and 26) (6,334)
Recovery from insurance claims (Note 26) (2,086)
Operating cash flows before working capital changes 432,265 441,688
Decrease (increase) in:
Trade and other receivables (76,157) (252,732)
Inventories (28,011) (592)
Other current assets (132,930) (103,665)
Increase (decrease) in trade and other payables (34,665) 589,274
Net cash from (used in) operations 160,503 673,973
Income taxes paid, including creditable withholding taxes (20,851) (29,597)
Net cash flows from (used in) operating activities 139,652 650,332
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to:
Property and equipment (Note 13) (356,421) (204,819)
Software development costs (Note 15) (1,068)
Proceeds from sale of:
Other noncurrent assets 15,142
Net cash flows from (used in) investing activities (P
=357,489) (P
=189,677)
(Forward)

vii
Period Ended March 31

2013
2014 (Unaudited and
CASH FLOWS FROM FINANCING ACTIVITIES

Net availments (payments) of:
Loans payable (Note 17) = 2,946
P = 37,286
P
Payments of:
Long-term debts (Note 19) (3,286) (262,833)
Redemption of preferred shares (Note 21) (37)
Interest paid (74,270) (103,319)
Dividends paid to non-controlling interests
Net cash flows from (used in) financing activities (74,646) (328,866)
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON

CASH AND CASH EQUIVALENTS
NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS (292,483) 131,789

AT BEGINNING OF YEAR 918,645 786,856

AT END OF YEAR (Note 6) = 626,162
P = 918,645
P

-1-
2GO GROUP, INC.

AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands, Except Number of Shares, Earnings per Common Share,
Exchange Rate Data and When Otherwise Indicated)
1. Corporate Information, Status of Operations and Management Action Plans and Approval
of the Consolidated Financial Statements
Corporate Information
2GO Group, Inc. [2GO or the Company, formerly ATS Consolidated (ATSC), Inc.] was
incorporated in the Philippines on May 26, 1949. Its corporate life was renewed on May 12, 1995
and will expire on May 25, 2045. The Companys shares of stocks are listed in the Philippine
Stock Exchange (PSE). The Company and its subsidiaries (collectively referred to as the
Group) are primarily engaged in the business of operating vessels, motorboats and other kinds of
watercrafts; aircrafts and trucks; and acting as agent for domestic and foreign shipping companies
for purposes of transportation of cargoes and passengers by air, land and sea within the waters and
territorial jurisdiction of the Philippines. The Companys registered office address is 15th Floor,
Times Plaza Building, United Nations Avenue corner Taft Avenue, Ermita, Manila.
As of December 31, 2013 and 2012, the Company is 88.3%-owned subsidiary of Negros
Navigation Co., Inc (NN or the Parent Company). Its ultimate parent is Negros Holdings &
Management Corporation (NHMC). NN and NHMC are both incorporated and domiciled in the
Philippines.
On December 1, 2010, the Board of Directors (BOD) of Aboitiz Equity Ventures, Inc. (AEV)
and Aboitiz & Company, Inc. (ACO) approved the sale of their shareholdings in the Parent
Company to NN in accordance with the securities and purchase agreements executed among AEV,
ACO and NN. On December 28, 2010, the sale was finalized at = P1.8813 per share. AEV sold its
entire shareholdings in the Company comprising of 1,889,489,607 common shares for
=3.6 billion. ACO, on the other hand, sold its entire shareholdings in the Company comprising of
P
390,322,384 common shares for = P734.0 million. This resulted to 93.20% NN ownership of the
outstanding common shares of the Company, along with all the Companys non-controlling shares
that may be tendered to NN subsequent to December 31, 2010.
On February 22, 2011, in relation to the tender offer issued by NN for the outstanding common
shares held by public shareholders of the Company, NN acquired 120,330,004 common shares
from the Companys non-controlling shareholders equivalent to 4.9% additional ownership
interest in the Company for a total purchase price of =P226.8 million. As a result, NNs ownership
interest in the Company increased to 98.12%. On December 21, 2012, NN sold 240,000,000
common shares of the Company at a price of P =1.65 per share to the public shareholders. The sale
of shares resulted to a reduction in the ownership of NN in the Company from 98.12% to 88.31%.
In February and March 2012, the Philippine SEC approved the application of the Company and its
subsidiaries to amend their Articles of Incorporation and By-laws, which include, among others,
the change in their corporate names to 2GO Group, Inc. (formerly ATSC), 2GO Express, Inc.
[formerly ATS Express, Inc. (ATSEI)], and 2GO Logistics, Inc. [formerly ATS Distribution, Inc.
(ATSDI)].

-2-
On August 24, 2011, the Philippine SEC also approved the amendment to the Companys
secondary purpose to include rendering technical services requirement to customers for
refrigerated marine container vans and related equipment or accessories. This amendment was
previously approved by the BOD on April 28, 2011 and ratified by the stockholders on
June 22, 2011.
Status of Operations and Management Action Plans

As of December 31, 2011, NN and its subsidiaries (collectively referred to as NN Group) has
reported a consolidated deficit amounting to P=1,498.7 million due to the consolidated net losses
incurred in 2011 and 2010 amounting to = P1,382.7 million and =P107.1 million, respectively. The
consolidated net loss in 2010 (pre-integration year) included the net operating income of NN but
was reduced by the transaction costs incurred in acquiring 2GO and subsidiaries. The 2011
performance was significantly affected by the integration activities that are primarily geared
towards achieving economies of scale and realizing the synergies in both the shipping and non-
shipping operations of NN and 2GO. NN Group incurred additional costs and expenses in view of
these integration activities, which include, among others, the consolidation of facilities and the
right-sizing of the manpower complement.
As a result, NN did not meet the minimum debt service coverage ratio (DSCR) and minimum
current ratio and 2GO breached the maximum debt to equity ratio required under the Groups
long-term loan agreements with the creditor bank as of December 31, 2011 (see Note 19). This,
however, did not affect the status of the loan because the creditor bank issued a waiver on the
breach of the loan covenants in its letters to NN and 2GO dated December 28, 2011.
In 2012 (2nd phase of the integration), NN Group incurred consolidated net loss amounting to
=
P89.0 million (after non-controlling interest), which is 93.2% lower compared to the consolidated
net loss reported in 2011. This net loss increased the deficit to P =1,591.6 million as of
December 31, 2012. Despite the improvement in operations, and higher consolidated net cash
inflow from operating activities of = P627.2 million in 2012 and = P625.6 million in 2011, 2GO
remained in breach of the maximum debt to equity ratio, including the minimum DSCR and
minimum current ratio. This, however, again did not affect the status of the loan because the
creditor bank has issued a waiver on the breach of the loan covenants in its letters to 2GO dated
December 28, 2012.
In 2013, NN Groups net loss after tax amounted to =P255.4 million from a loss of =
P89.0 million in
2012. In June 2013, the Group refinanced its original long-term debt with counter-party bank with
a new loan agreement having revised terms and conditions such as: (1) two years grace period, (2)
with fixed and variable interest rate components that are based on market and (3) ballooned
principal repayments in 2017 and 2018. With this, the Group was able to meet the minimum
current ratio, maximum debt to equity ratio and minimum DSCR as required in the debt covenant.
In 2013, NNs shareholders infused $41.7 million (of which $28.3 million has been remitted in
2012) as additional capital to NN primarily to support working capital requirements and to pay off
certain maturing obligations of the Group.
In March 2014, NN Groups performance already posted a positive = P52.8 million bottomline and
management is optimistic that the positive performance of the Group will be sustainable in
ensuing years. Serious steps are now being undertaken to further solidify the Groups competitive
position by rapidly expanding the Groups logistics arm with the objective of increasing customer
traffic and solidifying the Groups leading position within the areas where the Group operates. NN
Group is implementing certain strategies and action plans to achieve positive results on the
financial performance, financial condition and cash flows for 2014. Among others, these are:

-3-
a. Continued fleet and route rationalization for the Shipping business and implementation of
more aggressive sales and marketing strategies for the Non-Shipping business.
b. Comprehensive review and implementation of cost saving initiatives, including that of the One
Port Project.
c. Implementation of a more robust management reporting systems to closely monitor the
financial results and operating performance of the business units and ensure that they are all
working to attain the revenue and collection targets and the savings from cost containment
measures.
2. Summary of Significant Accounting and Financial Reporting Policies
Basis of Preparation
The consolidated financial statements of the Group are prepared on a historical cost basis, except
for quoted available-for-sale (AFS) investments which are measured at fair value. The
consolidated financial statements are presented in Philippine peso (Peso), which is the Parent
Companys functional and presentation currency. All amounts are presented to the nearest
thousands, except when otherwise indicated.
The consolidated financial statements provide comparative information in respect of the previous
period. In addition, the Group presents an additional consolidated balance sheet at the beginning of
the earliest period presented when there is a retrospective application of an accounting policy, a
retrospective restatement, or a reclassification of items in the consolidated financial statements. An
additional consolidated balance sheet as at January 1, 2012 is presented in the consolidated financial
statements due to retrospective application of certain accounting policies (see Changes in Accounting
Policies and Disclosures).
Statement of Compliance
The consolidated financial statements of the Group are prepared in accordance with Philippine
Financial Reporting Standards (PFRS).
Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year except for
the following new and amended PFRS, Philippine Accounting Standards (PAS) and Philippine
Interpretations based on the Interpretations of the International Financial Reporting Standards
Interpretation Committee (IFRIC) which were adopted as of January 1, 2013.
PFRS 10, Consolidated Financial Statements, replaces the portion of PAS 27, Consolidated and
Separate Financial Statements, that addresses the accounting for consolidated financial
statements. It also includes the issues raised in Standard Interpretations Committee (SIC) 12,
Consolidation - Special Purpose Entities. PFRS 10 establishes a single control model that
applies to all entities including special purpose entities. The changes introduced by PFRS 10
require management to exercise significant judgment to determine which entities are controlled,
and therefore, are required to be consolidated by a parent, compared with the requirements that
were in PAS 27.
A reassessment of control was performed by the Company on all its subsidiaries, associates
and joint ventures in accordance with the provisions of PFRS 10. Following the reassessment,
the Company determined that there are no additional entities that need to be fully consolidated
nor are there subsidiaries that need to be deconsolidated.

-4-
Amendments to PAS 27, Separate Financial Statements. As a consequence of the issuance of

the new PFRS 10 and PFRS 12, Disclosure of Interests in Other Entities, what remains of
PAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in
the separate financial statements. The adoption of the amended PAS 27 has no significant
impact on the separate financial statements of the Company.
PFRS 11, Joint Arrangements, replaces PAS 31, Interests in Joint Ventures, and SIC 13,
Jointly-controlled Entities - Non-monetary Contributions by Venturers. PFRS 11 removes the
option to account for jointly controlled entities (JCEs) using proportionate consolidation.
Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity
method.
Interest in Joint Ventures

The application of PFRS 11 affected the accounting for the Groups interests in KLN
Holdings (KLN). As disclosed in Note 12, the Group entered into an InvestorsAgreement
(Agreement) with a third-party to form KLN. Prior to transition to PFRS 11, KLN was
classified as a jointly controlled entity and the Groups share of the assets, liabilities, revenue,
income and expenses was proportionately consolidated in the consolidated financial
statements. Upon adoption of PFRS 11, the Group has determined that its interest in KLN
should be classified as a joint venture under PFRS 11 and it is, therefore, required to be
accounted for using the equity method (see Note 12). The transition was applied
retrospectively as required by PFRS 11 and the opening balances at January 1, 2012 and the
comparative information for the years ended December 31, 2013 and 2012 have been restated.
The effect of applying PFRS 11 on the Groups consolidated financial statements is as

follows:
Consolidated Balance Sheets
December 31, January 1,

2012 2012
(In Thousands)
Increase (Decrease) in Assets
Cash and cash equivalents (P
=4,100) (P
=12,741)
Trade and other receivable (58,656) (45,753)
Other current assets (2,233) (1,982)
Property and equipment (2,811) (1,489)
Investment in associates and joint ventures 23,052 20,428
Deferred income tax assets - net (1,352) (770)
Total assets (P
=46,100) (P
=42,307)
(Forward)

-5-

2012 2012
(In Thousands)
Decrease in Liabilities
Loans payable (P
=4,900) =
P
Trade and other payables (39,388) (41,285)
Accrued retirement benefits (1,812) (1,022)
(P
=46,100) (P
=42,307)
Consolidated Statements of Income

2012 2012
(In Thousands)
Impact on Profit or Loss
Service fees P
=219,105 P183,053
=
Operating expenses (192,130) (148,642)
Overhead expenses (22,467) (22,634)
Other income (charges) 569 (449)
Equity in net earnings of associates and
joint ventures 2,624 7,934
Income before income tax 2,453 3,394
Provision for income tax (2,453) (3,394)
Net income =
P =
P
Consolidated Statements of Cash Flows

2012 2012
(In Thousands)
Impact on Cash Flows
Cash and cash equivalents at beginning of period (P
=12,741) (P
=2,667)
Operating 10,949 (11,433)
Investing 2,314 1,164
Financing (4,622) 195
Net effect on cash (P
=4,100) (P
=12,741)
The transition did not have a significant impact on the basic/diluted earnings per share for the
years ended December 31, 2012 and 2011.
Interest in Joint Operations

The Group also assessed its existing ownership in United South Dockhandlers, Inc. (USDI).
The Group has a 48% interest in USDI. Prior to transition to PFRS 11, the Group considered
USDI as an associate and accounted for its ownership in USDI under the equity method. Upon
adoption of PFRS 11, the Group has determined that it has control over USDIs specific assets
and liabilities. As a result, the assets and liabilities that were identified as being controlled by
the Group, as well as the resulting revenues and expenses, were consolidated and such

-6-
consolidation have been retrospectively recognized in the consolidated financial statements of

the Group.
The effect of applying PFRS 11 on the Groups consolidated financial statements is as

follows:

2012 2012
(In Thousands)
Increase (Decrease) in Assets
Cash and cash equivalents P1,959
= P6,251
=
Trade and other receivables 50,901 23,836
Inventories 446 109
Other current assets 6,601 3,775
Property and equipment 443 680
Investment in associates and joint ventures (22,909) (13,623)
37,441 21,028
Increase in Liabilities
Trade and other payables 27,148 9,980
Accrued retirement benefits 1,041
28,189 9,980
Net Increase in Equity =9,252
P =11,048
P
Equity attributable to:
Parent company P8,170
= P9,757
=
Non-controlling interest 1,082 1,291
Consolidated Statements of Income

December 31
2012 2011
Impact on Profit or Loss (In Thousands)
Service fees =65,325
P =40,055
P
Operating expenses (43,589) (23,278)
Overhead expenses (10,815) (9,206)
Equity in net earnings of associates and joint ventures (9,286) (2,566)
Net income =1,635
P =5,005
P
Net income attributable to:
Parent company =1,443
P =4,420
P
Non-controlling interest 192 585
Increase in basic/diluted earnings per share 0.0005 0.0014
Consolidated Statements of Cash Flows

December 31
2012 2011
Impact on Statements of Cash Flows (In Thousands)
Operating =2,160
P =6,556
P
Investing (201) (305)
Net effect on cash and cash equivalents =1,959
P =6,251
P
PFRS 12, Disclosure of Interests in Other Entities, sets out the requirements for disclosures
relating to an entitys interests in subsidiaries, joint arrangements, associates and structured
entities. The requirements in PFRS 12 are more comprehensive than the previously existing

-7-
disclosure requirements for subsidiaries (for example, where a subsidiary is controlled with
less than a majority of voting rights).
The adoption of PFRS 12 affects disclosures only and has no impact on the Groups financial
position or performance. The additional disclosures required are presented in Note 12 to the
consolidated financial statements.
Amendments to PAS 28, Investments in Associates and Joint Ventures. As a consequence of

the new PFRS 11 and PFRS 12, PAS 28, Investment in Associates, has been renamed PAS 28,
Investments in Associates and Joint Ventures, and describes the application of the equity
method to investments in joint ventures in addition to associates. The adoption of this
amendment has no impact on the Groups consolidated financial statements.
Amendments to PAS 19, Employee Benefits, requires all actuarial gains and losses for the
defined benefits plan to be recognized in other comprehensive income (OCI) and unvested
past service costs previously recognized over the average vesting period to be recognized
immediately in the statement of income when incurred.
Prior to adoption of the revised standard, the Group followed a systematic method that
resulted in faster recognition of actuarial gains and losses, which were recognized in profit or
loss in the period they occur. Further, past service cost was recognized as an expense on a
straight-line basis over the average period until the benefits become vested. Upon adoption of
the revised standard, the Group changed its accounting policy to recognize all actuarial gains
and losses in OCI and all past service costs in the consolidated statement of income in the
period they occur.
In addition, the Revised PAS 19 replaced the interest cost and expected return on plan assets
with the concept of net interest on defined benefit liability or asset, which is calculated by
multiplying the net defined benefit liability or asset at the beginning of the year by the
discount rate used to measure the defined benefit obligation, each at the beginning of the
annual period.
The revised standard also amended the definition of short-term employee benefits and requires
employee benefits to be classified as short-term based on expected timing of settlement rather
than the employees entitlement to the benefits. It also modifies the timing of recognition for
termination benefits, where termination benefits are recognized at the earlier of when the offer
cannot be withdrawn or when the related restructuring costs are recognized.
The changes in the definition of short-term employee benefits did not have any impact to the
Groups financial position and performance.
The opening balance sheet of the earliest comparative period presented (January 1, 2012) and
the comparative figures have been restated accordingly. The effects of adoption on the
consolidated financial statements follow:
December 31 January 1,
2013 2012 2012
(In Thousands)
Increase (decrease) in:
Accrued retirement benefits P
=58,853 =78,613
P =109,443
P
Deferred income tax assets -net (11,630) 23,716 32,833
(Forward)

-8-
2013 2012 2012
(In Thousands)
Other comprehensive loss, net
of deferred income tax
effect P
=91,884 P74,420
= =81,322
P
Deficit (21,401) (19,523) (4,712)
Consolidated Statements of Comprehensive Income

Years Ended December 31
2013 2012 2011
(In Thousands)
Impact on profit or loss:
Operating expenses (P
=213) (P
=4,228) (P
=1,238)
Terminal expenses (744) (6,069) (3,088)
Overhead expenses (1,727) (10,862) (2,761)
Income before income tax 2,684 21,159 7,087
Benefit from income tax 806 6,348 2,126
Increase in net income 1,878 14,811 4,961
Impact on other comprehensive loss:
Remeasurement gains (losses) on accrued
retirement benefits (24,949) 9,860 (38,330)
Income tax effect 7,485 (2,958) 11,499
Other comprehensive loss for the year, net of
deferred income tax effect (17,464) 6,902 (26,831)
Increase (decrease) in total comprehensive
income (P
=15,586) =21,713
P (P
=21,870)
The transition did not have a significant impact on the consolidated statements of cash flows
and earnings per share for the years ended December 31, 2012 and 2011.
Remeasurement losses on accrued retirement benefits are presented separately under other
comprehensive loss. The Revised PAS 19 also requires more extensive disclosures which are
presented in Note 28 to the consolidated financial statements.
PFRS 13, Fair Value Measurement, establishes a single source of guidance under PFRS for all
fair value measurements. PFRS 13 does not change when an entity is required to use fair
value, but rather provides guidance on how to measure fair value under PFRS when fair value
is required or permitted. PFRS 13 also requires additional disclosures.
As a result of the guidance in PFRS 13, the Group reassessed its policies for measuring fair
values. The Group has assessed that the application of PFRS 13 did not materially impact its
fair value measurement. Additional disclosures, where required, are provided in the individual
notes relating to the assets and liabilities whose fair values were determined.
PFRS 7, Financial Instruments: Disclosures - Offsetting Financial Assets and Financial

Liabilities, these amendments require an entity to disclose information about rights of set-off and
related arrangements (such as collateral agreements). The new disclosures are required for all
recognized financial instruments that are set-off in accordance with PAS 32, Financial
Instruments: Presentation and Disclosures. These disclosures also apply to recognized financial
instruments that are subject to an enforceable master netting arrangement or similar
agreement, irrespective of whether they are set-off in accordance with PAS 32. The
amendments require entities to disclose, in a tabular format unless another format is more

-9-
appropriate, the following minimum quantitative information. This is presented separately for
financial assets and financial liabilities recognized at the end of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining
the net amounts presented in the consolidated balance sheet;
c) The net amounts presented in the consolidated balance sheet;
d) The amounts subject to an enforceable master netting arrangement or similar agreement
that are not otherwise included in (b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all of
the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendment affects disclosures only and has no impact on the Groups financial position
or performance.
Amendments to PAS 1, Financial Statement Presentation - Presentation of Items of Other

Comprehensive Income, change the grouping of items presented in OCI. Items that could be
reclassified (or recycled) to profit or loss at a future point in time (for example, upon
derecognition or settlement) would be presented separately from items that will never be
reclassified. The amendments affect presentation only and therefore have no impact on the
Groups financial position or performance.
Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface
Mine, applies to waste removal costs that are incurred in surface mining activity during the
production phase of the mine (production stripping costs) and provides guidance on the
recognition of production stripping costs as an asset and measurement of the stripping activity
asset. This interpretation is not relevant to the Group as the Group is not involved in any
mining activities.
Amendments to PFRS 1, First-time Adoption of International Financial Reporting Standard-

Government Loans, require first-time adopters to apply the requirements of PAS 20,
Accounting for Government Grants and Disclosure of Government Assistance, prospectively
to government loans existing at the date of transition of PFRS. However, entities may choose
to apply the requirements of PAS 39, Financial Instruments: Recognition and Measurement,
and PAS 20 to government loans restrospectively if the information needed to do so had been
obtained at the time of initially accounting for those loans. These amendments are not
relevant to the Group as the Group is not a first time adopter of PFRS.
Annual Improvements to PFRSs (2009-2011 cycle)
The Annual Improvements to PFRSs (2009-2011 cycle) contain non-urgent but necessary
amendments to PFRSs. The amendments are effective for annual periods beginning on or after
January 1, 2013 and are applied retrospectively.
PFRS 1, First-time Adoption of PFRS - Borrowing Costs, clarifies that, upon adoption of
PFRS, an entity that capitalized borrowing costs inaccordance with its previous generally
accepted accounting principle, may carry forward, without any adjustment, the amount
previously capitalized in its opening statement of financial position at the date of transition.
Subsequent to the adoption of PFRS, borrowing costs are recognized in accordance with
PAS 23, Borrowing Cost. The amendment does not apply to the Group as it is not a first-time
adopter of PFRS.

- 10 -
PAS 1, Presentation of Financial Statements - Clarification of the Requirements for

Comparative Information, clarifies the requirements for comparative information that are
disclosed voluntarily and those that are mandatory due to retrospective application of an
accounting policy, or retrospective restatement or reclassification of items in the financial
statements. An entity must include comparative information in the related notes to the
financial statements when it voluntarily provides comparative information beyond the
minimum required comparative period. The additional comparative period does not need to
contain a complete set of financial statements. On the other hand, supporting notes for the
third balance sheet (mandatory when there is a retrospective application of an accounting
policy, or retrospective restatement or reclassification of items in the financial statements) are
not required. The amendments affect disclosures only and have no impact on the Groups
financial position or performance.
PAS 16, Property, Plant and Equipment - Classification of Servicing Equipment, clarifies that
spare parts, stand-by equipment and servicing equipment should be recognized as property,
plant and equipment when they meet the definition of property, plant and equipment and
should be recognized as inventory if otherwise. The amendment has no impact on thr Groups
PAS 32, Financial Instruments: Presentation - Tax Effect of Distribution to Holders of Equity
Instruments, clarifies that income taxes relating to distributions to equity holders and to
transaction costs of an equity transaction are accounted for in accordance with
PAS 12, Income Taxes. The Group assessed that this amendment has no impact on its
PAS 34, Interim Financial Reporting - Interim Financial Reporting and Segment Information
for Total Assets and Liabilities, clarifies that the total assets and liabilities for a particular
reportable segment need to be disclosed only when the amounts are regularly provided to the
chief operating decision maker and there has been a material change from the amount
disclosed in the entitys previous annual financial statements for that reportable segment. The
amendment affects the interim financial reporting disclosures only and has no impact on the
New Accounting Standards, Amendments and Interpretations to

Existing Standards Effective Subsequent to December 31, 2013 .
The Group will adopt the standards, interpretations and amendments enumerated below when
these become effective. The Group continues to assess the impact of the following new and
amended accounting standards and interpretations. Except as otherwise indicated, the Group does
not expect the adoption of these new and amended PFRSs and Philippine Interpretations to have
significant impact on its consolidated financial statements. The relevant disclosures will be
included in the notes to the consolidated financial statements when these become effective.
Effective in 2014
Amendments to PFRS 10, PFRS 12 and PAS 27 - Investment Entities, provide an exception to
the consolidation requirement for entities that meet the definition of an investment entity
under PFRS 10. The exception to consolidation requires investment entities to account for
subsidiaries at fair value through profit or loss. It is not expected that this amendment will be
relevant to the Group since none of the entities in the Group will qualify as an investment
entity under PFRS 10.

- 11 -
Amendments to PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets

and Financial Liabilities, clarify the meaning of currently has a legally enforceable right to
set-off and also clarify the application of the PAS 32 offsetting criteria to settlement systems
(such as central clearing house systems) which apply gross settlement mechanisms that are not
simultaneous. The amendments will affect presentation only and will have no impact on the
Amendments to PAS 36, Impairment of Assets - Recoverable Amount Disclosures for

Nonfinancial Assets, remove the unintended consequence of PFRS 13 on the disclosures
required under PAS 36. In addition, these amendments require disclosure of the recoverable
amounts for the assets or cash-generating units (CGUs) for which impairment loss has been
recognized or reversed during the period. The Group did not early adopt these amendments.
These amendments will affect disclosures only and will have no impact on the Groups
PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and
Continuation of Hedge Accounting, provides relief from discontinuing hedge accounting when
novation of a derivative designated as a hedging instrument meets certain criteria. These
amendments are effective for annual periods beginning on or after January 1, 2014. The
amendments are not expected to have an impact on the Groups financial position or
performance.
Philippine Interpretation IFRIC 21, Levies, clarifies that an entity recognizes a liability for a
levy when the activity that triggers payment, as identified by the relevant legislation, occurs.
For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that
no liability should be anticipated before the specified minimum threshold is reached. The
Group does not expect that IFRIC 21 will have a material financial impact on its future
financial statements.
Effective in 2015
Amendments to PAS 19, Employee Benefits - Defined Benefit Plans: Employee Contributions,
apply to contributions from employees or third parties to defined benefit plans. Contributions
that are set out in the formal terms of the plan shall be accounted for as reductions to current
service costs if they are linked to service or as part of the remeasurements of the net defined
benefit asset or liability if they are not linked to service. Contributions that are discretionary
shall be accounted for as reductions of current service cost upon payment of these
contributions to the plans. The amendments will not have any significant impact on the
financial statements of the Group as majority of its retirement plans are noncontributory.
Further, the employee contributions from the contributory defined benefit plan is currently
recognized as reduction against total retirement costs.

amendments to the following standards:
PFRS 2, Share-based Payment - Definition of Vesting Condition, revised the definitions of

vesting condition and market condition and added the definitions of performance condition
and service condition to clarify various issues. This amendment does not apply to the Group as
it has no share-based payments.
PFRS 3, Business Combinations - Accounting for Contingent Consideration in a Business

Combination, clarifies that a contingent consideration that meets the definition of a financial
instrument should be classified as a financial liability or as equity in accordance with PAS 32.

- 12 -
Contingent consideration that is not classified as equity is subsequently measured at fair value
through profit or loss whether or not it falls within the scope of PFRS 9 (or PAS 39, if PFRS 9
is not yet adopted). The Group shall consider this amendment for future business
combinations.
PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation of the

Total of the Reportable Segments Assets to the Entitys Assets, requires entities to disclose the
judgment made by management in aggregating two or more operating segments. This
disclosure should include a brief description of the operating segments that have been
aggregated in this way and the economic indicators that have been assessed in determining
that the aggregated operating segments share similar economic characteristics. The
amendments also clarify that an entity shall provide reconciliations of the total of the
reportable segments assets to the entitys assets if such amounts are regularly provided to the
chief operating decision maker are applied retrospectively. The amendments will affect
disclosures only and will have no impact on the Groups financial position or performance.
PFRS 13, Fair Value Measurement - Short-term Receivables and Payables, clarifies that
short-term receivables and payables with no stated interest rates can be held at invoice
amounts when the effect of discounting is immaterial. This amendment is effective
immediately. The amendments will have no impact on the Groups financial position and
performance.
PAS 16, Property, Plant and Equipment - Revaluation Method - Proportionate Restatement of
Accumulated Depreciation, clarifies that, upon revaluation of an item of property, plant and
equipment, the carrying amount of the asset shall be adjusted to the revalued amount, and the
asset shall be treated in one of the following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated depreciation at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated depreciation is eliminated against the gross carrying amount of the asset.
The amendments shall apply to all revaluation recognized in annual periods beginning on or
after the date of initial application of this amendment and in the immediately preceding annual
period. The amendment will have no impact on the Groups financial position or performance
since the Group does not have any related revalued property, plant and equipment.
PAS 24, Related Party Disclosures - Key Management Personnel, clarifies that an entity is a
related party of the reporting entity if the said entity, or any member of a group for which it is
a part of, provides key management personnel services to the reporting entity or to the parent
company of the reporting entity. The amendments also clarify that a reporting entity that
obtains management personnel services from another entity (also referred to as management
entity) is not required to disclose the compensation paid or payable by the management entity
to its employees or directors. The reporting entity is required to disclose the amounts incurred
for the key management personnel services provided by a separate management entity. The
amendments will affect disclosures only and will have no impact on the Groups financial
position or performance.

- 13 -
PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement of Accumulated

Amortization, clarifies that, upon revaluation of an intangible asset, the carrying amount of the
asset shall be adjusted to the revalued amount, and the asset shall be treated in one of the
following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated amortization at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated amortization is eliminated against the gross carrying amount of the asset.
The amendments also clarify that the amount of the adjustment of the accumulated
amortization should form part of the increase or decrease in the carrying amount accounted for
in accordance with the standard. The amendments will have no impact on the Groups

amendments to the following standards:
PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Meaning of

Effective PFRSs, clarifies that an entity may choose to apply either a current standard or a
new standard that is not yet mandatory, but that permits early application, provided either
standard is applied consistently throughout the periods presented in the entitys first PFRS
financial statements. This amendment is not applicable to the Group as it is not a first-time
adopter of PFRS.
PFRS 3, Business Combinations - Scope Exceptions for Joint Arrangements, clarifies that
PFRS 3 does not apply to the accounting for the formation of a joint arrangement in the
financial statements of the joint arrangement itself. This amendment will not have any impact
on the Groups financial position or performance.
PFRS 13, Fair Value Measurement - Portfolio Exception, clarifies that the portfolio exception
in PFRS 13 can be applied to financial assets, financial liabilities and other contracts. The
amendment has no significant impact on the Groups financial position or performance.
PAS 40, Investment Property, clarifies the interrelationship between PFRS 3 and PAS 40
when classifying property as investment property or owner-occupied property. The
amendment stated that judgment is needed when determining whether the acquisition of
investment property is the acquisition of an asset or a group of assets or a business
combination within the scope of PFRS 3. This judgment is based on the guidance of PFRS 3.
The amendment will have no significant impact on the Groups financial position or
performance.
New Standard with No Mandatory Effective Date

PFRS 9, Financial Instruments, as issued, reflects the first and third phases of the project to
replace PAS 39 and applies to the classification and measurement of financial assets and
liabilities and hedge accounting, respectively. Work on the second phase, which relate to
impairment of financial instruments, and the limited amendments to the classification and

- 14 -
measurement model is still ongoing, with a view to replace PAS 39 in its entirety. PFRS 9
requires all financial assets to be measured at fair value at initial recognition. A debt financial
asset may, if the fair value option (FVO) is not invoked, be subsequently measured at
amortized cost if it is held within a business model that has the objective to hold the assets to
collect the contractual cash flows and its contractual terms give rise, on specified dates, to
cash flows that are solely payments of principal and interest on the principal outstanding. All
other debt instruments are subsequently measured at fair value through profit or loss. All
equity financial assets are measured at fair value either through OCI or profit or loss. Equity
financial assets held for trading must be measured at fair value through profit or loss. For
liabilities designated as at FVPL using the FVO, the amount of change in the fair value of a
liability that is attributable to changes in credit risk must be presented in OCI. The remainder
of the change in fair value is presented in profit or loss, unless presentation of the fair value
change relating to the entitys own credit risk in OCI would create or enlarge an accounting
mismatch in profit or loss. All other PAS 39 classification and measurement requirements for
financial liabilities have been carried forward to PFRS 9, including the embedded derivative
bifurcation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9
will have an effect on the classification and measurement of the Groups financial assets, but
will potentially have no impact on the classification and measurement of financial liabilities.
On hedge accounting, PFRS 9 replaces the rules-based hedge accounting model of PAS 39
with a more principles-based approach. Changes include replacing the rules-based hedge
effectiveness test with an objectives-based test that focuses on the economic relationship
between the hedged item and the hedging instrument, and the effect of credit risk on that
economic relationship; allowing risk components to be designated as the hedged item, not
only for financial items, but also for nonfinancial items, provided that the risk component is
separately identifiable and reliably measurable; and allowing the time value of an option, the
forward element of a forward contract and any foreign currency basis spread to be excluded
from the designation of a financial instrument as the hedging instrument and accounted for as
costs of hedging. PFRS 9 also requires more extensive disclosures for hedge accounting.
PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the
completion of the limited amendments to the classification and measurement model and
impairment methodology. The Group will not adopt the standard before the completion of the
limited amendments and the second phase of the project. The Group shall conduct another
impact evaluation in early 2014 using the consolidated financial statements for the year ended
December 31, 2014.
Deferred
Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate, covers
accounting for revenue and associated expenses by entities that undertake the construction of
real estate directly or through subcontractors. The Philippine SEC and the Financial
Reporting Standards Council (FRSC) have deferred the effectivity of this interpretation until
the final Revenue standard is issued by the International Accounting Standards Board and an
evaluation of the requirements of the final Revenue standard against the practices of the
Philippine real estate industry is completed. The adoption of the interpretation when it
becomes effective will not have any impact on the consolidated financial statements of the
Group.

- 15 -
Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Parent Company
and the following wholly-owned and majority-owned subsidiaries, all incorporated in the
Philippines, as at December 31 of each year:
Percentage of ownership
Nature of business 2013 2012 2011
Supercat Fast Ferry Corp. (SFFC) Transporting passenger 100.0 100.0 100.0
Special Container and Value Added
Services, Inc. (SCVASI) (1) Transportation/logistics 100.0 100.0
2GO Express, Inc. (2GO Express) Transportation/logistics 100.0 100.0 100.0
2GO Logistics, Inc. (2GO Logistics) Transportation/logistics 100.0 100.0 100.0
Scanasia Overseas, Inc. (SOI) Distribution 100.0 100.0 100.0
Hapag-Lloyd Philippines, Inc. (HLP) (2) Transportation/logistics 100.0 85.0 85.0
WRR Trucking Corporation (WTC) Transportation 100.0 100.0 100.0
NN-ATS Logistics Management and
Holding Co., Inc. (NALMHCI)(3) Holding and logistics management 100.0 100.0 100.0
J&A Services Corporation (JASC) Vessel support services 100.0 100.0 100.0
Red.Dot Corporation (RDC) Manpower services 100.0 100.0 100.0
North Harbor Tugs Corporation (NHTC) Tug assistance 58.9 58.9 58.9
Super Terminals, Inc. (STI)(4) Passenger terminal operator 50.0 50.0 50.0
Sungold Forwarding Corporation (SFC) Transportation/logistics 51.0 51.0 51.0
Supersail Services, Inc. (SSI) Manpower provider and vessel support
services 100.0 100.0 100.0
Astir Engineering Works, Inc. (AEWI) (5) Engineering services 100.0 100.0 85.0
United South Dockhandlers Inc. (USDI)(6) Arrastre and Stevedoring 48.0 48.0 48.0
W G & A Supercommerce, Inc. (WSI) (7) Vessels hotel management 100.0 100.0 100.0
(1) SCVASI was incorporated on March 9, 2012 and started its commercial operation on January 1, 2013.
(2) In 2013, 2GO Express acquired additional 15% ownership interest in HLP, thus, making HLP a 100%-owned subsidiary.
(3) On November 22, 2011, NALMHCI, a wholly-owned subsidiary of 2GO, was incorporated to be the holding company of JASC,
RDC, NHTC, STI, SFC and SSI effective December 1, 2011.
(4) NALMHCI has control over STI since it has the power to cast the majority of votes at the BODs meeting and the power to gover n
the financial and reporting policies of STI.
(5) In 2013, NN ownership in AEWI was transferred to NALMHCI.
(6) In 2013, upon adoption of PFRS 11, USDI being a joint operation with 48% interest is now being consolidated
(7) WSI ceased operations in February 2006.
The financial statements of the subsidiaries are prepared for the same reporting year as the
Company using consistent accounting policies.
Subsidiaries are all entities over which the Group has control. Control is achieved when the Group
is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect that return through its power over the investee. Specifically, the Group controls an
investee if and only if the Group has:
Power over the investee (i.e., existing rights that give it the current ability to direct the relevant
activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Groups voting rights and potential voting rights

- 16 -
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included or excluded in the consolidated financial statements from
the date the Group gains control or until the date the Group ceases to control the subsidiary.
Non-controlling interest represents a portion of profit or loss and net assets of subsidiaries not held
by the Group, directly or indirectly, and are presented separately in the consolidated statement of
income and within the equity section in the consolidated balance sheet and consolidated statement
of changes in equity, separately from the Companys equity. However, the Group must recognize
in the consolidated balance sheet a financial liability (rather than equity) when it has an obligation
to pay cash in the future (e.g., acquisition of non-controlling interest is required in the contract or
regulation) to purchase the non-controllings shares, even if the payment of that cash is conditional
on the option being exercised by the holder. The Group will reclassify the liability to equity if a
put option expires unexercised.
Non-controlling interest shares in losses, even if the losses exceed the non-controlling equity
interest in the subsidiary. Changes in the controlling ownership interest, i.e., acquisition of non-
controlling interest or partial disposal of interest over a subsidiary that do not result in a loss of
control, are accounted for as equity transactions.
Consolidated financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances. All intra-group balances, transactions,
income and expenses and profits and losses resulting from intra-group transactions that are
recognized in assets, liabilities and equities, are eliminated in full on consolidation.
A change in ownership interest in a subsidiary without a loss of control is accounted for as an

equity transaction. If the Group loses control over a subsidiary, it:
Derecognizes the assets (including goodwill) and liabilities of the subsidiary

Derecognizes the carrying amount of any non-controlling interest
Derecognizes the related other comprehensive income like cumulative translation differences,
recorded in equity
Recognizes the fair value of the consideration received
Recognizes the fair value of any investment retained
Recognizes any surplus or deficit in profit or loss
Reclassifies the parents share of components previously recognized in other comprehensive
income to profit or loss or retained earnings, as appropriate, as would be required if the Group
had directly disposed of the related assets or liabilities.
Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration transferred, measured at acquisition date fair
value and the amount of any non-controlling interest in the acquiree. For each business
combination, the Group elects whether to measure the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the acquirees identifiable net assets.
Acquisition-related costs are expensed as incurred and are included in operating expenses.

- 17 -
When the Group acquires a business, it assesses the financial assets and financial liabilities
assumed for appropriate classification and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the acquisition date. This includes the
separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirers
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date
through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at
the acquisition date. Subsequent changes to the fair value of the contingent consideration, which
is deemed to be an asset or liability, will be recognized in accordance with PAS 39 either in profit
or loss or as a change to OCI. If the contingent consideration is not within the scope of PAS 39, it
is measured in accordance with the appropriate PFRS. Contingent consideration that is classified
as equity is not re-measured and subsequent settlement is accounted for within equity.
Goodwill acquired in a business combination is initially measured at cost, being the excess of the
aggregate of the consideration transferred and the amount recognized for non-controlling interest,
and any previous interest held, over the fair values of net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the net assets of the subsidiary
acquired, the Group reassesses whether it has correctly identified all of the assets acquired and all
of the liabilities assumed and reviews the procedures used to measure the amounts to be
recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of
net assets acquired over the aggregate consideration transferred, then the gain is recognized in
profit or loss. After initial recognition, goodwill is measured at cost less any accumulated
impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Groups cash-generating units (CGU) that are expected to
benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
Where goodwill forms part of a CGU or a group of CGUs and part of the operation within that
unit is disposed of, the goodwill associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain or loss on disposal of the operation.
Goodwill disposed of in this circumstance is measured based on the relative values of the
operation disposed of and the portion of the CGU retained.
When subsidiaries are sold, the difference between the selling price and the net assets plus any
other comprehensive income, and fair value of retained interest is recognized in profit or loss.
Where there are business combinations in which all the combining entities within the Group are
ultimately controlled by the same ultimate parties before and after the business combination and
that the control is not transitory (business combinations under common control), the Group
accounts for such business combinations under the acquisition method of accounting, if the
transaction was deemed to have substance from the perspective of the reporting entity. In
determining whether the business combination has substance, factors such as the underlying
purpose of the business combination and the involvement of parties other than the combining
entities such as the non-controlling interest, shall be considered.

- 18 -
In cases where the business combination has no substance, the Group accounts for the transaction
similar to a pooling of interests. The assets and liabilities of the acquired entities and that of the
Company are reflected at their carrying values. Comparatives shall be restated to include balances
and transactions as if the entities had been acquired at the beginning of the earliest period
presented and as if the companies had always been combined.
Investments in Associates and Joint Ventures
The following are the associates and joint ventures of the Group as at December 31, 2013 and
2012:
Effective percentage of
Ownership
Nature of Business 2013 2012
Associates:
MCC Transport Philippines (MCCP) Container transportation 33.0% 33.0%
Hansa-Meyer ATS Projects, Inc. (HATS) Project logistics and
consultancy 50.0% 50.0 %
Joint Ventures:
KLN Holdings (KLN)(1) Holding Company 78.4% 78.4%
Kerry-ATS Logistics, Inc. (KALI) International freight and
cargo forwarding 62.5% 62.5%
(1) KLN is 78.4% owned by 2GO Express.
An associate is an entity over which the Group has significant influence. Significant influence is
the power to participate in the financial and operating policy decisions of the investee, but has no
control or joint control over those policies.
A joint arrangement is a contractual arrangement whereby two or more parties undertake an
economic activity that is subject to joint control. A joint venture is a type of joint arrangement
where the parties that have joint control of the arrangement and have rights over the net assets of
the joint venture.
The considerations made in determining significant influence or joint control are similar to those
necessary to determine control over subsidiaries.
Investments in associates and joint ventures (investee companies) are accounted for under the
equity method of accounting. An investment is accounted for using the equity method from the
day it becomes an associate or joint venture. On acquisition of investment, the excess of the cost
of investment over the investors share in the net fair value of the investees identifiable assets,
liabilities and contingent liabilities is accounted for as goodwill and included in the carrying
amount of the investment and not amortized. Any excess of the investors share of the net fair
value of the investees identifiable assets, liabilities and contingent liabilities over the cost of the
investment is excluded from the carrying amount of the investment, and is instead included as
income in the determination of the share in the earnings of the investees.
Under the equity method, the investments in the investee companies are carried in the consolidated
balance sheet at cost plus post-acquisition changes in the Groups share in the net assets of the
investee companies, less any impairment in values. The consolidated statement of income reflects
the share of the results of the operations of the investee companies. The Groups share of post-
acquisition movements in the investees equity reserves is recognized directly in equity. Profits
and losses resulting from transactions between the Group and the investee companies are
eliminated to the extent of the interest in the investee companies and for unrealized losses to the
extent that there is no evidence of impairment of the asset transferred. Dividends received are
treated as a reduction of the carrying value of the investment.

- 19 -
The Group discontinues applying the equity method when their investments in investee companies
are reduced to zero. Accordingly, additional losses are not recognized unless the Group has
guaranteed certain obligations of the investee companies. When the investee companies
subsequently report net income, the Group will resume applying the equity method but only after
its share of that net income equals the share of net losses not recognized during the period the
equity method was suspended.
The reporting dates of the investee companies and the Group are identical and the investee
companies accounting policies conform to those used by the Group for like transactions and
events in similar circumstances.
Upon loss of significant influence over the associate, the Group measures and recognizes any
retaining investment at its fair value. Any difference between the carrying amount of the associate
upon loss of significant influence and the fair value of the retaining investment and proceeds from
disposal is recognized in the consolidated statement of income.
Interest in a Joint Operation

The Group has an interest in a joint operation which is a jointly controlled entity, whereby the
joint venture partners have a contractual arrangement that establishes joint control over the
economic activities of the entity. Upon adoption of PFRS 11, the assets, liabilities, revenues and
expenses relating to its interest in the joint operation have been retrospectively recognized in the
consolidated financial statements of the Group.
Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash, with original maturities of
three months or less, and are subject to an insignificant risk of change in value.
Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
In the principal market for the asset or liability, or

In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a nonfinancial asset takes into account a market participants ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

- 20 -
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
For assets and liabilities that are recognized in the consolidated financial statements on a recurring
basis, the Group determines whether transfers have occurred between Levels in the hierarchy by
reassessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the assets or liability and the level of the fair
value hierarchy.
Financial Instruments
Initial recognition
Financial assets and financial liabilities are recognized in the consolidated balance sheet when
the Group becomes a party to the contractual provisions of the instrument. Purchases or
sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the marketplace (regular way purchases or sales) are recognized
on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
Financial instruments are recognized initially at fair value, which is the fair value of the
consideration given (in case of an asset) or received (in case of a liability). If part of consideration
given or received is for something other than the financial instrument, the fair value of the
financial instrument is estimated using a valuation technique. The initial measurement of financial
instruments, except for those financial assets and liabilities at fair value through profit or loss
(FVPL), includes transaction costs.
Classification of financial instruments

On initial recognition, the Group classifies its financial assets in the following categories: financial
assets at FVPL, loans and receivables, held-to-maturity (HTM) investments and AFS investments.
The Group also classifies its financial liabilities into FVPL and other financial liabilities. The
classification depends on the purpose for which the investments are acquired and whether they are
quoted in an active market. Management determines the classification of its financial assets and
financial liabilities at initial recognition and, where allowed and appropriate, reevaluates such
designation at the end of each reporting period.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument or a
component that is a financial liability are reported as expense or income. Distributions to holders
of financial instruments classified as equity are charged directly to equity, net of any related
income tax benefits.
The Group has no financial assets classified as FVPL and HTM investments.

- 21 -
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market, they are not entered into with the intention of
immediate or short-term resale and are not designated as AFS investments or financial assets
at FVPL. Loans and receivables are carried at amortized cost using the effective interest
method, less allowance for impairment. Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees that are integral part of the effective interest
rate. Gains and losses are recognized in profit or loss when the loans and receivables are
derecognized or impaired, as well as through the amortization process. Loans and receivables
are included in current assets if maturity is within 12 months from the end of reporting period.
As at March 31, 2014 and December 31, 2013, financial assets included under this classification
are the Groups cash in banks, cash equivalents, trade and other receivables and refundable
deposits (presented as part of Other noncurrent assets in the consolidated balance sheet).
AFS investments
AFS investments are those non-derivative financial assets which are designated as such or do not
qualify to be classified as financial assets designated at FVPL, HTM investments or loans and
receivables. They are purchased and held indefinitely, and may be sold in response to liquidity
requirements or changes in market conditions. After initial measurement, AFS investments are
measured at fair value with unrealized gains or losses recognized in the consolidated statement of
comprehensive income and consolidated statement of changes in equity in the Unrealized gain or
loss on AFS investments until the AFS investments is derecognized, at which time the cumulative
gain or loss recorded in equity is recognized in profit or loss. Assets under this category are classified
as current assets if expected to be realized within 12 months from the end of reporting period and as
noncurrent assets if maturity date is more than a year from the end of reporting period.
As at March 31, 2014 and December 31, 2013, the Groups AFS investments include investments in
quoted and unquoted shares of stock and club shares.
Other financial liabilities

This classification pertains to financial liabilities that are not designated as at FVPL upon the
inception of the liability. Included in this category are liabilities arising from operations or
borrowings.
The financial liabilities are recognized initially at fair value and are subsequently carried at amortized
cost, taking into account the impact of applying the effective interest method of amortization (or
accretion) for any related premium (discount) and any directly attributable transaction costs.
As at March 31, 2014 and December 31, 2013, financial liabilities included in this classification are
the Groups loans payable, trade and other payables, long-term debts, obligations under finance
lease, restructured debts, redeemable preferred shares of a subsidiary and other noncurrent liabilities.
Classification of Financial Instruments between Debt and Equity

Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest relating to a financial instrument or a component that is a financial
liability is reported as expenses.
A financial instrument is classified as debt if it provides for a contractual obligation to:
deliver cash or another financial asset to another entity; or

- 22 -
exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Group; or
satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.
If the Group does not have an unconditional right to avoid delivering cash or another financial
asset to settle its contractual obligation, the obligation meets the definition of a financial
liability.
The components of issued financial instruments that contain both liability and equity elements are
accounted for separately, with the equity component being assigned the residual amount after
deducting from the instrument as a whole the amount separately determined as the fair value of the
liability component on the date of issue.
Redeemable preferred shares (RPS)

The component of the RPS that exhibits characteristics of a liability is recognized as a liability in
the consolidated balance sheet, net of transaction costs. The corresponding dividends on those
shares are charged as interest expense in profit or loss. On issuance of the RPS, the fair value of
the liability component is determined using a market rate for an equivalent non-convertible bond
and this amount is carried as a long term liability on the amortized cost basis until extinguished on
conversion or redemption.
Day 1 Difference
Where the transaction price in a non-active market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Group recognizes the difference
between the transaction price and fair value (a Day 1 profit and loss) in profit or loss unless it
qualifies for recognition as some other type of asset. In cases where use is made of data which is
not observable, the difference between the transaction price and model value is only recognized in
profit or loss when the inputs become observable or when the instrument is derecognized. For
each transaction, the Group determines the appropriate method of recognizing the Day 1 profit or
loss amount.
Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount reported in the
consolidated balance sheet if, and only if, there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets
and settle the liabilities simultaneously. This is not generally the case with master netting
agreements, and the related assets and liabilities are presented at gross amounts in the consolidated
balance sheet.
Derecognition of Financial Assets and Liabilities

Financial asset
A financial asset (or, where applicable a part of a financial asset or part of a group of similar
financial assets) is derecognized when:
the rights to receive cash flows from the asset have expired; or
the Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay them in full without material delay to a third party under a pass-through
arrangement; or

- 23 -
the Group has transferred its rights to recline cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the
Groups continuing involvement in the asset. Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Group could be required to repay.
In such case, the Group also recognizes an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Group
has retained.
Financial liability
A financial liability is derecognized when the obligation under the liability is discharged,
cancelled or has expired.
When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognized in profit or loss.
Impairment of Financial Assets

The Group assesses at the end of each reporting period whether a financial asset or group of
financial assets is impaired.

For loans and receivables carried at amortized cost, the Group first assesses individually whether
objective evidence of impairment exists for financial assets that are individually significant, or
collectively for financial assets that are not individually significant. If the Group determines that
no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the asset is included in a group of financial assets with similar credit risk
characteristics and that group of financial assets is collectively assessed for impairment. Assets
that are individually assessed for impairment and for which an impairment loss is or continues to
be recognized are not included in a collective assessment of impairment.
If there is an objective evidence that an impairment loss has been incurred, the amount of the loss
is measured as the difference between the assets carrying amount and the present value of
estimated future cash flows (excluding future expected credit losses that have not yet been
incurred). The carrying amount of the asset is reduced through the use of an allowance account
and the amount of the loss is recognized in profit or loss. Interest income continues to be accrued
on the reduced carrying amount based on the original effective interest rate of the financial asset.
Loans together with the associated allowance are written off when there is no realistic prospect of
future recovery and all collateral has been realized or has been transferred to the Group. If, in a
subsequent period, the amount of the impairment loss increases or decreases because of an event
occurring after the impairment was recognized, the previously recognized impairment loss is
increased or decreased by adjusting the allowance account. Any subsequent reversal of an
impairment loss is recognized in profit or loss, to the extent that the carrying value of the asset
does not exceed its amortized cost at the reversal date.

- 24 -
Assets carried at cost

If there is an objective evidence that an impairment loss on an unquoted equity instrument that is
not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset
that is linked to and must be settled by delivery of such an unquoted equity instrument has been
incurred, the amount of the loss is measured as the difference between the assets carrying amount
and the present value of estimated future cash flows discounted at the current market rate of return
for a similar financial asset.
AFS investments
For AFS investments, the Group assesses at the end of each reporting period whether there is
objective evidence that an investment or group of investment is impaired.
In the case of equity investments classified as AFS investments, objective evidence of impairment
would include a significant or prolonged decline in the fair value of the investments below its cost.
The Group treats significant generally as 20% or more and prolonged as greater than 12
months for quoted equity securities. Where there is evidence of impairment, the cumulative loss
(measured as the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognized in profit or loss) is removed from
equity and recognized in profit or loss. Impairment losses on equity investments are not reversed
through profit or loss. Increases in fair value after impairment are recognized in OCI.
In the case of debt instruments classified as AFS investments, impairment is assessed based on the
same criteria as financial assets carried at amortized cost. Future interest income is based on the
reduced carrying amount and is accrued based on the rate of interest used to discount future cash
flows for the purpose of measuring impairment loss. Such accrual is recorded as part of Interest
income in profit or loss. If, in subsequent period, the fair value of a debt instrument increased
and the increase can be objectively related to an event occurring after the impairment loss was
recognized in profit or loss, the impairment loss is reversed through profit or loss.
Inventories
Inventories are valued at the lower of cost and net realizable value (NRV). Cost comprises all cost
of purchase and other costs incurred in bringing the inventories to their present location or
condition. Cost is determined using weighted average method for trading goods, moving average
method for materials, parts and supplies, flight equipment, expendable parts and supplies, and the
first-in, first-out method for truck and trailer expendable parts, fuel, lubricants and spare parts.
NRV of the trading goods is the estimated selling price in the ordinary course of business, less
estimated costs necessary to make the sale. NRV of materials and supplies is the current
replacement cost. An allowance for inventory obsolescence is provided for damaged goods based
on analysis and physical inspection.
Asset Held for Sale and Discontinued Operation

Assets and disposal groups classified as held for sale are measured at the lower of carrying amount
and fair value less costs to sell. Noncurrent assets and disposal groups are classified as held for
sale if their carrying amount will be recovered principally through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale is highly probable
and the asset or disposal group is available for immediate sale in its present condition.
Management must be committed to the sale which should be expected to qualify for recognition as
a completed sale within 12 months from the date of classification.
Property and equipment once classified as held for sale are not depreciated or amortized. If there
are changes to a plan of sale, and the criteria for the asset or disposal group to be classified as held
for sale are no longer met, the Group ceases to classify the asset or disposal group as held for sale

- 25 -
and it shall be measured at the lower of: (a) its carrying amount before the asset was classified as
held for sale adjusted for any depreciation, amortization or revaluations that would have been
recognized had the asset not been classified as held for sale, and (b) its recoverable amount at the
date of the subsequent decision not to sell.
The Group includes any required adjustment to the carrying amount of a noncurrent asset or
disposal group that ceases to be classified as held for sale in profit or loss from continuing
operations in the period in which the criteria for the asset or disposal group to be classified as held
for sale are no longer met. The Group presents that adjustment in the same caption in profit or
loss used to present a gain or loss recognized, if any.
In the consolidated statement of income of the reporting period, and of the comparable period of
the previous year, income and expenses from discontinued operations are reported separately from
normal income and expenses down to the level of profit after taxes, even when the Group retains a
non-controlling interest in the asset after the sale. The resulting profit or loss (after taxes) is
reported separately in profit or loss.
Property and Equipment
Property and equipment, other than land, are carried at cost, less accumulated depreciation,
amortization and impairment losses, if any. The initial cost of property and equipment consists of
its purchase price and costs directly attributable to bringing the asset to its working condition for
its intended use. When significant parts of property and equipment are required to be replaced in
intervals, the Group recognizes such parts as individual assets with specific useful lives and
depreciation, respectively. Land is carried at cost less accumulated impairment losses.
Subsequent expenditures relating to an item of property and equipment that have already been
recognized are added to the carrying amount of the asset when the expenditure have resulted in an
increase in future economic benefits, in excess of the originally assessed standard of performance
of the existing asset, that will flow to the Group. Expenditures for repairs and maintenance are
charged to the operations during the year in which they are incurred.
Drydocking costs, consisting mainly of engine overhaul, replacement of steel plate of the vessels
hull and related expenditures, are capitalized as a separate component of Vessels in operations.
When significant drydocking costs are incurred prior to the end of the amortization period, the
remaining unamortized balance of the previous drydocking cost is charged against profit or loss.
Vessels under refurbishment, if any, include the acquisition cost of the vessels, the cost of ongoing
refurbishments and other direct costs. Construction in progress represents structures under
construction and is stated at cost. This includes cost of construction and other direct costs.
Borrowing costs that are directly attributable to the refurbishment of vessels and construction of
property and equipment are capitalized during the refurbishment and construction period. Vessels
under refurbishment and construction in progress are not depreciated until such time the relevant
assets are complete and available for use. Refurbishments of existing vessels are capitalized as
part of vessel improvements and depreciated at the time the vessels are put back into operation.
Vessel on lay-over, if any, represents vessel for which drydocking has not been done pending
availability of the necessary spare parts. Such vessels, included under the Property and
equipment account in the consolidated balance sheet are stated at cost less accumulated
depreciation and any impairment in value.

- 26 -
Depreciation and amortization are computed using the straight-line method over the following
estimated useful lives of the property and equipment:
Number of Years
Vessels in operation, excluding drydocking costs and
vessel equipment and improvements 15 - 30
Drydocking costs 2-5
Vessel equipment and improvements 3-5
Containers and reefer vans 5 - 10
Terminal and handling equipment 5 - 10
Furniture and other equipment 3-5
Land improvements 5 - 10
Buildings and warehouses 5 - 20
Transportation equipment 5 - 10
Leasehold improvements are amortized over their estimated useful lives of 5-20 years or the term
of the lease, whichever is shorter. Flight equipment is depreciated based on the estimated number
of flying hours.
Depreciation or amortization commences when an asset is in its location or condition capable of

being operated in the manner intended by management. Depreciation or amortization ceases at the
earlier of the date that the item is classified as held for sale in accordance with PFRS 5,
Noncurrent Assets Held for Sale and Discontinued Operations, and the date the asset is
derecognized.
The assets residual values, useful lives and depreciation and amortization methods are reviewed
at each reporting period, and adjusted prospectively if appropriate.
When property and equipment are sold or retired, their cost and accumulated depreciation and
amortization and any allowance for impairment in value are eliminated from the accounts and any
gain or loss resulting from their disposal is included in profit or loss. Fully depreciated assets are
retained in the accounts until these are no longer in use.
Investment Property
Investment property, consisting of a parcel of land of 2GO Express, is measured at cost less any
impairment in value. The Group used the fair value of the land as the cost in the consolidated
financial statements at the date the Company acquired 2GO Express.
Subsequent costs are included in the assets carrying amount only when it is probable that future
economic benefits associated with the asset will flow to the Group and the cost of the item can be
measured reliably.
Derecognition of an investment property will be triggered by a change in use or by sale or

disposal. Gain or loss arising on disposal is calculated as the difference between any disposal
proceeds and the carrying amount of the related asset, and is recognized in the consolidated
statement of income. Transfers are made to investment property when, and only when, there is
change in use, evidenced by cessation of owner-occupation, commencement of an operating lease
to another party or completion of construction or development, transfers are made from investment
property when, and only when, there is a change in used, evidenced by commencement of owner-
occupation or commencement of development with a view to sale.

- 27 -
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is its fair value as at the date of the
acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated
amortization and any accumulated impairment losses. Internally generated intangible assets,
excluding capitalized development costs, are not capitalized and expenditure is reflected in profit
or loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite.
Software development costs

Software development costs are initially recognized at cost. Following initial recognition, the
software development costs are carried at cost less accumulated amortization and any accumulated
impairment in value.
The software development costs is amortized on a straight-line basis over its estimated useful
economic life of three to five years and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortization commences when the software
development costs is available for use. The amortization period and the amortization method for
the software development costs are reviewed at each reporting period. Changes in the estimated
useful life is accounted for by changing the amortization period or method, as appropriate, and
treated as changes in accounting estimates. The amortization expense is recognized in profit or
loss in the expense category consistent with the function of the software development costs.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment
annually either individually or at the cash generating unit level. The assessment of indefinite life
is reviewed annually to determine whether the indefinite life continues to be supportable. If not,
the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in
profit or loss when the asset is derecognized.
Impairment of Nonfinancial Assets

The Group assesses at the end of each reporting period whether there is an indication that
nonfinancial asset may be impaired. If any such indication exists, or when annual impairment
testing for nonfinancial asset is required, the Group makes an estimate of the assets recoverable
amount. An assets estimated recoverable amount is the higher of an assets or CGUs fair value
less costs of disposal and its value in use (VIU) and is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount. In assessing VIU,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
subsidiaries or other available fair value indicators. Impairment losses of continuing operations
are recognized in profit or loss in those expense categories consistent with the function of the
impaired asset.

- 28 -
A previously recognized impairment loss is reversed only if there has been a change in the
assumptions used to determine the assets recoverable amount since the last impairment loss was
recognized. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increased amount cannot exceed the carrying amount that would have been
determined, net of depreciation or amortization, had no impairment loss been recognized for the
asset in prior years. Such reversal is recognized in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is treated as a revaluation increase. After such a
reversal, the depreciation or amortization expense is adjusted in future periods to allocate the
assets revised carrying amount, less any residual value, on a systematic basis over its remaining
useful life.
The Groups nonfinancial assets consist of creditable withholding taxes (CWTs), input value
added tax (VAT), prepaid expenses, other current assets, assets held for sale, property and
equipment, investment property, investments in associates and joint ventures, software
development costs, deferred input VAT and retirement benefit asset.
Goodwill
Goodwill is tested for impairment annually and when circumstances indicate that the carrying
value may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or
group of CGU) to which the goodwill relates. Where the recoverable amount of CGU (or group of
CGUs) is less than their carrying amount, an impairment loss is recognized immediately in profit
or loss of the CGU (or the group of CGUs) to which goodwill has been allocated. Impairment
losses relating to goodwill cannot be reversed in future periods.
Provisions and Contingencies

Provisions are recognized when: (a) the Group has a present obligation (legal or constructive) as a
result of a past event; (b) it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the
obligation.
Contingent liabilities are not recognized in the consolidated financial statements. They are
disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognized in the consolidated financial statements but disclosed in the
notes to consolidated financial statements when an inflow of economic benefits is probable.
Equity
Share capital is measured at par value for all shares issued. When the Parent Company issues
more than one class of stock, a separate account is maintained for each class of stock and the
number of shares issued. Incremental costs incurred directly attributable to the issuance of new
shares are shown in equity as a deduction from proceeds, net of tax.
Additional paid-in capital (APIC) is the difference between the proceeds and the par value when
the shares are sold at a premium. Contributions received from shareholders are recorded at the fair
value of the items received with the credit going to share capital and any excess to APIC.
Retained earnings (deficit) represents the cumulative balance of net income or loss, net of any
dividend declaration and other capital adjustments.
Treasury shares are own equity instruments that are reacquired. Treasury shares are recognized at
cost and deducted from equity. No gain or loss is recognized in profit or loss on the purchase,

- 29 -
sale, issuance or cancellation of the Groups own equity instruments. Any difference between the
carrying amount and the consideration, if reissued, is recognized as APIC. Voting rights related to
treasury shares are nullified for the Group and no dividends are allocated to them.
Other comprehensive income comprises items of income and expenses that are not recognized in
profit or loss for the year. Other comprehensive income of the Group includes net changes in fair
value of AFS investments, share in other comprehensive income of an associate and
remeasurement gains (losses) on accrued retirement benefits.
Revenue
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable, excluding discounts, rebates, VAT or duties. The Group
assesses its revenue arrangement against specific criteria in order to determine if it is acting as
principal or agent. The Group has concluded that it is acting as a principal in all of its revenue
arrangements. The specific recognition criteria for each type of revenue are as follows:
Freight and passage revenues are recognized when the related services are rendered. Customer
payments for services which have not yet been rendered are classified as unearned revenue under
Trade and other payables in the consolidated balance sheet.
Service fees are recognized when the related services have been rendered. Service fees are also
recognized when cargos are received by either shippers or consignee for export and import
transactions. These amounts are presented, net of certain costs which are reimbursed by
customers.
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of
the goods have passed to the buyer, which is upon delivery of the goods and acceptance of the
buyer and the amount of revenue can be measured reliably.
Revenue from sale of food and beverage is recognized upon delivery and acceptance by customers.
Vessel lease revenues from short-term leasing arrangements are recognized in accordance with the
terms of the lease agreements.
Manning and crewing services revenue is recognized upon embarkation of qualified ship crew
based on agreed rates and when the corresponding training courses have been conducted.
Arrastre and stevedoring revenue is recognized when related services are rendered.
Management fee is recognized when the related services are rendered.
Commissions are recognized as revenue in accordance with the terms of the agreement with the
principal and when the related services have been rendered.
Rental income arising from operating leases is recognized on a straight-line basis over the lease
term.
Interest income is recorded using the effective interest rate (EIR), which is the rate that exactly
discounts the estimated future cash payments or receipts through the expected life of the financial
instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset
or liability.

- 30 -
Dividend income is recognized when the shareholders right to receive the payment is established.
Costs and Expenses

Costs and expenses are recognized in profit or loss when decrease in future economic benefits
related to a decrease in an asset or an increase of a liability has arisen that can be measured
reliably.
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of
the arrangement at inception date of whether the fulfillment of the arrangement is dependent on
the use of a specific asset or assets or the arrangement conveys a right to use the asset. A
reassessment is made after the inception of the lease only if any of the following applies:
a. there is a change in contractual terms, other than a renewal or extension of the arrangement;
b. a renewal option is exercised and extension granted, unless the term of the renewal or
extension was initially included in the lease term;
c. there is a change in the determination of whether fulfillment is dependent on a specified asset;
or
d. there is a substantial change to the asset.
When a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances give rise to the reassessment for scenarios (a), (c) or (d) and at the date of
renewal or extension period for scenario (b).
The Group as a lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to
ownership of the leased item, are capitalized at the inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments. Lease payments
are apportioned between the finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are recognized
directly in profit or loss.
Capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset
and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the
end of the lease term.
Leases where the lessor retains substantially all the risks and rewards of ownership of the asset are
classified as operating leases. Operating lease payments are recognized as expense in profit or
loss on a straight-line basis over the lease term.
The Group as a lessor

Leases where the Group does not transfer substantially all the risks and rewards of ownership of
the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating
lease are added to the carrying amount of the leased asset and recognized over the lease term on
the same bases as rental income. Contingent rents are recognized as revenue in the period in
which they are earned.
Borrowing Costs
Borrowing costs are capitalized if they are directly attributable to the acquisition, construction or
production of a qualifying asset. Capitalization of borrowing costs commences when the activities
necessary to prepare the asset for intended use are in progress and expenditures and borrowing
costs are being incurred. Borrowing costs are capitalized until the asset is available for their

- 31 -
intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an
impairment loss is recognized. Borrowing costs include interest charges and other costs incurred
in connection with the borrowing of funds, as well as exchange differences arising from foreign
currency borrowings used to finance these projects, to the extent that they are regarded as an
adjustment to interest costs. All other borrowing costs are expensed as incurred.
Retirement Benefits
The net defined benefit liability or asset is the aggregate of the present value of the defined benefit
obligation at the end of the reporting period reduced by the fair value of plan assets (if any),
adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset ceiling
is the present value of any economic benefits available in the form of refunds from the plan or
reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Defined benefit costs comprise the following:
- Service cost
- Net interest on the net defined benefit liability or asset
- Remeasurements of net defined benefit liability or asset
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in profit or loss. Past service costs are recognized
when plan amendment or curtailment occurs. These amounts are calculated periodically by
independent qualified actuaries.
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on government bonds to the net defined benefit liability or asset.
Net interest on the net defined benefit liability or asset is recognized as expense or income in
profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in other comprehensive income in the period in which they arise. Remeasurements
are not reclassified to profit or loss in subsequent periods.
Taxes
Current income tax
Current income tax assets and liabilities for the current periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted at the end of each reporting period, in the
countries where the Group operates and generates taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity and not
in profit or loss. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

- 32 -
Deferred income tax

Deferred income tax is provided, using the balance sheet liability method, on all temporary
differences at the financial reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred income tax assets are recognized for deductible temporary differences, carryforward
benefits of unused tax credits from excess of minimum corporate income tax (MCIT) over regular
corporate income tax (RCIT) and unused net operating loss carryover (NOLCO), to the extent that
it is probable that sufficient future taxable profits will be available against which the deductible
temporary differences, carryforward benefits of unused tax credits from excess of MCIT over
RCIT and unused NOLCO can be utilized. Deferred income tax liabilities are recognized for all
taxable temporary differences.
Deferred income tax, however, is not recognized when it arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit or loss nor taxable profit or loss.
Deferred income tax liabilities are not provided on non-taxable temporary differences associated
with investments in domestic subsidiaries, associates and interest in joint ventures. With respect
to investments in other subsidiaries, associates and interests in joint ventures, deferred income tax
liabilities are recognized except when the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient future taxable income will be available to
allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax
assets are reassessed at the end of each reporting period and are recognized to the extent that it has
become probable that sufficient future taxable profits will allow the deferred income tax asset to
be recovered. It is probable that sufficient future taxable profits will be available against which a
deductible temporary difference can be utilized when there are sufficient taxable temporary
difference relating to the same taxation authority and the same taxable entity which are expected
to reverse in the same period as the expected reversal of the deductible temporary difference. In
such circumstances, the deferred income tax asset is recognized in the period in which the
deductible temporary difference arises.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realized or the liability is settled, based on tax rate and tax laws that
have been enacted or substantively enacted at the end of the reporting period.
Deferred income tax relating to items recognized in OCI or directly in equity is recognized in the
consolidated statement of comprehensive income and consolidated statement of changes in equity
and not in profit or loss.
Deferred income tax assets and liabilities are offset, if there is a legally enforceable right to offset
current income tax assets against current income tax liabilities and they relate to income taxes
levied by the same tax authority and the Group intends to settle its current income tax assets and
liabilities on a net basis.
VAT
Revenue, expenses, assets and liabilities are recognized, net of the amount of VAT, except where
the VAT incurred as a purchase of assets or service is not recoverable from the tax authority, in

- 33 -
which case VAT is recognized as part of the cost of acquisition of the asset or as part of the
expense item as applicable.
The net amount of VAT recoverable from, or payable to, the tax authority is included as part of
Other current assets or Trade and other payables in the consolidated balance sheet.
Creditable withholding taxes

Creditable withholding taxes (CWT), included in Other current assets account in the
consolidated balance sheet, are amounts withheld from income subject to expanded withholding
taxes (EWT). CWTs can be utilized as payment for income taxes provided that these are properly
supported by certificates of creditable tax withheld at source subject to the rule on Philippine
income taxation. CWTs which are expected to be utilized as payment for income taxes within
12 months are classified as current assets.
Foreign Currency-denominated Transactions and Translations

The Groups consolidated financial statements are presented in Philippine Peso, which is the
Companys functional and presentation currency. Each entity in the Group determines its own
functional currency and items included in the consolidated financial statements of each entity are
measured using that functional currency.
Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency rate of exchange ruling at the end of the reporting period.
All differences are taken to the profit or loss except for the exchange differences arising from
translation of the balance sheets of subsidiaries and associates which are considered foreign
entities into the presentation currency of the Company (Peso) at the closing exchange rate at the
end of the reporting period and their statements of income translated using the weighted average
exchange rate for the year. These are recognized in OCI until the disposal of the net investment, at
which time they are recognized in profit or loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recorded in equity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates as at the dates of the initial transactions and are not
retranslated. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Earnings Per Common Share

Basic earnings per common share are determined by dividing net income by the weighted average
number of common shares outstanding, after retroactive adjustment for any stock dividends and
stock splits declared during the year.
Diluted earnings per common share amounts are calculated by dividing the net income for the year
attributable to the ordinary equity holders of the parent by the weighted average number of
common shares outstanding during the year plus the weighted average number of ordinary shares
that would be issued for any outstanding common share equivalents. The Group has no potential
dilutive common shares.
Dividends on Common Shares
Dividends on common shares are recognized as a liability and deducted from retained earnings
when approved by the respective shareholders of the Company and subsidiaries. Dividends for the
year that are approved after the reporting period are dealt with as an event after the reporting
period.

- 34 -
Segment Reporting
The Groups operating businesses are organized and managed separately according to the nature
of the products and services provided, with each segment representing a strategic business unit
that offers different products and serves different markets. Financial information on business
segments is presented in Note 4.
Events After the Reporting Period

Post year events that provide evidence of conditions that existed at balance sheet date are reflected
in the consolidated financial statements. Subsequent events that are indicative of conditions that
arose after reporting period are disclosed in the notes to consolidated financial statements when
material.
3. Significant Judgments, Accounting Estimates and Assumptions
The preparation of the consolidated financial statements in compliance with PFRS requires
management to make judgments, accounting estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. The judgments,
estimates and assumptions are based on managements evaluation of relevant facts and
circumstances as of the date of the consolidated financial statements. Actual results could differ
from these estimates and assumptions used.
Judgments
In the process of applying the Groups accounting policies, management has made the following
judgments, apart from those involving estimations, which have the most significant effect on the
amounts recognized in the consolidated financial statements:
Determination of functional currency

Based on the economic substance of the underlying circumstances relevant to the Group, the
functional currency is determined to be the Peso. It is the currency that mainly influences the
sale of services and the cost of rendering the services.
Determination if significant influence or control exists in an investee company

Control is presumed to exist when the parent company owns, directly or indirectly through
subsidiaries, more than half of the voting power of an entity unless, in exceptional circumstances,
it can be clearly demonstrated that such ownership does not constitute control. Management has
determined that despite only having 50% ownership in Super Terminal, Inc. (STI), it has control
by virtue of its power to cast the majority votes at meetings of STIs BOD and control of the entity
is by that BOD.
Classification of financial instruments

The Group classifies a financial instrument, or its component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
contractual agreement and the definitions of a financial asset, a financial liability or an equity
instrument. The substance of a financial instrument, rather than its legal form, governs its
classification in the consolidated balance sheet. The Groups classification of financial
instruments is presented in Note 33.
Classification of leases - the Group as lessee

The Group has entered into commercial property leases on its distribution warehouses, sales
outlets, trucking facilities and administrative office locations. Based on an evaluation of the
terms and conditions of the arrangements, management assessed that there is no transfer of

- 35 -
ownership of the properties by the end of the lease term and the lease term is not a major part
of the economic life of the properties. Thus, the Group does not acquire all the significant
risks and rewards of ownership of these properties and so account for it as operating leases.
The Group has also entered into a finance lease agreements covering certain property and
equipment. The Group has determined that it bears substantially all the risks and benefits
incidental to ownership of said properties based on the terms of the contracts (such as
existence of bargain purchase option, present value of minimum lease payments amount to at
least substantially all of the fair value of the leased asset). As at March 31, 2014 and December
31, 2013, the carrying amount of the property and equipment under finance lease amounted to
=129.3 million and =
P P 135.4 million, respectively (see Note 20).
Classification of leases - the Group as lessor

The Group has entered into short-term leases or chartering arrangements, which provide no
transfer of ownership to the lessee. Based on an evaluation of the terms and conditions of the
arrangements, the Group determined that it retains all the significant risks and rewards of
ownership of these equipment and so accounts for it as operating leases.
Classification and valuation of assets held for sale

Management assessed whether its existing vessels met the criteria as assets held based on the
following: (1) the related assets are available for immediate sale; (2) preliminary negotiations with
willing buyers were executed; and (3) the sale is expected to be completed within 12 months from
the end of reporting period.
As at December 31, 2012, management assessed that the two of its existing vessels would remain
as assets held for sale since the delay in the disposal within one year from December 31, 2011 was
caused by events beyond the control of the Group and management remains committed to its plan
to sell the vessels. As at December 31, 2013 and 2012, the carrying values of two vessels under
assets held for sale amounted to P =359.2 million (see Note 10).
In June 2013, the Group sold one of the vessels held for sale for total cash proceeds of
=85.3 million, which resulted to a loss amounting to =
P P51.0 million (see Note 10). In
December 2013, the Group decided to put back into operation the remaining vessel held for sale to
property and equipment due to certain incidents which happened in 2013 that have a significant
impact on the passage and cargo capacity of the Group (see Note 13). Thus, as of December 31,
2013, there were no vessels classified as held for sale.
Classification of redeemable preferred shares (RPS)

The Group has RPS which is redeemable at any time, in whole or in part, within a period not
exceeding 10 years from the date of issuance. If not redeemed, the RPS may be converted to a
bond over prevailing treasury bill rate to be issued by the Company. The Company classified this
RPS amounting to P =6.6 million and =P6.7 million as liability as of March 31, 2014 and December
31, 2013, respectively (see Note 21).
Evaluation of legal contingencies

The Group is a party to certain lawsuits or claims arising from the ordinary course of business.
The Groups management and legal counsel believe that the eventual liabilities under these
lawsuits or claims, if any, will not have material effect on the consolidated financial statements.
Accordingly, no provision for probable losses arising from legal contingencies was recognized in
2014 and 2013 (see Note 22).

- 36 -
Evaluation of events after the reporting period

Management exercises judgment in determining whether an event, favorable or unfavorable
occurring between the end of the reporting period and the date when the financial statements are
authorized for issue, is an adjusting event or non-adjusting event. Adjusting events provide
evidence of conditions that existed at the end of the reporting period whereas non-adjusting events
are events that are indicative of conditions that arose after the reporting period.
Estimates and Assumptions

The following are the key assumptions concerning the future and other key sources of
estimation uncertainty, at the end of reporting period that have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within the next financial year:
Determination of fair value of financial instruments

Where the fair value of financial assets and liabilities recorded in the consolidated balance sheet
cannot be derived from active markets, they are determined using valuation techniques including
the discounted cash flows model. The inputs to the models are taken from observable markets
where possible, but where this is not feasible, a degree of judgment is required in establishing the
fair values. The judgments include considerations of inputs such as liquidity risk and credit risk.
Changes in assumptions about these factors could affect the reported fair value of financial
instruments.
The carrying values and corresponding fair values of financial assets and financial liabilities and
the manner in which fair values were determined are described in Note 34.
Estimation of allowance for doubtful receivables

The Group maintains an allowance for impairment losses on trade and other receivables at a level
considered adequate to provide for potential uncollectible receivables. The level of this allowance
is evaluated by the Group on the basis of factors that affect the collectability of the accounts.
These factors include, but are not limited to, the length of the Groups relationship with debtors,
their payment behavior and other known market factors. The Group reviews the age and status of
the receivables, and identifies accounts that are to be provided with allowance on a continuous
basis. The amount and timing of recorded expenses for any period would differ if the Group made
different judgment or utilized different estimates. An increase in the Groups allowance for
impairment losses would increase the Groups recorded expenses and decrease current assets.
The main considerations for impairment assessment include whether any payments are overdue or
if there are any known difficulties in the cash flows of the counterparties. The Group assesses
impairment in two levels: individually assessed allowances and collectively assessed allowances.
The Group determines allowance for each significant receivable on an individual basis. Among
the items that the Group considers in assessing impairment is the inability to collect from the
counterparty based on the contractual terms of the receivables. Receivables included in the
specific assessment are the accounts that have been endorsed to the legal department, non-moving
account receivables, accounts of defaulted agents and accounts from closed stations.
For collective assessment, allowances are assessed for receivables that are not individually
significant and for individually significant receivables where there is no objective evidence of
individual impairment. Impairment losses are estimated by taking into consideration the age of
the receivables, past collection experience and other factors that may affect collectibility.

- 37 -
As at March 31, 2014 and December 31, 2013, trade and other receivables amounted to P =4,030.6
million and =
P3,949.8 million, respectively, net of allowance for doubtful receivables of P
=379.5
million and =
P379.4 million, respectively (see Note 7).
Determination of NRV of inventories

The Groups estimates of the NRV of inventories are based on the most reliable evidence
available at the time the estimates are made, of the amount that the inventories are expected to be
realized. These estimates consider the fluctuations of price or cost directly relating to events
occurring after the end of the period to the extent that such events confirm conditions existing at the
end of the period. A new assessment is made of NRV in each subsequent period. When the
circumstances that previously caused inventories to be written down below cost no longer exist
or when there is a clear evidence of an increase in NRV because of change in economic
circumstances, the amount of the write-down is reversed so that the new carrying amount is the
lower of the cost and the revised NRV.
As at March 31, 2014 and December 31, 2013, the carrying values of inventories amounted to
P P422.0 million, net of allowance for inventory obsolescence amounting to
=51.3 million and =
P P 55.7 million, respectively (see Note 8).
Estimation of useful lives of property and equipment

The useful life of each of the Groups item of property and equipment is estimated based on the
period over which the asset is expected to be available for use until it is derecognized. Such
estimation is based on a collective assessment of similar businesses, internal technical evaluation and
experience with similar assets. The estimated useful life of each asset is reviewed periodically and
updated if expectations differ from previous estimates due to physical wear and tear, technical or
commercial obsolescence and legal or other limits on the use of the asset. It is possible, however, that
future results of operations could be materially affected by changes in the amounts and timing of
recorded expenses brought about by changes in the factors mentioned above. A reduction in the
estimated useful life of any item of property and equipment would increase the recorded
depreciation expenses and decrease the carrying value of property and equipment. There were no
changes in the estimated useful lives of property and equipment in 2014 and 2013.
As at March 31, 2014 and December 31, 2013, property and equipment amounted to = P 5,197.8
million and =
P5,054.9 million, net of accumulated depreciation, amortization and impairment loss
of P
=6,380.5 million and =
P6,171.2, respectively (see Note 13).
Estimation of residual value of property and equipment

The residual value of the Groups property and equipment is estimated based on the amount that
would be obtained from disposal of the asset, after deducting estimated costs of disposal, if the
assets are already of the age and in the condition expected at the end of its useful life. Such
estimation is based on the prevailing price of scrap steel. The estimated residual value of each
asset is reviewed periodically and updated if expectations differ from previous estimates due to
changes in the prevailing price of scrap steel.
There is no change in the estimated residual value of property and equipment in 2014, 2013 and
2012.

- 38 -
Estimation of useful life of software development costs

The estimated useful life used as a basis for amortizing software development costs was
determined on the basis of managements assessment of the period within which the benefits of
these costs are expected to be realized by the Group.
As at March 31, 2014 and December 31, 2013, the carrying value of software development costs
amounted to =
P 15.8 million and P
=15.4 million, respectively (see Note 15).
Impairment assessment of AFS investments

The Group considers AFS investments as impaired when there has been a significant or prolonged
decline in the fair value of such investments below their cost or where other objective evidence of
impairment exists. The determination of what is significant or prolonged requires judgment.
The Group treats significant generally as 20% or more and prolonged as greater than 12
months. In addition, the Group evaluates other factors, including normal volatility in share price
for quoted equities and future cash flows and discount factors for unquoted equities in determining
the amount to be impaired.
At March 31, 2014 and December 31, 2013, the carrying value of AFS investments amounted to
=6.9 million (see Note 11). No impairment loss was recognized in 2014, 2013 and 2012.
P
Estimation of probable losses on prepaid taxes

The Group makes an estimate of the provision for probable losses on its CWT and input VAT.
The aggregate carrying values of CWT, input VAT and deferred input VAT amounting to = P
1,087.0 million and P =1,028.9 million as of March 31, 2014 and December 31, 2013,
respectively, are fully recoverable (see Notes 9 and 16).
Assessment of impairment of nonfinancial assets and estimation of recoverable amount

The Group assesses at the end of each reporting period whether there is any indication that the
nonfinancial assets listed below may be impaired. If such indication exists, the entity shall
estimate the recoverable amount of the asset, which is the higher of an assets fair value less costs
of disposal and its value-in-use. In determining fair value less costs of disposal, an appropriate
valuation model is used, which can be based on quoted prices or other available fair value
indicators. In estimating the value-in-use, the Group is required to make an estimate of the
expected future cash flows from the CGU and also to choose an appropriate discount rate in order
to calculate the present value of those cash flows.
Determining the recoverable amounts of nonfinancial assets, which involves the determination of
future cash flows expected to be generated from the continued use and ultimate disposition of such
assets, requires the use of estimates and assumptions that can materially affect the consolidated
financial statements. Future events could indicate that these nonfinancial assets are impaired.
Any resulting impairment loss could have a material adverse impact on the financial condition and
results of operations of the Group.
The preparation of estimated future cash flows involves significant judgment and estimations.
While the Group believes that its assumptions are appropriate and reasonable, significant changes
in these assumptions may materially affect its assessment of recoverable values and may lead to
future additional impairment changes under PFRS.

- 39 -
Assets that are subject to impairment testing when impairment indicators are present (such as
obsolescence, physical damage, significant changes to the manner in which the asset is used,
worse than expected economic performance, a drop in revenues or other external indicators) are as
follows:
2014 2013
(In Thousands)
Property and equipment - net (Note 13) P
= 5,197,754 =5,054,932
P
Investment property (Note 14) 9,763 9,763
Investments in associates (Note 12) 188,475 181,976
Software development costs (Note 15) 15,810 15,379
The Group recognized provision for impairment losses on property and equipment and assets held
for sale amounting to = P234.8 million and = P223.6 million in 2013 and 2011, respectively
(see Note 13). In 2012, no impairment loss was recognized on property and equipment.
As of December 31, 2013, 2012 and 2011, no impairment losses were recognized on the Groups
investment property, investment in associates and joint ventures and software development costs
as their recoverable values are higher than their carrying values.
As at March 31, 2014 and December 31, 2013, the Group did not recognize impairment on other
nonfinancial assets.
Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the value in use of the CGUs to which the goodwill is allocated. Estimating the
value in use requires the Group to make an estimate of the expected future cash flows from the
CGU and also to choose a suitable discount rate in order to calculate the present value of those
cash flows. The significant assumptions used in the estimation of the recoverable amount of
goodwill are described in Note 5.
The carrying amount of goodwill as at March 31, 2014 and December 31, 2013amounted to
=250.5 million (see Note 5).
P
Estimation of retirement benefits costs and obligation
The determination of the obligation and cost for pension and other retirement benefits is dependent
on the selection of certain assumptions used by actuaries in calculating such amounts. Those
assumptions were described in Note 28 and include among others, discount rate and rate of
compensation increase. While it is believed that the Groups assumptions are reasonable and
appropriate, significant differences in actual experience or significant changes in assumptions may
materially affect the Groups pension and other retirement obligations.
The discount is determined based on the market prices prevailing on that date, applicable to the
period over which the obligation is to be settled.
As at March 31, 2014 and December 31, 2013, the Groups pension asset amounted to P =2.6
million and P=1.4 million while the Groups accrued retirement benefits amounted to P
=165.2
million and P
=167.2 million, respectively (see Notes 16 and 28).

- 40 -
Recognition of deferred income tax assets

The carrying amount of deferred income tax assets is reviewed at the end of each reporting
period
As at December 31, 2013 and 2012, the Group has recognized deferred income tax assets on its
temporary differences, carryforward benefits of NOLCO and excess MCIT amounting to
=481.9 million and P
P =824.1 million, respectively (see Note 29). Tax effect of the temporary
differences and carryforward benefits of unused NOLCO and MCIT for which no deferred
income tax assets were recognized amounted to P =454.4 million and P
=366.5 million as at
December 31, 2013 and 2012, respectively (see Note 29).
4. Operating Segment Information

Operating segments are components of the Group: (a) that engage in business activities from
which they may earn revenue and incur expenses (including revenues and expenses relating to
transactions with other components of the Group); (b) whose operating results are regularly
reviewed by the Groups BOD to make decisions about resources to be allocated to the segment
and assess its performance; and (c) for which discrete financial information is available. The
Groups Chief Operation Decision Maker is the Parent Companys BOD.
For purposes of management reporting, the Group is organized into business units based on their
products and services. The Group has the following segments:
The shipping segment renders passage transportation and cargo freight services.
The non-shipping segment provides logistics services and supply chain management.
The Groups BOD regularly reviews the operating results of its business units separately for the
purpose of making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on operating profit or loss and is measured consistently with
operating profit or loss in the consolidated financial statements.
The Group has only one geographical segment as all its assets are located in the Philippines. The
Group operates and devices principally all its revenue from domestic operations. Thus,
geographical business information is not required.
Transfer prices between operating segments are on an arms length basis in a manner similar to
transactions with third parties. Segment revenue includes transfer of goods and services between
operating segments. Such transfers are eliminated in the consolidation. Further, there were no
revenue transactions with a single customer that accounts for 10% or more of total revenue.
Further, the measurement of the segments is the same as those described in the summary of
significant accounting and financial reporting policies, except for the land property of 2GO
Express, which is carried at cost in the Companys consolidated financial statements but was
measured to fair value in the NNs consolidated financial statements at the date of the business
combination of the Company and NN.

- 41 -
Segment revenue, expenses, results, assets, liabilities and other information about the business
segments follows:
2014
Eliminations/ Consolidated
Shipping Non-shipping adjustments balances
(In Thousands)
Revenues P
= 2,174,777 P
= 1,451,284 (P
=306,486) P
=3,319,574
Costs and Expenses
Operating 1,548,609 649,476 (152,925) 2,045,160
Terminal 448,730 (100,944) 347,786
Cost of goods sold 489,033 489,033
Overhead 151,710 138,836 (52,618) 237,928
Total Cost and Expenses 2,149,049 1,277,345 (296,219) 3,119,908
Operating income (loss) before
interest and others 165,117 34,710 (161) 199,666
Interest and financing charges (82,356) (7,594) 16,397 (73,554)
Others net 26,725 19,558 (16,558) 29,726
Income before income tax 109,909 46,251 (322) 155,838
Provision for income tax 10,270 10,581 20,851
Segment profit (loss) P
= 99,639 P
= 35,670 (P
= 322) P
= 134,987
Segment assets P
= 11,643,211 P
= 3,385,217 (P
= 2,364,583) P
= 12,663,845
Segment liabilities (8,746,426) (2,624,783) 1,940,537 (9,430,671)
Other information:
Depreciation and amortization 199,880 14,357 214,237
Investments in associates and
joint ventures 119,251 69,224 188,475
Equity in net earnings of
associates and joint ventures 6,498 6,498
2013
(In Thousands)
Revenues =8,556,276
P =6,103,731
P (P
=1,286,814) =13,373,193
P
Operating Costs and Expenses
Operating 6,174,827 3,523,627 (1,124,313) 8,574,141
Terminal 1,401,229 1,472 (45,842) 1,356,859
Cost of goods sold 1,720,991 1,720,991
Overhead 777,967 569,625 (116,484) 1,231,108
Total Cost and Expenses 8,354,023 5,815,715 (1,286,639) 12,883,099
Operating income (loss) before interest
and others 202,253 288,016 (175) 490,094
Others net 573,688 84,116 (66,111) 591,693
Income before income tax 411,213 318,411 (16,851) 712,773
Segment profit (loss) (P
=6,863) =250,795
P (P
=16,851) =227,081
P
Segment assets =11,201,978

P P3,560,781
= (P
=2,240,855) =12,521,904
P
Other information:
Depreciation and amortization 966,167 76,064 (5,640) 1,036,591
Reversal of vessel impairment loss 60,606 60,606
Investments in associates and joint
ventures 16,500 62,473 103,004 181,977
Equity in net earnings of associates
and joint ventures 32,427 12,419 44,846

- 42 -
2012 (As restated, Note 2)

(In Thousands)
Revenues =9,001,320
P =5,038,263
P (P
=385,952) =13,653,631
P
Operating Costs and Expenses
Operating 7,377,773 2,519,046 (298,711) 9,598,108
Terminal 1,112,223 1,551 (48,009) 1,065,765
Cost of goods sold 1,761,564 1,761,564
Overhead 723,596 422,221 (39,111) 1,106,706
Total Cost and Expenses 9,213,592 4,704,382 (385,831) 13,532,143
Operating income (loss) before interest
and others (212,272) 333,881 (121) 121,488
Others net 172,130 33,230 (24,232) 181,128
Income (loss) before income tax (444,091) 321,084 25,151 (97,856)
Segment profit (loss) (P
=619,138) =238,232
P =25,151
P (P
=355,755)
Segment assets =10,124,742

P P3,003,620
= (P
=1,833,423) =11,294,939
P
Other information:
Depreciation and amortization 861,888 62,889 924,777
Investments in associates and joint
ventures 16,500 55,827 68,188 140,515
Equity in net earnings of associates
and joint ventures 28,713 8,981 37,694
5. Business Combinations
Acquisition of SOI and Impairment Testing of Goodwill

On June 3, 2008, 2GO Express acquired 100% ownership in SOI in line with the Groups business
strategy to provide total supply chain solutions to clients and to further improve the effectiveness
and efficiency of its delivery services. Goodwill resulting from this acquisition amounted to
=250.5 million.
P
Impairment Testing of Goodwill

The amount of goodwill acquired from the acquisition of SOI has been attributed to CGU. The
recoverable amount of goodwill has been determined based on a VIU calculation using cash flow
projections based on financial budgets approved by senior management covering a five-year
period. The discount rate applied to cash flow projections is 11.1% and 10.2% in 2013 and 2012.
Cash flows beyond the five-year period are extrapolated using a zero percent growth rate.
Key assumptions used in value in use calculations

The following describes each key assumption on which management has based its cash flow
projections to undertake impairment testing of goodwill.

- 43 -
Budgeted EBITDA
Budgeted EBITDA has been based on past experience adjusted for the following:
Revenue growth rate. Management expects a 13% increase in revenue in 2014 and in
subsequent years. The expected growth is based on managements strategic plan to expand its
supply chain operations.
Variable expenses. Management expects variable expenses to increase by 13% in 2014 and
subsequent years.
Fixed operating expenses. Management expects an increase in fixed operating expenses of
15% in 2014 and 9% to 10% increase in subsequent years.
Foreign exchange rates. The assumption used to determine foreign exchange rate is a
fluctuating Peso exchange rate of =P43.0 to a dollar starting 2013 until the fifth year.
Materials price inflation. The assumption used to determine the value assigned to the
materials price inflation is 5.00%, which then increased by 0.20% on the second year, another
increase of 0.40% on the third year and remains steady until the fifth year. The starting point
of 2014 is consistent with external information sources.
Budgeted capital expenditure
Budgeted capital expenditure is based on managements plan to expand the Groups supply chain
segment.
Sensitivity to changes in assumptions

Other than as disclosed above, management believes that any reasonably possible change in any of
the above key assumptions would not cause the carrying value of any CGU to exceed its
recoverable amount.
As at March 3, 2014 and December 31, 2013, 2012, the Group has not recognized any impairment
in goodwill on SOI.
6. Cash and Cash Equivalents
March 2014 December 2013

(In Thousands)
Cash on hand and in banks P
=573,574 =869,215
P
Cash equivalents 52,585 49,430
P
=626,159 =918,645
P
Cash in banks earns interest at the respective bank deposit rates. Cash equivalents are made for
varying periods of up to three months depending on the immediate cash requirements of the
Group, and earn interest at the respective short-term investment rates.
Total interest income earned by the Group from cash in banks and cash equivalents amounted to
=0.4 million in 2014, =
P P1.8 million in 2013, and P
=5.5 million in 2012 (see Note 25).

- 44 -
7. Trade and Other Receivables

(In Thousands)
Trade (Note 23):
Freight P
= 1,416,057 =1,403,534
P
Passage 48,798 46,037
Service fees 563,626 586,874
Distribution 319,726 281,738
Others 533,645 503,068
Due from related parties 97,963 159,418
Nontrade 480,077 414,429
Insurance and other claims (Note 13) 920,764 908,358
Advances to officers and employees 29,505 25,746
4,410,160 4,329,202
Less allowance for doubtful receivables 379,530 379,383
P
= 4,030,630 =3,949,819
P
a. Trade receivables are non-interest bearing and are normally on 30 days term.
b. Nontrade receivables also include advances to supplier, passage bonds and receivable from
trustee fund. These receivables are non-interest bearing and payable on demand.
c. Insurance and other claims receivables pertain to the Groups claims for reimbursement of
losses against insurance coverage for hull and machinery, spare parts, cargo, and personal
accidents. In 2013, the Group recognized recovery from insurance claims receivables relating
to the sunk and damaged vessels amounting to = P943.3 million, of which P=642.5 million
remains outstanding as of December 31, 2013 (see Note 13).
d. Freight and passage receivables of the NN Group amounting to P =1,706.4 million and
=1,589.5 million as of December 31, 2013 and 2012, respectively, were assigned to secure the
P
long-term debts (see Note 19).
e. Trade and other receivables that are individually determined to be impaired at the end of
reporting period relate to debtors with significant financial difficulties and who have defaulted
on payments and whose accounts are under dispute and legal proceedings. These receivables
are not secured by any collateral or credit enhancements.
The following tables set out the rollforward of the allowance for doubtful receivables as
follows:
March 2014
Insurance
Trade and other
Freight Service fees Distribution Others Nontrade claims Total
(In Thousands)
Beginning = 175,643
P = 117,907
P = 15,344
P = 8,037
P = 11,077
P = 51,375
P = 379,383
P
Provisions (Note 25) 61 160 (80) 6 147
Accounts written off /
reclassifications
Ending = 175,643
P = 117,968
P = 15,344
P = 8,197
P = 10,997
P = 51,381
P = 379,530
P

- 45 -
December 2013
Insurance
Trade and other
Freight Service fees Distribution Others Nontrade claims Total
(In Thousands)
Beginning = 126,086
P = 114,396
P = 15,344
P 4,768 P6,665
= = 51,375
P = 318,634
P
Provisions (Note 25) 49,557 3,511 3,461 4,431 60,960
Accounts written off /
reclassifications (192) (19) (211)
Ending = 175,643
P = 117,907
P = 15,344
P = 8,037
P = 11,077
P = 51,375
P = 379,383
P
The following table sets out the analysis of collective and individual impairment of trade and
other receivables:
2014 2013
Collectively Individually Collectively Individually
impaired impaired Total impaired impaired Total
(In Thousands)
Trade P
= 20,663 P
= 296,489 P
= 317,152 =48,901
P =268,030
P =316,931
P
Nontrade 10,997 10,997 11,077 11,077
Insurance and other
claims 51,381 51,381 51,375 51,375
P
= 20,663 P
= 358,947 P
= 379,530 =48,901
P =330,482
P =379,383
P
8. Inventories

(In Thousands)
At NRV:
Trading goods P
= 173,137 =194,026
P
Materials, parts and supplies 140,006 102,761
At cost - fuel, oil and lubricants 136,825 125,170
P
=449,968 =421,957
P
The allowance for inventory obsolescence as at March 31, 2014 and December 31, 2013 amounted
to =
P51.3 million and =
P55.7 million, respectively.
The cost of inventories recognized as Cost of goods sold in the consolidated statements of
income pertains to the trading goods sold by the non-shipping segment and food and beverages
sold by the shipping segment totaling to P
=489.0 million in March 2014 and P
=1,721.0 million in
December 2013 (see Note 25).

- 46 -
9. Other Current Assets

(In Thousands)
CWT P
= 892,015 =881,693
P
Prepaid expenses 177,152 107,274
Input VAT 86,663 38,304
Others 31,509 27,138
P
= 1,187,339 =1,054,409
P
a. Outstanding CWT pertains mainly to the amounts withheld from income derived from freight,
sale of goods and service fees for logistics and other services. The CWTs can be applied
against any income tax liability of a company in the Group to which the CWTs relate. Others
pertain to current portion of recoverable deposit.
b. Prepaid expenses include prepaid insurance and prepaid taxes.
10. Assets Held for Sale
In December 2011, in line with the Groups integration and vessels route rationalization, the
Groups BOD approved the sale of five of the Groups vessels within the next 12 months.
Accordingly, the net carrying values of these vessels amounting to P =692.6 million were
reclassified from property and equipment to assets held for sale in the 2011 consolidated balance
sheet. In 2011, the Group recognized impairment loss amounting to P =223.6 million, representing
the excess of carrying value over the fair value less cost to sell of the vessels. The recoverable
values of the assets held for sale as at December 31, 2011 are based from quotations obtained from
prospective buyers, net of estimated costs to sell.
On June 2, 2012, the Group sold two of the five vessels held for sale and the related spare parts,
fuel and lubricants inventories on board, for a total cash proceeds amounting to P =152.0 million
=201.7 million (included in Others - net in the consolidated
which resulted to loss amounting to P
statement of income, see Note 26).
In December 2012, the Group reclassified one vessel from assets held for sale to property and
equipment as management decided to use the vessel in consideration of the change in the Groups
operational requirements which would increase the vessels utilization. Consequently, the Group
assessed that the vessel will be recovered through continuing use rather than through sale. The Group
recorded depreciation of P=16.8 million as if the Group had not classified the vessel as assets held for
sale.
As of December 31, 2012, the recoverable values of the remaining two vessels classified as assets
=359.2 million approximate the assets fair values less cost to sell which
held for sale amounting to P
are based from quotations obtained from prospective buyers, net of estimated costs to sell.
In June 2013, the Group sold one of its remaining vessels held for sale for total cash proceeds of
=85.3 million and which resulted to a loss amounting to P
P =51.0 million (see Note 26).

- 47 -
In December 2013, the Group reclassified the remaining vessel from assets held for sale to
property and equipment in consideration of the change in the Groups operations requirements
which was significantly affected by the incidents on the damaged and sunken vessels in 2013.
Consequently, the Group assessed that the vessel will be recognized through continuing use rather
than through sale. The Group recorded depreciation of P =131.6 million as if the Group had not
classified the vessel as asset held for sale. Further, the Group reversed a portion of the previously
recognized impairment loss amounting to P =73.5 million on the basis that the value in use of the
vessel is higher than its carrying value as if it was not previously reclassified to assets held for
sale.
11. AFS Investments

(In Thousands)
Unquoted equity investments - at cost P
=6,267 =6,267
P
Quoted equity investments - listed shares of stocks 640 640
P
=6,907 =6,907
P
a. Listed shares of stocks are carried at market value. Unrealized gains or losses on AFS
investments are recognized in the consolidated statements of comprehensive income and
included in the Equity section of the consolidated balance sheets.
b. Unquoted shares of stocks pertain to fixed number of shares that are subject to mandatory
redemption every year.
c. In 2011, the Group recognized realized gain on sale of these AFS investments amounting to
=17.7 million (see Note 26).
P
12. Investments in Associates and Joint Ventures

The Group has the power to participate in the financial and operating policy decisions in MCCP
and HATS, which does not constitute control or joint control. The Group also has interest in KLN
and KALI, which are joint ventures.
The Groups investments in its associates and joint ventures are accounted for using equity
method of accounting as of:

Ownership Carrying Ownership Carrying
interest values interest values
Associates: (In Thousands) (In Thousands)
MCCP 33.0% =119,504
P 33.0% =119,504
P
HATS 50.0% 33,208 50.0% 32,075
Joint Ventures:
KLN 78.4% 35,762 78.4% 30,398
KALI 62.5% 62.5%
= 188,474
P =181,977
P

- 48 -
Details of investment in associates and joint ventures are as follows:

(In Thousands)
Acquisition - at beginning of year P
=28,175 =28,175
P
Accumulated equity in net earnings:
Balances at beginning of year 148,757 109,520
Equity in net earnings during the year 6,498 44,846
Dividends received (5,609)
Balances at end of year 155,254 148,757
Share in remeasurement loss on retirement benefits
of associates and joint ventures (249) (249)
Share in cumulative translation adjustment of
associates 5,294 5,294
P
= 188,474 =181,977
P
Associates
In 2011, the Group sold its investment in Catena Security, Inc., an associate, for a total cash
consideration of =
P19.2 million resulting to a gain on disposal of investment amounting to
=2.9 million, included under Others - net in the consolidated statements of income
P
(see Note 26).
Joint Ventures
On March 18, 2009, 2GO Express and KLN Investments Holdings Philippines, Inc. (KLN
Investments) formed KLN Logistics Holdings Philippines, Inc. (KLN Holdings), a joint venture.
In accordance with the Joint Venture Agreement, 2GO Express and KLN Investments (the
venturers) will hold ownership interests of 78.4% and 21.6%, respectively, in KLN Holdings.
However, the venturers exercise joint control over the financial and operating policies of KLN
Holdings.
On March 30, 2009, KLN Holdings and KLN Investments formed another joint venture entity,
Kerry-ATS Logistics, Inc. (KALI) to engage in the business of international freight and cargo
forwarding. In accordance with the Joint Venture Agreement, KLN Holdings and KLN
Investments will hold 62.5% and 37.5% interest in KALI, respectively, thus giving the Group a
49.0% indirect ownership interest in KALI.
Summarized financial information of the associates and joint ventures, based on their financial
statements, the reconciliation with the carrying amount of the investment in the consolidated
financial statements are set out below.
2013
Associates Joint Ventures
MCCP HATS KLN/KALI Total
(In Thousands)
Current assets P
=188,080 P
=128,129 160,906 P
=477,115
Noncurrent assets 414,963 7,084 9,162 431,209
Current liabilities 311,674 81,198 108,953 501,825
Noncurrent liabilities 6,691 1,296 4,642 12,629
Equity 284,678 52,719 56,473 393,870
Revenue 1,254,268 348,907 591,976 2,195,151
Net income 98,264 9,961 15,934 124,159
Group share of net income
for the year 32,427 4,693 7,726 44,846

- 49 -
2012
Associates Joint Ventures
MCCP HATS KLN/KALI Total
(In Thousands)
Current assets P397,089
= =127,379
P =64,989
P P589,457
=
Noncurrent assets 529,856 8,753 4,163 542,772
Current liabilities 473,288 77,977 44,288 595,553
Noncurrent liabilities 258,916 8,314 1,812 269,042
Equity 194,741 49,841 23,052 267,634
Revenue 1,197,558 314,489 219,105 1,731,152
Net income 86,752 13,493 2,624 102,869
Group share of net income
for the year 28,628 6,488 2,578 37,694

- 50 -
13. Property and Equipment

March 31, 2014
Vessels in
Operation Containers Terminal and Furniture and
(Notes 19 and Reefer Vans Handling Flight Other Land Buildings and Transportation Leasehold Construction
and 20) (Note 20) Equipment Equipment Equipment Improvements Warehouses Equipment Improvements in Progress Total
(In Thousands)
Cost
Beginning = 6,201,468
P = 1,582,873
P = 1,260,678
P P
= = 785,901
P = 418,935
P = 268,425
P = 289,938
P = 394,150
P = 23,754
P = 11,226,122
P
Additions 336,171 9,445 4,999 19 8,665 271 3,642 3,294 468 3,407 370,381
Disposals (1,042) (3) (1,046)
Retirements/reclassifications (14,864) 1,147 (1,208) (2,431) 113 (17,242)
Ending 6,522,775 1,592,318 1,265,677 794,670 419,206 270,857 290,801 394,618 27,274 11,578,215
Accumulated Depreciation and Amortization
Beginning 2,223,252 1,331,713 1,201,333 693,372 112,642 207,132 85,315 316,431 6,171,190
Depreciation and amortization (Note 24) 164,040 7,612 13,224 19 9,369 1,958 4,580 7,477 5,321 213,599
Disposals (229) (1,054) (2,474) (3,757)
Retirements/Reclassifications (569) (2) (571)
Ending 2,386,493 1,339,325 1,214,557 19 701,684 114,600 211,712 90,319 321,752 6,380,461
Net Book Value = 4,136,281
P = 252,993
P = 51,120
P =
P = 92,986
P = 304,607
P = 59,144
P = 200,482
P = 72,865
P = 27,274
P = 5,197,754
P
December 31, 2013

Vessels in
Operation Containers Terminal and Furniture and
(Notes 19 and Reefer Vans Handling Flight Other Land Buildings and Transportation Leasehold Construction
and 20) (Note 20) Equipment Equipment Equipment Improvements Warehouses Equipment Improvements in Progress Total
(In Thousands)
Cost
Beginning = 6,160,707
P = 1,529,443
P = 1,289,930
P = 4,999
P = 771,929
P = 410,685
P = 261,470
P = 103,709
P = 365,773
P = 49,042
P = 10,947,687
P
Additions 1,357,487 73,954 16,769 37,922 8,250 10,523 199,826 28,395 54,654 1,787,780
Disposals (1,149,283) (20,524) (50,159) (25,666) (219) (13,597) (2,525) (1,261,973)
Retirements/reclassifications (1,205,301) 4,138 (4,999) 1,716 (3,349) 2,507 (1,205,288)
Reclassification from assets held for sale (Note 10) 1,037,858 (79,942) 957,916
Ending 6,201,468 1,582,873 1,260,678 785,901 418,935 268,425 289,938 394,150 23,754 11,226,122
Accumulated Depreciation and Amortization
Beginning 2,499,697 1,326,051 1,203,895 4,781 679,654 104,790 190,255 65,538 295,720 6,370,381
Depreciation and amortization (Note 25) 849,929 25,108 43,542 39,161 7,852 17,349 30,611 23,039 1,036,591
Disposals (808,995) (19,446) (50,157) (26,458) (113) (10,834) (2,410) (918,413)
Retirements/Reclassifications (1,205,301) 4,053 (4,781) 1,015 (359) 82 (1,205,291)
Reclassification from assets held for sale (Note 10) 653,161 653,161
Impairment for the year 234,761 234,761
Ending 2,223,252 1,331,713 1,201,333 693,372 112,642 207,132 85,315 316,431 6,171,190
Net Book Value = 3,978,216
P = 251,160
P = 59,345
P =
P = 92,529
P = 306,293
P = 61,293
P = 204,623
P = 77,719
P = 23,754
P = 5,054,932
P

- 51 -
Noncash additions - property and equipment under finance lease

Vessels in operations, containers and reefer vans, include units acquired under finance lease
arrangements (see Note 20). In 2013 and 2012, noncash additions include costs of those leased
assets amounting to P
=90.9 million and P
=31.9 million, respectively. The related depreciation of the
leased containers amounting to P
=12.1 million in 2013, =
P10.0 million in 2012 and =P16.3 million in
2011 were computed on the basis of the Groups depreciation policy for owned assets.
Capitalization of drydocking costs
Vessels in operation also include capitalized drydocking costs incurred amounting to
=733.8 million and P
P =507.1 million for the four vessels drydocked in 2013 and 2012, respectively.
No drydrocking cost for capitalization was incurred in 2011. The related depreciable life of
drydocking costs ranges from two to five years.
Disposal, retirement and impairment of property and equipment
In 2013 and 2012, the Group disposed certain property and equipment for net cash proceeds of
=4.8 million and =
P P160.8 million resulting to net gains of P
=99.0 million in 2012 (see Note 26).
In July 2013, one of the Groups operating passenger-cargo vessels was damaged. Thus, the
Group wrote off the carrying value of the damaged vessels engine and the related component
parts amounting to =
P221.9 million (see Note 26), which represents the estimated repair cost of the
damaged vessel. As of March 31, 2014, the damaged vessel has yet to be put back into operation.
In August 2013, a passenger-cargo vessel of the Group sunk after colliding with a cargo vessel.
As a result, the carrying value of the sunk vessel as of that date amounting to P
=227.7 million was
written off (see Note 26).
Subsequent to the above incidents which happened in 2013, management filed the insurance
claims with the insurance company to recover the insured values of the damaged vessel and
sunken vessel and cargoes on board, and other related expenses which were incurred by the Group
as a result of the incidents. The total recovery from the insurance company amounting to
=943.3 million in 2013 is included under Others - net in the consolidated statements of income
P
(see Note 26).
In 2013, the Group also recognized impairment loss of = P12.9 million (included under Reversal of
(provision for) impairment loss on assets held for sale and property and equipment - net) on two
non-operating vessels to write down their carrying values to their salvage values.
Depreciation and amortization
Depreciation and amortization were recognized and presented in the following accounts in the
consolidated statements of income (see Note 25):
March 2014 March 2013

(In Thousands)
Operating expenses P
=174,455 =210,763
P
Terminal expenses 26,406 18,165
Overhead expenses 13,376 19,357
P
= 214,237 = 248,285
P
Property and equipment held as collateral

As of December 31, 2013 and 2012, the Groups vessels in operations and assets held for sale with
total carrying value of = P3,661.0 million and P
=4,020.0 million are mortgaged to secure certain
obligations (see Note 19). As of December 31, 2013 and 2012, containers and other equipment
held as collateral for finance lease amounted to P
P182.6 million, respectively
(see Note 20).

- 52 -
Fair value of vessels in operation

The Groups vessels in operation are appraised for the purpose of determining their market values.
Based on the latest appraisal with various dates from July 2012 to January 2013 made by
independent appraisers, the related vessels in operation have an aggregate market value of
=4,855.0 million against net book value of P
P =3,978.2 million (see Note 34).
14. Investment Property
The Groups investment property amounting to = P9.8 million pertains to a parcel of land not
currently being used in operations. The fair value of the investment property as of
December 20, 2011, the latest appraisal report, amounted to = P66.9 million. This was determined
based on the valuation performed by independent appraisers using the Market Data Approach.
Under the Market Data Approach, the value of the land is based on sales and listings of
comparable property registered within the vicinity. The technique of this approach requires the
establishment of comparable property by reducing reasonable comparative sales and listings to a
common denominator. This is done by adjusting the differences between the subject property and
those actual sales and listings regarded as comparable. The properties used as basis of comparison
are situated within the immediate vicinity of the subject property.
The Group assessed that the fair value determination for the investment properties as Level 3 since
significant unobservable inputs were used in the valuation. Significant increase (decrease) in
estimated price per square meter in isolation would result in a significantly higher (lower) fair
value (see Note 34).
15. Software Development Costs
Software development costs amounted to = P15.8 million and = P15.4 million, net of accumulated
amortization of =
P579.5 million and =
P578.8 million as at March 31, 2014 and December 31, 2013,
respectively.
The Group recognized additions to software amounting to =P1.1 million in 2014 and P
=7.2 million in
2013 and amortization of software costs included under Overhead expenses in the consolidated
statements of income amounting to P=0.6 million, =
P5.6 million in 2013, and P
=11.2 million in 2012
(see Note 25).
16. Other Noncurrent Assets

(In Thousands)
Deferred input VAT P
= 108,328 =108,896
P
Refundable deposits 76,676 65,788
Pension asset (Note 28) 2,644 1,354
Others 7,962 4,552
P
= 195,610 =180,590
P
a. Deferred input VAT relates mainly to the acquisition of vessels and related component parts.
b. Noncurrent refundable deposits consist of amounts recoverable beyond one year arising from
rental deposits which can be applied as rental payments at the end of the lease term or can be
paid out in cash upon termination of the lease.

- 53 -
17. Loans Payable
As at March 31, 2014 and December 31, 2013, the loans payable amounting to P =1,347.9 million
and 1,344.9 million, respectively, pertain to unsecured short-term peso-denominated notes payable
obtained by the Group from local banks with annual interest rates ranging from 5.0% to 7.0% in
March 2014 and 4.5% to 7.9% in December 2013.
Loans payable outstanding as of December 31, 2013 will mature on various dates in 2014. Total
interest expense incurred by the Group for the loans amounted to P
=17.5 million in March 2014,
=90.6 million in December 2013, and =
P P89.1 million in December 2012 (see Note 26).
18. Trade and Other Payables

(In Thousands)
Trade (Note 23) P
= 2,214,777 =2,166,704
P
Accrued expenses (Note 23) 1,093,293 1,213,333
Nontrade (Note 23) 794,173 787,063
Unearned revenue - net of deferred discounts 56,390 22,144
P
= 4,158,633 =4,189,244
P
a. Trade and other payables are non-interest bearing and are normally on 30-45 days term
except for advances to related parties which are classified under nontrade payables and are
payable on demand.
b. Nontrade payables consist of customers deposits, and payables due to government agencies.
c. Provision for cargo losses and damages refers to the cost of claims for breakages, cargo losses,
cargo short weight or passenger claims which are not covered by insurance. In 2013, 2012 and
2011, provisions recognized amounted to P =22.7 million, P=24.9 million and P=41.3 million (see
Note 25) while actual claims during the year amounted to P =4.8 million, =
P51.3 million and 21.9
million, respectively.
19. Long-term Debts

(In Thousands)
Omnibus Loan and Security Agreement (OLSA)
Banco de Oro Unibank, Inc. (BDO) P
= 3,619,952 =3,619,952
P
RCBC Savings Bank 1,755 1,863
Unamortized debt arrangement fees (22,616) (23,946)
3,599,092 3,597,869
Current portion (273) (373)
P
= 3,598,849 =3,597,496
P

- 54 -
Omnibus Loan and Security Agreement dated February 24, 2011

The Company, NN, SFFC and HLP entered into an Omnibus Loan and Security Agreement dated
February 24, 2011 (2011 Omnibus Loan) with BDO, which consists of term loans of = P4.0 billion
and omnibus line of P=400.0 million. In March 2011, the Company availed the P =4.0 billion term
loans, which was used for the refinancing of its short-term loans payable (see Note 17) and the
early redemption of its long-term debt on March 15, 2011 in accordance with the provision of the
2011 Omnibus Loan. The omnibus loan, on the other hand, amounting to = P400.0 million shall be
used by the Company and HLP for working capital requirements and to secure their obligations
with BDO.
The P =4.0 billion term loans consist of Series A and Series B Term Loans amounting to
=2.0 billion each. The interest on each of the Series A and Series B Term Loans is a combination
P
of fixed and floating rates. Fifty percent (50%) of the principal amount of each of the Series A
Term Loan and Series B Term Loan, respectively, have a fixed interest rate, and the remaining
fifty percent (50%) have a quarterly floating annual interest rate, provided, such floating interest
rate shall have a minimum of 5.0% per annum. The principal of the loans is subject to 16
quarterly amortizations which commenced at the end of the third quarter from the drawdown date
until March 2016.
Prior to the refinancing as assessed below, the Company paid the principal of the loan amounting
to =
P800.0 million in 2012.
2011 Omnibus Loan - Suretyship agreement, mortgage trust indenture and assignment of receivables
In accordance with the 2011 Omnibus Loan, the Company and NN executed a Continuing Suretyship
in favor of BDO. As a result, upon the happening of an event of default, the creditor shall have the
right to set-off or apply to payment of the credit facility any and all moneys of the sureties which may
be in possession or control of the creditor bank. Further, the creditor bank shall likewise have the full
power against all the sureties properties upon which the creditor bank has a lien. The Continuing
Suretyship also applies with respect to the Facility Agreement entered by NN and the creditor bank on
January 26, 2011.
The Company, NN and SFFC also executed a Mortgage Trust Indenture (MTI) under the OLSA
whereby the Group creates and constitutes a first ranking mortgage on the collaterals for the
benefit of BDO. The Group shall at all times maintain the required collateral value, which is
equivalent to 200% of the obligations.
Further, as required by the OLSA, the Company, NN and SFFC shall assigned customer receivables
sufficient to cover the availed credit facility in excess of P =3.66 billion. Notwithstanding such
assignment, the Company, NN and SFFC shall have the right to collect the assigned customer
receivables and appropriate the proceeds therefrom for their benefit, provided that the assignors
shall replace the collected receivables in accordance with the required terms and condition and
there is no happening of an event of default under the OLSA. The customer receivables shall refer
to all outstanding receivables of the assignors as of the date of the execution of the OLSA, and the
future customer receivables of the assignors, which shall be valued at 50% of their face value
expressed in Peso.
As of December 31, 2013 and 2012, the Company, NN and SFFC collateralized their vessels
under MTI with carrying value amounting to P =3,490.6 million and = P4,305.6 million assets
held for sale amounting to P =359.2 million and certain outstanding customers
=75.4 million and P
receivables amounting to = P1,706.4 million and P=1,589.5 million, respectively (see Notes 7
and 13).

- 55 -
2011 Omnibus Loan covenants

The OLSA is subject to certain covenants such as but not limited to:
Maintenance of the following required financial ratios of the Company: minimum quarterly
current ratio of 1:1; maximum quarterly debt-to-equity ratio of 2.5:1 for the first year and 2:1
for the succeeding years; and, minimum yearly debt service coverage ratio (DSCR) of 1.2:1 for
the first and second years and 1.5:1 for the succeeding years, provided, however, that the
consolidated yearly DSCR of the Company and NN shall not fall below 1.5:1 for the first and
second years, and 1.75:1 for the succeeding years;
Prohibition on any change in control in the Company or its business or majority ownership of
its capital stock (except with respect to the majority investors in the case of NN) or a change in
the Chief Executive Officer;
Prohibition to declare or pay any dividends to its common and preferred stockholder or make
any other capital or asset distribution to its stockholders, unless the financial ratios above are
fully satisfied;
Prohibition to sell, lease, transfer or otherwise dispose of its properties and assets, divest any of
its existing investments therein, or acquire all or substantially all of the properties or assets of
any other third party, except those in the ordinary course of business.
As of December 31, 2012, the Company breached the minimum current ratio, maximum debt-to-
equity ratio and minimum DSCR, which likewise constitute events of default. Due to the cross-
default provisions in accordance with the NN/BDO Facility Agreement, this resulted in an event
of default also on the long-term debt of NN.
The Company obtained a letter from BDO dated December 28, 2012, which states that the
Company shall not be declared in default by BDO should there be breach in minimum current
ratio of 1.0, maximum debt to equity ratio of 2.0 and maximum DSCR of 1.2 and that the
Company is given 12 months from December 31, 2012 to remedy the default. In view of this, the
noncurrent portion of the loans remained as noncurrent liability in the consolidated balance sheet
as of December 31, 2012.
Refinancing of the Companys 2011 Omnibus Loan with 2013

Omnibus Loan and Security Agreement dated June 11, 2013
On June 13, 2013, the Company, as borrower and assignor, and BDO, as lender, and NN, SOI,
2GO Express, 2GO Logistics, as sureties and assignors, and SFFC, as assignor, executed an
Omnibus Loan and Security Agreement (2013 Omnibus Loan) effective June 11, 2013 (i) to
refinance the Companys existing loan with the lender with original maturity date on March 15,
2016 under the 2011 Omnibus Loan and (ii) to fund various capital expenditures such as, but not
limited to, drydocking, major repairs of various vessel, and other capital expenditures related to
the Companys supply chain business, as well as other general corporate requirements of the
Company.
In June 2013, the Company availed of = P3.6 billion of the =

P4.0 billion term loans, which was used
for the early redemption of its outstanding long-term debt based on the 2011 Omnibus Loan.
The P =4.0 billion term loans consist of Series A and Series B Term Loans amounting to
=2.0 billion each. The interest on each of the Series A and Series B Term Loans is a combination
P
of fixed and floating rates. Fifty percent (50%) of the principal amount of each of the Series A
Term Loan and Series B Term Loan, respectively, have a fixed interest rate, and the remaining
fifty percent (50%) have a quarterly floating annual interest rate, provided, such floating interest
rate shall have a minimum of 5.0% per annum. The principal of the loans is subject to 16

- 56 -
quarterly amortizations which commenced at the end of the third quarter from the drawdown date
until March 2016.
2013 Omnibus Loan - Supplemental Indenture to the suretyship agreement, mortgage trust indenture
and assignment of receivables
The Borrower and the parties to the MTI executed a Supplemental Indenture to (i) include in the 2013
Omnibus Loan as part of the obligations covered and secured by the MTI, (ii) to include the vessels
based on the revised list as collateral under the MTI, and (iii) ensure that the Secured Obligations
enjoyed the same ranking as the obligations under the term loan of the 2013 Omnibus Loan with
respect to the collateral under the MTI.
The Borrower and the parties to the MTI also executed a Second Supplemental Indenture to include
the real properties as collateral under the MTI.
Further, as required by 2013 Omnibus Loan, in the event the availed amount of the long-term debt
exceeds the loan value of the collaterals under the MTI, as determined by the lender, each of the
Assignors assigns, conveys, sets over and transfers unto the Lender the absolutely and unconditionally
all of its respective rights, title, and interest in and to the Customers Receivables to cover the
availment of the long-term debt that exceeds the loan value of the collaterals under the MTI. All other
conditions with respect to the assignment of receivables under the 2013 omnibus loan are the same
with the assignment provisions under the 2011 Omnibus Loan.
2013 Omnibus Loan covenants

In accordance with the Section 7 of the 2013 Omnibus Loan, the Group is now required to
maintain the following financial ratios based on NN consolidated financial statements at each
testing date: minimum current ratio of 1.0 times; maximum debt-to-equity ratio of 2.2 times; and,
minimum DSCR. Testing date means (i) with respect to any December 31 consolidated audited
financial statements of the Company, April 30 of the succeeding year, (ii) with respect to any
June 30 consolidated unaudited financial statements of the Company, September 30 of the same
year.
As of December 31, 2013, the Group is compliant with its loan covenants.
Interests from long-term borrowings of the Group recognized as expense amounted to

=210.9 million in 2013, P
P =263.7 million in 2012 and =
P266.2 million in 2011 (see Note 26).
In 2013 and 2011, the Group incurred debt transaction costs amounting to P =26.6 million and
=48.9 million, respectively. Amortization of these debt transaction costs included under interest
P
and financing charges amounted to P=1.3 million in March 2014 and = P26.7 million in December
2013 (see Note 26).
20. Obligations Under Finance Lease
The Group has various finance lease arrangements with third parties for the lease of vessels,
containers and reefer vans denominated in US dollars. The lease agreements provide for the
transfer of ownership to the Group at the end of the lease term, which among other considerations
met the criteria for a finance lease. Therefore, the leased assets were capitalized.
The future minimum lease payments under finance lease, together with the present value of
minimum lease payments are as follows:

- 57 -

(In Thousands)
Minimum lease payments due within one year P
= 31,686 =19,618
P
Beyond one year but not later than five years 85,948 103,448
Total minimum lease obligation 117,634 123,066
Less amount representing interest 3,007 5,282
Present value of minimum lease payment 114,627 117,784
Less current portion 27,342 28,592
Noncurrent portion P
=87,285 =89,192
P
The net carrying values of property and equipment held by the Group under finance lease are
summarized as follows (see Note 13).

(In Thousands)
Cost P
= 178,466 =181,032
P
Less accumulated depreciation 49,131 45,611
Net book value P
= 129,335 =
P 135,421
The interest expense recognized related to these leases amounted to P

=3.0 million in 2014 and =
P6.1
million in 2013 (see Note 26).
21. Redeemable Preferred Shares (RPS)
On January 7, 2003, the Company issued 374,520,487 RPS in the form of stock dividends out of
capital in excess of par value at the rate of one share for every four common shares held by the
shareholders.
The RPS has the following features:
non-voting;
preference on dividends at the same rate as common share;
redeemable at any time, in whole or in part, as may be determined by the BOD within a period
not exceeding 10 years from the date of issuance at a price of not lower than = P6 per share as
may be determined by the BOD. The shares must be redeemed in the amount of at least
=250,000 per calendar year;
P
if not redeemed in accordance with the foregoing, the RPS may be converted to a bond
bearing interest at 4% over prevailing treasury bill rate to be issued by the Parent Company;
and
preference over assets in the event of liquidation.
On June 15, 2006, the Philippine SEC approved 2GOs application for the amendment of its
Articles of Incorporation to add a convertibility feature to the RPS so as to allow holders of RPS,
at their option, to convert every RPS into two (2) common shares of 2GO. During the Conversion
Period from September 1 to October 13, 2006, a total of 70,343,670 preferred shares or 93.91%
were converted to common shares.

- 58 -
As at December 31, 2011, 4,560,417 outstanding RPS with remaining carrying value of P =25.9 million
are shown under Current liabilities section of the consolidated balance sheets, which are carried
at amortized cost, accretion of interest is nil for 2013, P
=1.4 million in 2012 and P=3.1 million in
2011 (see Note 26).
On October 25, 2012, the BOD of the Company approved the redemption of all remaining
outstanding RPS held by each eligible stockholder of such shares at a price of P
=6.00 per share. As
of December 31, 2012, unredeemed RPS amounted to P =6.9 million.
On March 27, 2013, the BOD approved the retirement of 4,564,330 RPS due to the mandatory
redemption by the Company of the RPS. On the same date, the BOD also approved the
amendment of the Articles of Incorporation of the Company to decrease its authorized capital
stock as a result of the retirement of the RPS. As of March 31, 2014 and December 31, 2013,
unredeemed RPS amounted to P = 6.6 and =
P6.7 million.
22. Provisions and Contingencies
a. There are certain legal cases filed against the Group in the normal course of business.
Management and its legal counsel believe that the Group has substantial legal and factual
bases for its position and are of the opinion that losses arising from these cases, if any, will not
have a material adverse impact on the consolidated financial statements.
b. The Company has pending insurance claims (presented as part of Insurance and other
claims) amounting to =
P908.4 million and =
P248.2 million as at December 31, 2013 and 2012,
respectively, which management believes is virtually certain of collection (see Note 7).
23. Related Party Disclosures
In the normal course of business, the Group has transacted with the following related party:
Relationship Name
Ultimate Parent Negros Holdings & Management Corporation (NHMC)
Intermediate Company KGLI-NM Holdings, Inc. (KGLI-NM)
Parent Company NN
Significant stockholder China-ASEAN Marine B.V. (CAMBV)
Subsidiaries of the
Parent Company Negrense Marine Integrated Services, Inc. (NMISI)
Brisk Nautilus Dock Integrated Services, Inc. (BNDISI)
Subsidiaries of the Sea Merchants Inc.(SMI)
Parent Company Bluemarine Inc. (BMI)
2GO Express, Inc. (Express)
2GO Logistics, Inc. (Logistics)
Subsidiary ScanAsia Overseas, Inc. (SOI)
Hapag-Lloyd Philippines, Inc. (HLP)
Reefer Van Specialist, Inc. (RVSI)
WRR Trucking Corporation (WTC)
The Supercat Fast Ferry Corporation (SFFC)
Special Container and Value Added Services, Inc. (SCVASI)
NN-ATS Logistics Management and Holdings, Inc.
(NALMHCI)
Super Terminal, Inc. (STI)
J&A Services Corporation (J&A)
Red Dot Corporation (RDC)
North Harbor Tugs Corporation (NHTC)
Sungold Forwarding Corporation (SFC)

- 59 -
Supersail Corporation (SSI)

Astir Engineering Works, Inc. (AEWI)
United South Dockhandlers, Inc. (USDI)
W G & A Supercommerce, Inc. (WSI)
Associates MCC Transport Philippines, Inc. (MCCP)
Hansa-Meyer ATS Projects, Inc. (HATS)
Vestina Securities Services, Inc. (VSSI)
The following are the revenue and income (costs and expenses) included in the consolidated
statements of income with related parties which are not eliminated:
Nature 2013 2012
(In Thousands)
Parent Company Interest income =

P =40,099
P
Vessel leasing (527,759) (804,193)
Outside services (58,535)
Associates Freight income 1,488 17,214
Shared cost 11,464 5,309
Freight expense (523) (157)
Trucking income 1,413
Rent income 7
Outside services (38,792)
Service income 44,322
Rent 1,875 332
Outside services (194,330) (154,992)
Entities Under Repairs and maintenance (38,466) (72,573)
Common Control Professional and management fee 2,250 (53,354)
Arrastre and stevedoring (2,769) (9,971)
Steward supplies (26,571) (7,409)
Food and subsistence (28) (5,456)
Rent expense (2,378)
Hustling and shifting (5,396) (1,150)
Transportation and delivery (1,018) (93)
Key Management Short-term employee benefits 40,673 36,803
Personnel Post-employment benefits 4,343 2,818
The consolidated balance sheets include the following amounts with respect to the balances with
related parties:
Financial Statement Account Terms and Conditions 2013 2012

(In Thousands)
Trade receivables 30 to 60 days; noninterest-bearing P
=3,061 =
P
Parent Company Due from related parties On demand; noninterest-bearing 146,068 9
Nontrade receivables On demand; noninterest-bearing 61,653 23,621
Trade payables 30 to 60 days; noninterest-bearing (450,923) (80,287)
Accrued expenses 30 to 60 days; noninterest-bearing (35,791) (48,866)
Due to related parties On demand; noninterest-bearing (29,507) (28,366)
Nontrade payables On demand; noninterest-bearing (26,229)
Trade receivables 30 to 60 days; noninterest-bearing 26,162 7,200
Due from related parties On demand; noninterest-bearing 13,293 32,811
Nontrade receivables On demand; noninterest-bearing 33,966
Associate Trade payables 30 to 60 days; noninterest-bearing (5,980)
Accrued expenses 30 to 60 days; noninterest-bearing (12,611)
Due to related parties On demand; noninterest-bearing (148)
Nontrade payables On demand; noninterest-bearing (400)
Trade receivables 30 to 60 days; noninterest-bearing 316
Due from related parties On demand; noninterest-bearing 57 17,715
Nontrade receivables On demand; noninterest-bearing 69,925 91,710
Entities Under
Trade and other payables 30 to 60 days; noninterest-bearing (51,909) (62,827)
Common Control
Accrued expenses 30 to 60 days; noninterest-bearing (56,514) (32,415)
Due to related parties On demand; noninterest-bearing (1,699) (2,946)
Nontrade payables 30 to 60 days; noninterest-bearing (1,223)

- 60 -
The outstanding related party balances are unsecured and settlement occurs in cash, unless
otherwise indicated. The Group has not recorded any impairment of receivables relating to
amounts owed by related parties. This assessment is undertaken each financial year through
examining the financial position of the related parties and the market in which these related parties
operate.
Other terms and conditions related to the above related party balances and transactions are as
follows:
Transactions with NN
Transactions with NN in 2011 include joint services and co-loading arrangements whereby the
Company and NN share vessel space for the shipment of customer cargoes. Each of the
parties, whoever is the actual vessel-operating carrier, charged the other party for the shared
space on a per container basis.
Effective December 1, 2011, the Company entered into a vessel lease arrangement with NN
involving six of NNs vessels at a fixed daily rate for a period of one year. In 2013, vessel
lease rates are based on agreed monthly rates (see Note 32).
In 2011, the Company has granted NN an interest-bearing loan amounting to = P657.5 million,
which was fully paid by NN in 2012.
NN charges shared cost to the Company and its subsidiaries.
Transactions with associates and other related parties under common control
NMISI charges agency fee to the Company based on an agreed rate for its manpower services
and for its management of the Companys food and beverage business effective August 2011.
Negrense also provides housekeeping and manpower pooling services to the Company and
SFFC.
BNDISI provides container repairs, cargo handling and trucking services to the Company.
Transactions with other associates and related companies consist of shipping services, charter
hire, management services, ship management services, purchases of steward supplies,
availment of stevedoring, arrastre, trucking, and repair services and rental.
Transactions and balances with related parties eliminated during consolidation

The following are the transactions and balances among related parties which are eliminated in the
consolidated financial statements:
Nature March 2014 December 2013
(In Thousands)
2GO 2GO Express Freight P
=56,836 =256,717
P
Interest 15,293 21,439
2GO Shared cost 1,698 10,692
2GO Logistics Shared cost 8,600 33,613
KALI Freight 6,927
Shared cost 195
SFFC Interest 7,561 17,731
NALMHCI Shared cost 4,065 23,133
2GO Express 2GO Commission 999 4,629
Services fees 789 2,975
Shared cost 15,798 10,885
KALI/J&A/STI/SSI 2GO Freight
Purchase/sale of water 6,160 23,889
Passage terminal
Outside services 191 14,298

- 61 -
Terms and Conditions March 2014 December

2013
(In Thousands)
Amounts owed to: Amounts owed by:
2GO 2GO Express 7% interest-bearing P
=126,169 =132,410
P
SFFC 9% interest-bearing 80,798 78,597
2GO Express/2GO Logistics/ On demand; Noninterest bearing
SOI/Others 75,640 126
2GO Express/2GO Logistics/ 30 - 60 days; Noninterest bearing
SOI/Others 236,416 226,250
AEWI 2GO 30 - 60 days; Noninterest bearing 50,600 37,468
2GO Express 2GO On demand; Noninterest bearing 16,328 23,464
SCVASI 30 - 60 days; Noninterest bearing 10,555 12,491
2GO Logistics 2GO On demand, Noninterest bearing 21,564 2,665
SOI RDC 30 days; Noninterest bearing 1 5
KALI 2GO 30 - 60 days; Noninterest bearing
SFFC 2GO/2GO Express 30 days; Noninterest bearing 376 10,941
NALMHCI 2GO/2GO Express/2GO 30 days; Noninterest bearing
Logistics P
=25,724 =117,809
P
USDI 30 days; Noninterest bearing 13,366 13,366
J&A 2GO/NHTC 30 days; Noninterest bearing 4,121
RDC 2GO 30 days; Noninterest bearing
Logistics/SOI/NALMHCI 3,842 2,756
SSI 2GO/2GO Express/2GO 30 days; Noninterest bearing
Logistics 42,739 47,869
STI 2GO 30 days; Noninterest bearing 1,946 1,946
NHTC 2GO/J&A 30 days; Noninterest bearing 1,409 1,802
SFC 2GO/2GO Express/ 30 days; Noninterest bearing
2GO Logistics/
NALMHCI
SCVASI 2GO On demand; Noninterest bearing 3,398 8,104
The Companys transactions with 2GO Express Group include shipping and forwarding
services, commission and trucking services.
The Company provided management services to SFFC, 2GO Express, 2GO Logistics, HLP,
KALI and SOI at fees based on agreed rates.
2GO Express provides management services to the Companys loose cargo business at fees
based on an agreed rate.
24. Equity
a. Share capital
Details of share capital considered as equity as of March 31, 2014 and December 31, 2013
follows:
Amount
Number of shares (In Thousands)
Authorized common shares 4,070,343,670 =4,070,344
P
Issued and outstanding common shares of
=1.00 per value each
P 2,446,136,400 =2,446,136
P

- 62 -
Movements in authorized capital stocks follow:

Number of shares
Common Preferred shares
Date Activity shares (Note 21) Total
Authorized capital stocks as of
May 26, 1949 incorporation date 5,000 5,000
December 10, 1971 Increase in authorized capital stocks 5,000 5,000
October 21, 1975 Increase in authorized capital stocks 4,990,000 4,990,000
September 3, 1982 Increase in authorized capital stocks 5,000,000 5,000,000
August 18, 1989 Increase in authorized capital stocks 10,000,000 10,000,000
December 29, 1993 Increase in authorized capital stocks 20,000,000 20,000,000
November 21, 1994 Increase in authorized capital stocks 900,000,000 900,000,000
October 26, 1998 Increase in authorized capital stocks 1,000,000,000 1,000,000,000
Reclassification of common shares to
December 6, 2002 preferred shares (375,000,000) 375,000,000
November 18, 2003 Redemption of preferred shares (224,712,374) (224,712,374)
November 22, 2004 Redemption of preferred shares (74,904,026) (74,904,026)
October 24, 2005 Increase in authorized capital stocks 1,624,524,400 1,624,524,400
Reclassification of preferred shares to
October 24, 2005 common shares 475,600 (475,600)
Reclassification of preferred shares to
August 7, 2008 common shares 70,343,670 (70,343,670)
4,070,343,670 4,564,330 4,074,908,000
Movements in issued and outstanding capital stocks follow:

Number of shares
Issue Common Preferred shares
Date Activity price shares (Note 21) Total
Issued capital stocks as of incorporation
May 26, 1949 date =1,000.00
P 1,002 1,002
December 10, 1971 to
October 26, 1998 Increase in issued capital stocks 1,000.00 1,496,597,636 1,496,597,636
Reclassification of common shares to
December 6, 2002 preferred shares 1.00 40,000,000 374,520,535 414,520,535
Issuance of preferred shares
February 10, 2003 before redemption 1.00 (48) (48)
November 18, 2003 Redemption of preferred shares 6.67 (224,712,374) (224,712,374)
Issuance of common shares by way of
September 6, 2004 stock dividends 1.00 393,246,555 - 393,246,555
November 22, 2004 Redemption of preferred shares 6.67 (74,904,026) (74,904,026)
Issuance of common shares
December 31, 2004 prior to reorganization 1.00 (756) (756)
Issuance of common shares through
October 24, 2005 share swap transactions 1.76 414,121,123 414,121,123
August 22 to Conversion of redeemable preferred
October 13, 2006 shares to common shares 3.20 140,687,340 (70,343,670) 70,343,670
Redemption of redeemable preference
December 6 -31, 2012 share 6.00 (3,413,467) (3,413,467)
2,484,652,900 1,146,950 2,485,799,850
December 31, 2001 Treasury shares* 1.50 (38,516,500) (38,516,500)
2,446,136,400 1,146,950 2,447,283,350
* The carrying value of treasury shares is inclusive of =
P0.9 million transaction cost.
Issued and outstanding common shares are held by 1,935 and 1,940 equity holders as of
March 31, 2014 and December 31, 201, respectively.
b. Deficit
Deficit is net of undistributed earnings amounting to P =202.6 million in 2013 and
=274.3 million in 2012, representing accumulated equity in net earnings of subsidiaries and
P
associates, which are not available for dividend declaration until received in the form of
dividends from such subsidiaries and associates. Deficit is further restricted to the extent of
the cost of the shares held in treasury and deferred income tax assets recognized as of
December 31, 2013 and 2012.

- 63 -
On January 12, 2011, the Companys fully paid cash dividend amounting to fifteen centavos
(P
=0.15) for every common and preferred share outstanding as of December 15, 2010 or a total
dividend declaration of P
=367.6 million.
c. Excess of cost over net asset value of investments - net
The pooling of interest method was applied to account for the following acquisitions since
these involved entities under common control:
On August 30, 2007, the Company acquired SFFC from its affiliate, Accuria, Inc. for a
=13.7 million. The excess of cost over SFFCs net assets during the
total consideration of P
time of acquisition, amounting to = P11.7 million is recorded in equity as Excess of cost
over net assets of investments.
On December 1, 2011, NALHMCI acquired from NN, six of its subsidiaries for a total
consideration of =
P29.4 million. These subsidiaries are J&A, RDC, NHTC, STI, SFC and
SSI. The excess of the combined net assets of NNs subsidiaries at the time of acquisition
over the total cost of the investment amounted to P =0.8 million and is presented under
equity as Excess of cost over net assets value of investments.
25. Operating Costs and Expenses

(Unaudited) (Unaudited and restated)
(In Thousands)
Operating Expenses
Fuel, oil and lubricants = 643,647
P = 819,348
P
Outside services (Note 23) 357,917 324,856
Vessel leasing (Notes 23) 79,500 191,993
Depreciation and amortization (Note 13) 174,455 210,763
Personnel costs (Notes 27 and 28) 108,479 134,372
Rent (Note 23) 88,447 75,966
Repairs and maintenance (Note 23) 43,797 64,826
Food and beverage (Note 8) 17,123 20,754
Insurance 47,460 36,571
Communication, light and water 24,684 32,911
Material and supplies used 21,693 29,332
Food and subsistence 17,123 20,754
Sales concessions 10,546 20,646
Commissions 11,655 6,954
Provision for cargo losses and damages (Note 18) 2,119 6,059
Arrastre and Stevedoring 53,338 30,186
Transshipment 7,177 7,307
Packaging Cost 7,152 4,522
Transportation and Travel 4,332 4,627
Taxes and Licenses 8,805 3,795
Trucking expense 187,366 253,676
Advertising and promotion 27,818 43,079
Representation and PR 2,515 158
Lashing 1,868 2,986
Others 113,267 99,686
2,045,160 2,425,372
Terminal Expenses
Transportation and delivery 151,186 45,982

- 64 -

(In Thousands)
Repairs and maintenance 19,892 30,771
Rent (Note 23) 21,735 31,277
Depreciation and amortization (Note 13) 26,406 18,165
Fuel, oil and lubricants 20,007 21,969
Others 17,692 37,629
347,793 326,371
Overhead Expenses
Depreciation and amortization (Notes 13 and 15) 13,376 19,357
Communication, light and water 14,873 18,854
Provision for doubtful accounts (Note 7) 61 2,454
Taxes and licenses 19,040 32,054
Rent (Note 23) 7,738 8,374
Entertainment, amusement and recreation 7,595 6,065
Computer charges 1,140 2,873
Transportation and travel 3,921 4,506
Repairs and maintenance 4,713 5,334
Office supplies 2,885 4,495
Others 23,696 7,324
237,928 288,083
Cost of Goods Sold (Note 8) 489,033 425,544
= 3,119,908
P =3,465,369
P
In accordance with the vessel leasing agreement as discussed in Note 23, NN, as the owner of the
vessels, is accountable for its vessels drydocking costs, depreciation and amortization, repair and
maintenance, personnel, and insurance costs. Included in the vessel costs are the costs incurred by
2GO relating to fuel and lubricants, pilotage, port charges and other variable costs on the leased
NNs vessels.
26. Other Income (Charges)
Financing Charges
March 2013
March 2014 (Unaudited and
(In Thousands)
Interest expense on:
Loans payable (Note 17) P
= 17,528 = 22,761
P
Long-term debt (Note 19) 51,688 56,184
Amortization of:
Debt transaction cost (Note 19) 1,330 25,169
Obligations under finance lease (Note 20) P
= 3,007 609
P
= 73,554 = 104,723
P

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Others - net
March 2013
March 2014 (Unaudited and
(In Thousands)
Gain (loss) on disposal of:
AFS investments (Note 11) =
P =
P
Assets held for sale (Note 10)
Property and equipment (Note 13) (68) 6,369
Interest income (Notes 6 and 22) 4,801 8,146
Foreign exchange gains 212 51
Others - net 18,282 2,152
P
= 23,228 = 16,718
P
27. Personnel Costs

Details of personnel costs are as follows:

(In Thousands)
Salaries and wages P
=190,268 =195,391
P
Crewing cost 19,575 26,833
Retirement benefits cost (Note 28) 8,217 9,226
Other employee benefits 44,171 64,644
P
= 262,231 = 296,095
P
In 2011, redundancy and retirement benefits cost included as part of integration cost amounted to
=97.2 million. The remaining P
P =25.8 million pertains to the professional fees incurred relating to
the integration of the Group.
28. Retirement Benefits
The Group has funded defined benefits pension plans covering all regular and permanent
employees. The benefits are based on employees projected salaries and number of years of
service.
The funded status and amounts recognized in the consolidated balance sheets include
the retirement benefits of SGF as at December 31, 2013 and of SGF and SOI as at
December 31, 2012.
The following tables summarize the components of the net retirement benefits cost recognized in
the consolidated statements of income and comprehensive income and the funded status and
amounts recognized in the consolidated balance sheets:
2013
Defined Fair Value Accrued
Benefit of Plan Retirement
Obligation Assets Benefits
January 1 =229,044
P (P
=97,558) =131,486
P
Net retirement benefits cost in profit or

- 66 -
loss:
Current service cost 31,331 31,331
Curtailment gain (4,684) (4,684)
Net interest cost 12,527 (6,043) 6,484
39,174 (6,043) 33,131
Benefits paid (16,281) 10,679 (5,602)
Re-measurement losses (gains) in
other comprehensive income -
actuarial changes arising from
changes in:
Financial assumptions (11,025) 4,338 (6,687)
Demographic assumptions 6,992 6,992
Experience adjustments 24,644 24,644
20,611 4,338 24,949
Actual contributions (18,075) (18,075)
December 31 =272,548
P (P
=106,659) =165,889
P
January 1 =225,803
P (P
=72,906) =152,897
P
Net retirement benefits cost in profit or
loss:
Current service cost 26,784 26,784
Curtailment gain (28,440) (28,440)
Settlement cost 1,490 1,490
Net interest cost 16,359 (5,152) 11,207
14,703 (3,662) 11,041
Benefits paid (26,504) 39,341 12,837
Re-measurement losses (gains) in
other comprehensive income -
actuarial changes arising from
changes in:
Financial assumptions P34,508
= (P
=24,902) =9,606
P
Demographic assumptions (24,245) (24,245)
Experience adjustments 4,779 4,779
15,042 (24,902) (9,860)
Actual contributions (35,429) (35,429)
December 31 =229,044
P (P
=97,558) =131,486
P
The plan assets available for benefits follow:

December 31, December 31,
2013 2012
(In Thousands)
Cash and cash equivalents 11,932 13,899
Receivables 32,760 28,932
Investments in debt securities 56,971 54,181
Others 4,996 546

- 67 -
Fair value of plan assets P

=106,659 =97,558
P
The principal assumptions used in determining pension benefit obligations for the Groups plans
are shown below:
2013 2012 2012
Discount rate 6.04% 7.52% 8.29% to 10.53%
Future salary increases 7.83% 7.70% 6.00% to 8.00%
Turnover rate 17.00% 17.00% 17.00%
The accrued retirement benefits is subject to several key assumptions. Shown below is the
sensitivity analysis of the retirement obligation to reasonably possible changes on each significant
assumption:
Impact on accrued
Increase (decrease) retirement benefits
(In Thousands)
Discount rate +1% (P
=19,079)
-1% 23,104
Salary increase rate +1% 21,884
-1% (18,520)
Turnover rate +1% (5,577)
-1% 6,403
As of December 31, 2013 and 2012, the Group has no transactions with its retirement funds such
as loans, investments, gratuities, or surety. The fund also does not have investments in debt or
equity securities of the companies in the Group.
The Group expects to contribute approximately P
=44.7 million to the defined benefit pension plan
in 2014.
29. Income Tax
a. The components of provision for (benefit from) income tax are as follows:
2013 2012 2011

(In Thousands)
Current:
RCIT P
=98,804 =66,997
P =43,042
P
MCIT 40,617 14,293 11,687
139,421 81,290 54,729
Deferred 346,271 176,609 (246,766)
P
=485,692 =257,899
P (P
=192,037)
b. The components of the Groups recognized net deferred income tax assets and liabilities are as
follows:
2013 2012
Net Deferred Net Deferred Net Deferred
Income Income Income
Tax Assets Tax Assets(1) Tax Liabilities(2)
(In Thousands)
Directly recognized in profit or loss

- 68 -
2013 2012
Net Deferred Net Deferred Net Deferred
Income Income Income
Tax Assets Tax Assets(1) Tax Liabilities(2)
Deferred income tax assets on:
NOLCO =250,370
P =645,828
P P
=
MCIT 23,528 13,576
Allowances for:
Impairment of receivables 100,945 84,314 85
Inventory obsolescence 16,698 19,608
Investment in stock 75 75
Accrued retirement costs
and others 20,456 16,689 663
Accruals and others 40,065 20,803 264
452,137 800,893 1,012
Deferred income tax liabilities:
Pension asset (406) (138)
Others (4,372) (6,924) (1,213)
(4,778) (6,924) (1,351)
Directly recognized in equity
Deferred income tax asset on
remeasurement of retirement costs 29,717 22,232
=477,076
P =816,201
P (P
=339)
(1)
Pertain to the Company, 2GO Express, 2GO Logistics, WTC, J&A, SFFC and AEWI
(2)
Pertain to HLP
c. Details of the Groups NOLCO and MCIT which can be carried forward and claimed as tax
credit against regular taxable income and regular income tax due, respectively, are as follows:
NOLCO
Available Balances as of December 31, 2013
Incurred in Until Amount Applied Expired Amount Tax Effect
(In Thousands)
2012 2015 =851,550
P =
P =
P =851,550
P P255,465
=
2011 2014 1,364,384 (30,874) 1,333,510 400,053
2010 2013 1,168,924 (511,919) (657,005)
=3,384,858
P (P
=542,793) (P
=657,005) =2,185,060
P =655,518
P
MCIT
Balances as of
Available December 31,
Incurred in Until Amount Applied Expired 2013
(In Thousands)
2013 2016 P47,742
= =
P P
= P47,742
=
2012 2015 21,919 21,919
2011 2014 3,092 3,092
2010 2013 1,606 (1,606)
=74,359
P =
P (P
=1,606) =72,753
P
d. The following are the Groups NOLCO and MCIT for which no deferred income tax assets
have been recognized in compliance with PFRS. Management, however, believes that there
will be sufficient future taxable income that would substantially utilize the NOLCO in the
future.

- 69 -
2013 2012
(In Thousands)
NOLCO P
=1,350,493 =1,203,408
P
MCIT 49,225 5,454
e. Reconciliation between the income tax expense (benefit) computed at statutory income tax
rates of 30% in the provision for income tax expense as shown in profit or loss is as follows:
2012 2011
(As Restated, (As Restated,
2013 Note 2) Note 2)
(In Thousands)
Tax effect of income at statutory rates P
=213,832 (P
=29,357) (P
=239,366)
Derecognition of deferred income tax asset
on NOLCO 381,631 334,877
Income tax effects of:
Changes in unrecognized deferred
income tax assets 46,571
Income tax holiday (ITH) incentive on
registered activities (Note 31) 806 (36,123) 7,093
Gain on sale of investment already
subjected to final tax (5,299)
2012 2011
(As Restated, (As Restated,
2013 Note 2) Note 2)
(In Thousands)
Equity in net (earnings) loss of
associates (P
=13,454) (P
=11,308) =1,977
P
Interest income already subjected to a
lower final tax (619) (1,449) (1,944)
Dividend income (10,987) (903) (84)
MCIT derecognized 13,576 624
Application of NOLCO for which no
deferred tax asset was recognized (146,787)
MCIT incurred for the year for which
no deferred tax asset was
recognized 39,306
Others 8,388 1,538 (985)
Provision for (benefit from) income tax P
=485,692 =257,899
P (P
=192,037)
30. Earnings (Loss) Per Common Share

Basic and diluted earnings per common share were computed as follows:
December 2012
(As restated,
March 2014 December 2013 Note 2)
(In Thousands, except EPS)
Net loss for the year attributable to
equity holders of the parent P 134,987
= P212,044
= (P
=366,084)
Weighted average number of 2,446,136 2,446,136 2,446,136

- 70 -
common shares outstanding for

the year
Earnings (loss) per common share = 0.0539
P =0.0867
P (P
=0.1497)
There are no potentially dilutive common shares as at March 31, 2014 and December 31, 2013.
31. Registration with the Board of Investments (BOI)
a. With the effectivity of the merger of the Company and ZIP, the Parent Company assumed
ZIPs outstanding BOI registration as an expanding operator of logistics service facility on a
non-pioneer status under Certificate of Registration No. 2008-179. The ITH incentive for a
period of three years, which expired in July 2011, provided that for purpose of availment, a
base figure of P =924.1 million will be used in the computation of the ITH for the said
expansion.
b. On January 27, 2011, BOI approved the Companys application for registration of the
modernization of two (2) second-hand RORO vessels, SuperFerry 20 and SuperFerry 21. The
Company was granted ITH incentive for a period of three years from March 2011 or actual
start of operations. The ITH incentive shall be limited only to the sales/revenues generated by
the registered project.
SFFC is registered with BOI as a New Operator of Domestic Shipping (Passenger Vessel) on
a Non-Pioneer status. The Company is entitled to four years ITH from date of registration
until February 2012.
32. Agreements and Commitments
a. The Company has a Memorandum of Agreement (Agreement) with Asian Terminals, Inc.
(ATI) for the use of ATIs facilities and services at the South Harbor for the embarkation and
disembarkation of the Companys domestic passengers, as well as loading, unloading and
storage of cargoes. The Agreement shall be for a period of five years, which shall commence
from the first scheduled service of the Company at the South Harbor. The Agreement is
renewable for another five years under such terms as may be agreed by the parties in writing.
If the total term of the Agreement is less than ten years, then the Company shall pay the
penalty equivalent to the unamortized reimbursement of capital expenditures and other related
costs incurred by ATI in the development of South Harbor. The Agreement became effective
on January 14, 2003.
Under the terms and conditions of the Agreement, the Company shall avail of the terminal
services of ATI, which include, among others, stevedoring, arrastre, storage, warehousing and
passenger terminal. Domestic tariff for such services (at various rates per type of service as
enumerated in the Agreement) shall be subject to an escalation of 5% every year.
b. On December 31, 2012, the Company and Manila North Harbour Port, Inc. (MNHPI) entered
into an agreement to engage the services of MNHPI to handle all the freight, passenger
terminal and allied port services requirements of the former and in particular, to consolidate
all its operations at Manila North Harbor. The agreement is effective upon signing and shall
remain in effect for 10 years, renewable for another 5 years upon such terms and conditions as
the parties may agree.
c. The Group has entered into various operating lease agreements for its office spaces. The
future minimum rentals payable under the noncancellable operating leases are as follows:

- 71 -
2013 2012
(In Thousands)
Within one year P
=175,050 =223,689
P
After one year but not more than five years 217,069 184,208
P
=392,119 =407,897
P
d. The Company entered into several vessel leasing agreements for a period ranging from three
to 15 months. In 2012, vessel lease rates are based on an agreed daily rate ranging from
$3,125 to $9,400. In 2013, vessel lease rates are based on agreed monthly rate of = P26.0
million.
33. Financial Risk Management Objectives and Policies
Risk Management Structure

The Groups overall risk management program focuses on the unpredictability of financial
markets and seeks to minimize potential adverse effects on the Groups financial performance. It
is, and has been throughout the year under review, the Groups policy that no trading in financial
instruments shall be undertaken.
Credit Risk Management Objectives and Procedures

The Groups principal financial instruments comprise of cash and cash equivalents, loans payable,
long-term debt, obligations under finance lease, restructured debts and redeemable preferred
shares. The main purpose of these financial instruments is to raise financing for the Groups
operations. The Group has other various financial assets and liabilities such as trade and other
receivables and trade and other payables, which arise directly from operations.
The main risks arising from the Groups financial instruments are credit risk involving possible
exposure to counter-party default, primarily, on its short-term investments and trade and other
receivables; liquidity risk in terms of the proper matching of the type of financing required for
specific investments and maturing obligations; foreign exchange risk in terms of foreign exchange
fluctuations that may significantly affect its foreign currency denominated placements and
borrowings; and interest rate risk resulting from movements in interest rates that may have an
impact on interest-bearing financial instruments.
Credit risk
To manage credit risk, the Group has policies in place to ensure that all customers that wish to
trade on credit terms are subject to credit verification procedures and approval of the Credit
Committee. In addition, receivable balances are monitored on an ongoing basis to reduce the
Groups exposure to bad debts. The Group has policies that limit the amount of credit exposure to
any particular customer.
The Group does not have any significant credit risk exposure to any single counterparty. The
Groups exposures to credit risks are primarily attributable to cash and collection of trade and
other receivables with a maximum exposure equal to the carrying amount of these financial
instruments.
As of December 31, 2013 and 2012, the Group did not hold collateral from any counterparty.
The credit quality per class of financial assets that are neither past due nor impaired is as follows:

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As at December 31, 2013

Neither past due nor impaired Past due and/or
High Medium Low impaired Total
(In Thousands)
Cash in banks = 837,089
P P
= P
= P
= = 837,089
P
Trade and other receivables:
Freight 45,734 156,215 291,879 909,706 1,403,534
Passage 11,214 96 34,727 46,037
Services fees 17,550 56,104 94,568 418,652 586,874
Distribution 169,513 112,225 281,738
Others 179,333 49,045 274,690 503,068
Nontrade receivables 5,654 38,978 369,797 414,429
Due from related parties 14,651 144,767 159,418
Insurance and other claims 856,944 39 51,375 908,358
Advances to officers and employees 20,913 2,805 2,028 25,746
AFS investments 6,333 574 6,907
Total = 2,214,358
P = 303,856
P = 386,447
P = 2,317,967
P = 5,222,628
P

Neither past due nor impaired Past due and/or
High Medium Low impaired Total
(In Thousands)
Cash in banks =662,808
P =
P =
P =
P =662,808
P
Trade and other receivables:
Freight 43,534 316,285 204,871 744,156 1,308,846
Passage 25,352 52,557 77,909
Services fees 45,490 46,053 29,774 232,290 353,607
Distribution 184,582 102,789 287,371
Others 136,005 21,944 1,663 262,567 422,179
Nontrade receivables 72,324 27,307 268,863 368,494
Due from related parties 50,535 50,535
Insurance and other claims 113,678 4,275 130,293 248,246
Advances to officers and employees 38,639 1,966 726 41,331
AFS investments 8,178 557 8,735
Total =1,463,522
P =418,387
P =236,308
P =1,794,241
P =3,912,458
P
High quality receivables pertain to receivables from related parties and customers with good
favorable credit standing. Medium quality receivables pertain to receivables from customers that
slide beyond the credit terms but pay a week after being past due. Low quality receivables are
accounts from new customers and forwarders. For new customers, the Group has no basis yet as
far as payment habit is concerned. With regards to the forwarders, most of them are either under
legal proceedings or suspended. In addition, their payment habits extend beyond the approved
credit terms because their funds are not sufficient to conduct their operations.
The Group evaluated its cash in bank and cash equivalents as high quality financial assets since
these are placed in financial institutions of high credit standing. It also evaluated its advances to
officers and employees as high grade since these are deductible from their salaries.
The aging per class of financial assets that were past due but not impaired is as follows:

- 73 -

Neither past Past due but not impaired Impaired
due nor Less than 30 31 to 60 61 to 90 Over 90 financial
impaired days days days days assets Total
(In Thousands)
Loans and receivables:
Cash in banks = 837,089
P P
= P
= P
= P
= P
= = 837,089
P
Trade and other
receivables:
Freight 493,828 222,759 142,977 84,483 283,844 175,643 1,403,534
Passage 11,310 11,274 14,427 3,791 5,235 46,037
Service fees 168,222 93,562 58,029 34,337 114,817 117,907 586,874
Distribution 169,513 38,946 15,974 6,859 35,102 15,344 281,738
Others 228,378 91,560 57,546 99,675 17,872 8,037 503,068
Nontrade receivables 44,632 2,517 5,748 5,955 344,500 11,077 414,429
Due from related
parties 14,651 4,047 2,931 2,014 135,775 159,418
Insurance and other
claims 856,983 51,375 908,358
Advances to officers
and employees 23,718 836 597 403 192 25,746
AFS investments 6,907 6,907
Total = 2,904,661
P = 465,501
P = 298,229
P = 237,517
P = 937,337
P = 379,383
P = 5,222,628
P
As at December 31, 2012 (As restated, Note 2)

Neither past Past due but not impaired Impaired
due nor Less than 30 31 to 60 61 to 90 Over 90 financial
impaired days days days days assets Total
(In Thousands)
Loans and receivables:
Cash in banks =662,808
P =
P =
P =
P =
P =
P =662,808
P
Trade and other
receivables:
Freight 564,690 199,960 110,497 75,740 231,873 126,086 1,308,846
Passage 25,352 26,723 195 10,338 15,301 77,909
Service fees 121,317 45,916 18,118 12,540 41,320 114,396 353,607
Distribution 184,582 69,625 16,456 673 691 15,344 287,371
Others 159,612 144,027 34,675 28,814 50,283 4,768 422,179
Nontrade receivables 99,631 3,949 4,640 4,181 249,428 6,665 368,494
Due from related
parties 50,535 50,535
Insurance and other
claims 117,953 1,084 77,834 51,375 248,246
Advances to officers
and employees 40,605 601 7 118 41,331
Total =2,118,217
P =491,885
P =184,588
P =132,286
P =666,848
P =318,634
P =3,912,458
P
Liquidity risk
The Group manages its liquidity profile to be able to finance its capital expenditures and service
its maturing debt by maintaining sufficient cash during the peak season of the passage business.
The Group regularly evaluates its projected and actual cash flow generated from operations.
The Groups existing credit facilities with various banks are covered by the Continuing Suretyship
for the accounts of the Group.
The liability of the Surety is primary and solidary and is not contingent upon the pursuit by the
bank of whatever remedies it may have against the debtor or collaterals/liens it may possess. If
any of the secured obligations is not paid or performed on due date (at stated maturity or by

- 74 -
acceleration), the Surety shall, without need for any notice, demand or any other account or deed,
immediately be liable therefore and the Surety shall pay and perform the same.
The following table summarizes the maturity profile of the Groups financial assets and financial
liabilities based on contractual repayment obligations and the Groups cash to be generated from
operations and the Groups financial assets as at December 31:
2013
Less than
1 year 1 to 5 years Over 5 years Total
(In Thousands)
Financial Liabilities
Trade and other payables* P
=3,839,604 =
P =
P P
=3,839,604
Loans payable 1,344,927 1,344,927
Long-term debts 373 3,597,496 3,597,869
Obligations under finance lease 28,592 89,192 117,784
Redeemable preferred shares 6,680 6,680
P
=5,220,176 P
=3,696,057 =
P P
=8,916,233
*Excludes nonfinancial liabilities amounting to =
P349.6 million as of December 31, 2013.
2013
Less than
(In Thousands)
Financial Assets
Cash and cash equivalents P
=918,645 =
P =
P P
=918,645
Trade and other receivables 3,949,819 3,949,819
P
=4,875,371 =
P =
P P
=4,875,371
2012
Less than
(In Thousands)
Trade and other payables* P3,092,712
= P
= P
= P3,092,712
=
Loans payable 1,379,230 1,379,230
Long-term debts 993,319 2,185,297 3,178,616
Obligations under finance lease 77,724 44,857 122,581
Redeemable preferred shares 6,882 6,882
=5,549,867
P =2,293,184
P =
P =7,789,051
P
Financial Assets
Cash and cash equivalents =786,856
P P
= P
= =786,856
P
Trade and other receivables 2,839,884 2,839,884
=3,635,475
P =
P =
P =3,635,475
P
*Excludes nonfinancial liabilities amounting to =
P443.0 million as of December 31, 2012.
Trade and other payables and maturing other liabilities are expected to be settled using cash to be
generated from operations, drawing from existing and new credit lines and additional capital
contribution of the shareholders.
Foreign exchange risk
Foreign currency risk arises when the Group enters into transactions denominated in currencies
other than their functional currency. Management closely monitors the fluctuations in exchange
rates so as to anticipate the impact of foreign currency risks associated with the financial

- 75 -
instruments. To mitigate the risk of incurring foreign exchange losses, the Group maintains cash
in banks in foreign currency to match its financial liabilities.
The Groups significant foreign currency-denominated financial assets and financial liabilities as
of December 31 are as follows:
2013
Total Peso
1 2
AUD EUR NZD3 USD4 Equivalent
Financial Asset
Cash in banks $1 3 $9 $219 P9,944
=
Trade receivables 266 11,809
Insurance receivables 13 577
1 3 9 498 22,330
Trade and other payables 65 117 9,680
Obligations under finance lease 986 43,773
65 117 986 53,453
Net foreign currency denominated
assets (liabilities) ($64) (114) $9 ($488) (P
= 31,123)
1 3
$1 = P
=39.46 $1 = P
=36.21
2 4
1 = P
=60.82 $1 = P
=44.40
2012
Total Peso
AUD1 DKK2 EUR3 NZD4 USD5 Equivalent
Financial Assets
Cash in banks $2 Kr 19 $ $251 =15,315
P
Trade receivables 552 22,671
2 19 803 37,986
Trade and other payables 281 596 67 456 181 27,434
Obligations under finance lease 354 14,532
281 596 67 456 535 41,966
Net foreign currency denominated
assets (liabilities) ($279) (Kr596) (48) ($456) $268 (P
= 3,980)
1 4
$1 = P
=42.67 $1 = P
=33.66
2 5
Kr1 = =
P7.31 $1 = P
=41.05
3
1 = P
=54.27
The Group has recognized foreign exchange revaluation gains amounting to P =1.3 million in 2013
and P
=0.5 million in 2012 and foreign exchange loss in 2010 amounting to P
=12.9 million.
The following table demonstrates the sensitivity to a reasonably possible change in the foreign
currency exchange rates, with all other variables held constant, of the Groups profit before tax as
at December 31, 2013 and 2012.
Appreciation/
(Depreciation) of
Foreign Effect on Income Before Tax
Currency 2013 2012
(In Thousands)
Australian Dollar (AUD) +5% (P
=126) (P
=595)
-5% 126 595
Euro (EUR) +5% (347) 130
-5% 347 (130)
New Zealand Dollar (NZD) +5% 16 (767)
-5% (16) 767
US Dollar (USD) +5% (1,083) 550
-5% 1083 (550)
Danish Kroner (DKK) +5% (218)
-5% 218

- 76 -
There is no other impact on the Groups equity other than those already affecting profit or loss.
Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Groups financial
instruments will fluctuate because of changes in market interest rates.
Borrowings issued at fixed rates exposes the Group to fair value interest rate risk. The Groups
borrowings are subject to fixed interest rates ranging from 4.5% to 8.5% for 10 years in 2013 and
2.3% to 9.7% for 10 years in 2012.
The Groups = P4.0 billion loans under the OLSA includes P =2.0 billion loans which bear variable
interest rates and exposes the Group to cash flow interest rate risk.
The sensitivity of the consolidated statement of income is the effect of the assumed changes in
interest rates on the consolidated income before income tax for one year, based on the floating rate
non-trading financial liabilities held at December 31, 2013 with other variables held constant:
Changes in Effect on income before tax

interest rates 2013 2012
(In Thousands)
For more than one year +80 basis points (P
=28,762) (P
=10,523)
-80 basis points 28,762 10,523
Changes in Effect on equity

interest rates 2013 2012
(In Thousands)
For more than one year +80 basis points (P
=20,133) (P
=7,366)
-80 basis points 20,133 7,366
Equity price risk

Equity price risk is the risk that the fair value of traded equity instruments decreases as the result
of the changes in the levels of equity indices and the value of the individual stocks.
As at December 31, 2013 and 2012, the Groups exposure to equity price risk is minimal.
The effect on equity (as a result of a change in fair value of equity instruments held as AFS
investments as of December 31, 2013 and 2012) due to reasonably possible change in equity
indices, with all other variables held constant, follows:
Increase (decrease)
in PSE index Effect on equity
(In Thousands)
2013 55% P
=352
(55%) (352)
2012 34% 212
(34%) (212)
The impact on the Groups equity excludes the impact of transactions affecting the consolidated
statements of comprehensive income.
Capital Risk Management Objectives and Procedures

- 77 -
The Groups capital management objectives are to ensure the Groups ability to continue as a
going concern, so that it can continue to provide returns for shareholders and benefits for others
stakeholders and produce adequate and continuous opportunities to its employees; and to provide
an adequate return to shareholders by pricing products/services commensurately with the level of
risk.
The Group sets the amount of capital in proportion to risk. It manages the capital structure and
makes adjustments in the light of changes in economic conditions and the risk characteristics of
the underlying assets, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, or sell assets to reduce debt.
The Group considers its total equities as its capital. The Group monitors capital on the basis of the
carrying amount of equity as presented on the face of the balance sheet. The capital ratios are as
follows:
2013 2012
Assets financed by:
Creditors 75% 74%
Stockholders 25% 26%
As of December 31, 2013 and 2012, the Group met its capital management objectives.
34. Fair Value of Financial Instruments and Nonfinancial Assets
The table below presents a comparison by category of the carrying amounts and fair values of the
Groups financial instruments as at December 31, 2013 and 2012. Financial instruments with
carrying amounts reasonably approximating their fair values are no longer included in the
comparison.
2013 2012
Carrying Carrying
Amount Fair Value Amount Fair Value
(In Thousands)
Long-term debts =3,597,869
P =4,111,311
P =3,178,616
P =3,475,112
P
Obligations under finance lease 117,784 125,164 122,581 94,283
=3,715,653
P =4,236,475
P =3,301,197
P =3,569,395
P
Nonfinancial Assets
Vessels in operations =3,978,216
P =4,855,000
P =3,661,010
P =4,715,000
P
Investments property 9,763 66,900 9,763 66,900
The following methods and assumptions are used to estimate the fair value of each cash flow of
financial instruments and nonfinancial assets:
Financial Instruments
Cash and cash equivalents, trade and other receivables, trade and other payables, refundable
deposits and RPS
The carrying amounts of these financial instruments approximate their respective fair values due
to their relatively short-term maturities.

- 78 -
Loans payable
The carrying value of loans payable that reprice every three (3) months, approximates their fair
value because of recent and regular repricing based on current market rate. For fixed rate loans,
the carrying value approximates fair value due to its short term maturities, ranging from three
months to twelve months.
AFS investments
The fair values of AFS investments are based on quoted market prices, except for unquoted equity
shares which are carried at cost since fair values are not readily determinable.
Long-term debts
Discount rates of 2.6% and 4.7% were used in calculating the fair value of the long term debt as of
December 31, 2013 and 2012, respectively.
Obligations under finance lease

The fair values of obligation under finance lease are based on the discounted net present value of
cash flows using discount rates of 3.5% to 3.7% as at December 31, 2013 and 1.45% to 4.82% as
at December 31, 2012.
Nonfinancial Assets
The fair values of the Groups vessels in operations and investment property have been
determined by the appraisal method by independent external appraisers based on the highest and
best use of property being appraised.
Vessels in operations
The fair values of the vessels in operations are determined using the replacement fixed asset
approach. This method requires an analysis of the vessels by breaking them down into major
components. Bills of quantities for each component using the appropriate basic unit are prepared
and related to the unit cost for each component developed on the basis of current costs of
materials, labor, plant and equipment prevailing in the locality to arrive at the direct costs of the
components. Accrued depreciation was based on the observed condition.
Investment property
The fair value of the investment property is determined using the Market Data Approach, which is
a process of comparing the subject property being appraised to similar comparable properties
recently sold or being offered for sale.
Fair Value Hierarchy

Only the Groups AFS investments, which are classified under Level 1, are measured at fair value.
During the year ended December 31, 2013 and 2012, there were no transfers between Level 1 and
Level 2 fair value measurements, and no transfers into and out of Level 3 fair value
measurements.

- 79 -
2GO GROUP, INC.

AND SUBSIDIARIES
ITEM 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

- 80 -
KEY PERFORMANCE INDICATORS (KPI)
The following KPIs are used to evaluate the financial performance of 2GO Group and its subsidiaries.
The amounts are in millions of pesos except for the financial ratios.
a. Revenues 2GO Shipping revenues are mainly composed of freight and passage revenues and
they are recognized when the related services are rendered. Total Revenue for the first quarter
ended March 31, 2014 is P
=3.3 billion.
b. Gross Profit- is computed as revenues less operating costs and expenses (excluding general and
administrative expenses). Gross profit for the first quarter ended March 31, 2014 is = P437.6
million.
c. Income (Loss) before income tax (IBT) is the earnings of the company before income (loss)
tax expense. The Income before income tax for first quarter is P
=155.8 million.
d. Debt-to-equity ratio is determined by dividing total liabilities over stockholders equity. 2GO
Group debt-to-equity ratio for the first quarter of 2014 is 2.94:1.00. Total liabilities and equity
stood at P
=9.4 billion and =
P3.2 billion respectively.
e. Current ratio is measured by dividing total current assets by total current liabilities. The
Companys current ratio as of March 31, 2014 is 1.13:1:00. Total current assets is P
=6.3 billion and
total current liabilities is =
P5.6 billion.
The following table shows comparative figures of the Top Five key performance indicators (KPI) for
the first quarter of 2014 versus 2013 (amounts in millions except for the financial ratios) based on the
consolidated financial statements of 2GO Group, Inc and its subsidiaries formerly known as ATS
Consolidated (ATSC), Inc.:
Consolidated 2GO and Subsidiaries 31-Mar-2014 31-Mar-2013

Revenues 3,319,574 3,667,188
Gross Profit 437,595 489,901
IBT 155,838 126,002
Debt-to-Equity ratio 2.94:1.00 3.06:1.00
Current Ratio 1.13:1.00 1.14:1.00
Note: The figures above are in PMM except otherwise indicated.

- 81 -
CONSOLIDATED INCOME STATEMENT
In P' Thousands Period Ended Mar 31 % to Revenue

%
2014 2013 '14 vs '13 variance 2014 2013
REVENUES
Freight 1,139,625 1,297,086 (157,460) (12%) 34% 35%
Passage 741,077 852,241 (111,164) (13%) 22% 23%
Service fees 613,923 662,010 (48,087) (7%) 18% 18%
Sale of goods 605,619 506,007 99,611 20% 18% 14%
Others 219,331 349,844 (130,513) (37%) 7% 10%
3,319,574 3,667,188 (347,614) (9% ) 100% 100%
COSTS AND EXPENSES
Operating 2,045,160 2,425,372 (380,212) (16%) 62% 66%
Terminal 347,786 326,371 21,415 7% 10% 9%
Overhead 237,928 288,083 (50,154) (17%) 7% 8%
Cost of goods sold 489,033 425,544 63,489 15% 15% 12%
3,119,908 3,465,369 (345,462) (10% ) 94% 94%
OTHER INCOME (CHARGES)
Interest and financing charges (73,554) (104,723) 31,170 (30%) (2%) (3%)
Interest Income 4,801 8,146 (3,345) (41%) 0% 0%
Gain (Loss) on disposal of property and equipment (68) 6,369 (6,438) (101%) (0%) 0%
Foreign exchange gain (loss) 212 51 162 320% 0% 0%
Equity in net earnings (losses) of associates 6,498 12,188 (5,691) (47%) 0% 0%
Others - net 18,282 2,152 16,130 750% 1% 0%
Impairment 0 0 0 0% 0% 0%
INCOME (LOSS) BEFORE INTEGRATION (43,828) (75,817) 31,989 (42% ) (1% ) (2% )
COSTS 155,838 126,002 29,837 24%
PROVISION FOR (BENEFIT FROM) INCOME
TAX
Current 20,851 29,597 (8,746) (30%) 1% 1%
Deferred 0 - 0 0% 0% 0%
20,851 29,597 (8,746) (30% ) 1% 1%
NET INCOME (LOSS) 134,987 96,404 38,583 (40% ) 4% 3%
ATTRIBUTABLE TO:
Equity holders of the parent 131,894 94 38,203 41% 0% 0%
Minority interests 3,093 3 379 14% 0% 0%
134,987 96,405
Basic/Diluted Income (Loss) Per Common Share

(Note 31) 0.0867 (0.1497)
Results of Operations
2GO Group, Inc.s net profit after tax jumped by 40% or P135.0 million from P96.4 million for the
same period last year basically due to the major contribution of new principals from SOI, 2GO
Express, 2GO Logistics, SCVASI, and International Logistics that increased the supply chain business
revenue by 20% or P99.6 million. Despite of the decreased in the total consolidated revenues by 2% to
P3.3 billion in 2014 from P3.7 billion in 2013 due to the lesser number of operating vessels, the Group
managed to maintain its positive bottom line by implementing a more stringent cost control procedures
implemented that reduces its costs and expenses by 10% or P3,119.9 million from P3,465.4 million.

- 82 -
Earnings per Share
Earnings Per Share is computed by dividing Net Income (Loss) Attributable to Equity Holders of the
Parent over weighted average number of common shares outstanding for the year. Earnings per share
for the first quarter of 2014 stood at 0.0539/share compared to 0.0383/share the same period last year.
Other changes (+/-5% or more) in the financial statement not covered in the above discussion
1Q 2014 vs. 1Q 2013
Revenue
>7% or P48 million decrease in service fees
>20% or P100 million increase in sale of goods
>12% or P157 million decrease in freight revenue
> 13% or P111 million decrease in passage revenue
>37% or P63 million increase in other revenues
Costs & Expenses

>17% or P50 million decrease in overhead costs
>7% or P21 million increase in terminal costs
>15% or P63 million increase in cost of goods sold
>16% or 380 million decrease in operating costs
Other Income / (Charge)

>30% or P31 million decrease in financing cost
>41% or P3 million decrease in interest income

- 83 -
BALANCE SHEETS
Unaudited Audited VARIANCE % to TOTAL
In P' Thousands Mar 2014 Dec 2013 Amount % 2014 2013
ASSETS
Current Assets
Cash and cash equivalents 626,159 918,645 (292) (32%) 5% 7%
Trade and other receivables 4,030,630 3,949,819 81 2% 32% 32%
Inventories 449,968 421,957 28 7% 4% 3%
Other current assets 1,187,339 1,054,409 133 13% 9% 8%
6,294,096 6,344,830 (51) (1% ) 50% 51%
Asset held for sale - - 0 0% 0% 0%
Total Current Assets 6,294,096 6,344,830 (51) (1% ) 50% 51%
Noncurrent Assets
Investments in associates 188,475 181,977 6 4% 1% 1%
Investment Property 9,763 9,763 (0) (0%) 0% 0%
Available-for-sale investments 6,907 6,907 0 0% 0% 0%
Property and equipment 5,197,754 5,054,932 143 3% 41% 40%
Deferred tax assets 504,982 477,076 28 6% 4% 4%
Goodwill 250,450 250,450 0 0% 2% 2%
Software development costs 15,810 15,379 0 3% 0% 0%
Other noncurrent assets 195,610 180,590 15 8% 2% 1%
Total Noncurrent Assets 6,369,750 6,177,074 193 3% 50% 49%
TOTAL ASSETS 12,663,845 12,521,904 142 1% 100% 100%
- 0 0 0
LIABILITIES AND EQUITY

Current Liabilities
Loans payable 1,347,873 1,344,927 3 0% 11% 11%
Trade and other payables 4,158,633 4,189,244 (31) (1%) 33% 33%
Current portion of: 0 0% 0% 0%
Long-term debt 243 373 (0) (35%) 0% 0%
Obligations under finance lease 27,342 28,592 (1) (4%) 0% 0%
Redeemable preferred shares 6,643 6,680 (0) (1%) 0% 0%
Income tax payable 9,643 5,772 4 67% 0% 0%
Total Current Liabilities 5,550,378 5,575,588 (25) (0% ) 44% 45%
Noncurrent Liabilities
Long-term debt - net of current portion 3,598,849 3,597,496 1 0% 28% 29%
Obligations under finance lease - net of current portion 87,285 89,192 (2) (2%) 1% 1%
Accrued retirement benefits 165,232 167,243 (2) (1%) 1% 1%
Other noncurrent liabilities 44,973 9,369 36 380% 0% 0%
Total Noncurrent Liabilities 3,896,339 3,863,300 33 1% 31% 31%
Total Liabilities 9,446,717 9,438,888 8 0% 75% 75%
Equity Attributable to Equity Holders of the Parent Company:

Share capital 2,484,653 2,484,653 (0) (0%) 20% 20%
Additional paid-in capital 910,901 910,901 (0) (0%) 7% 7%
Excess of cost over net asset value of investments -10,912 -9,835 (1) 11% (0%) (0%)
Acquisitions of non-controlling interests -3,093 -3,243 0 (5%) (0%) (0%)
Retained earnings -47,420 -179,314 132 (74%) (0%) (1%)
Other Comprehensive Income -86,353 -86,405 0 (0%) (1%) (1%)
Treasury shares -58,715 -58,715 0 (0%) (0%) (0%)
3,189,062 3,058,042 131 4% 25% 24%
Non-controlling Interests 28,067 24,975 3 12% 0% 0%
Total Equity 3,217,128 3,083,017 134 4% 25% 25%
TOTAL LIABILITIES AND EQUITY 12,663,845 12,521,905 141,940 5% 100% 100%

- 84 -
The Groups total assets for the first quarter ending March 31, 2014 was P12.66 billion, 1% higher
than P12.52 billion as of the Dec 31, 2013 mainly due to increase in trade and other receivables by 2%
or P81 million relative to the increase in revenues from the supply chain group. Consequently,
inventories increased by P28 million or 7% in relation to the demands of new principals in building up
supply chain inventory.
The bulk of the increase in total assets came from non-current assets, which at the start of the quarter
stood at P6.18 billion and went up to P6.37 billion as of March 31, 2014. Property and equipment
increased by P143M to P5.19 billion in the first quarter of 2014 from P5.05 billion at the end of 2013
mainly due to the drydocking of its additional vessel, MV Saint Francis Xavier (SFX).
Total equity stood at P3.22 billion at the end of the first quarter of 2014, 4% higher compared to the to
the period ending December 31, 2013 at P3.08 billion due to positive results in the operations of the
business.
CASH FLOW STATEMENTS

Period Ended March
In P' MM 2014 2013
Net cash provided by operating activities 139,652 650,332

Net cash used in investing activities (357,489) (189,677)
Net cash provided (used in) financing activities (74,646) (328,866)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (292,483) 131,789
Cash and cash equivalents decreased by 32% or P292 million to P626 million in the first quarter of
2014 from P919 million in December 2013 mainly due to major capital expenditures and quarterly
interest payments on the long-term loan.
Other Information
i. Other material events and uncertainties known to management that would address the past and
would have an impact on 2GOs future operations are discussed below.
ii. Total fuel/lubes expense is a major component of 2GOs total costs and expenses. 2GO is
constantly looking for ways to reduce fuel consumption to lessen the impact of the increasing
fuel prices on the bottom line.
iii. Except as disclosed in the management discussion and notes to the financial statements, there
are no other known events that will trigger direct or contingent financial obligation that is
material to 2GO, including any default or acceleration of an obligation. There are also no
other known trends, events or uncertainties that have had or that are reasonably expected to
have a material favorable or unfavorable impact on revenues or income from operations.
iv. All significant elements of income or loss from continuing operations are already discussed in
the management discussion and notes to financial statements. Likewise any significant
elements of income or loss that did not arise from 2GO continuing operations are disclosed
either in the management discussion or notes to financial statements.
v. There is no material off-balance sheet transaction, arrangement, obligation, and other

relationships of 2GO with unconsolidated entities or other persons created during the reporting
period.

- 85 -
vi. Seasonal aspects of the business are considered in 2GOs financial forecast.
vii. 2GO does not expect any liquidity or cash problem within the next twelve months. Capital
expenditures are funded through cash generated from operations and additional borrowings.
Company Outlook
2GO Group yield a 51% revenue for Shipping and 49% of Non-Shipping for the first quarter of 2014.
This shows that the Supply Chain is rapidly growing and transforming to drive the Group to become a
total logistics solutions provider.
Shipping business begins its transformation into its new role as an enabler, which help propel the
Supply Chain group to its desired growth levels.
2GO Group capitalizes its distinct competitive advantage, a Shipping component that other logistics
companies do not have. This allows the Group to gain the confidence of customers by assuring them
of reliability in meeting their desired schedules. Likewise, with the varied companies under it, the
Group had the widest reach --- for both domestic and international transactions.
The Group will continue implementing a more robust management reporting system to closely
monitor the financial results and operating performance of the business units. This ensures better
analysis that serve as a tool for management to properly guide the company to its target profitability.

- 86 -
2GO GROUP, INC. AND SUBSIDIARIES

FINANCIAL SOUNDNESS INDICATORS
FOR THE PERIOD ENDED MARCH 31, 2014 AND DECEMBER 31, 2013
M a rch D e ce mbe r
2014 2013
1 D e bt- to - E quity
Total Liabilities 9,446,717 9,438,888
Total Stockholders' Equity 3,217,129 3,083,016
Debt-to-Equity Ratio 2.94 3.06
2 Curre nt R a tio
Total Current Assets 6,294,096 6,344,830
Current Ratio 1.13 1.14
3 Quick R a tio
Total Quick Assets (Cash, MS, Receivables) 4,656,789 4,868,464
Quick Ratio 0.84 0.87
4 S o l v e ncy R a tio
Total Assets 12,663,846 12,521,904
Total Liablities 9,446,717 9,438,888
1.34 1.33
5 D e bt- to - A sse t R a tio / D e bt R a tio

Total Liabilities 9,446,717 9,438,888
Total Assets 12,663,846 12,521,904
Debt-to-Asset Ratio 0.75 0.75
6 A sse t- to - E quity R a tio

Total Assets 12,663,846 12,521,904
Total Stockholders' Equity 3,217,129 3,083,016
Equity-to-Asset Ratio 3.94 4.06
7 R e turn On A sse ts o r " R OA "

Net Income 134,987 227,081
Average Total Assets 12,592,875 11,908,421
ROA 0.01 0.02
8 R e turn o n E quity o r " R OE "

Net Income 134,987 227,081
Average Total Stockholders' Equity 3,150,073 3,001,871
ROE 0.04 0.08
9 Gro ss Pro fit M a rgin

Sales 3,319,574 13,373,193
Cost of Services (Direct Costs) 2,881,979 11,651,991
Gross Profit 437,595 1,721,202
0.13 0.13
1 0 N e t Pro fit M a rgin

Net Profit 134,987 227,081
Sales 3,319,574 13,373,193
0.04 0.02
1 1 Price pe r E a rnings R a tio

Price Per Share 2.51 1.70
Earnings per Common Share 0.06 0.09
45.48 19.61
1 2 I nte re st Co v e ra ge R a tio
EBIT 229,392 1,081,787
Interest Expense 73,554 369,014
Interest Coverage Ratio 3.12 2.93

- 87 -
2GO GROUP, INC. AND SUBSIDIARIES

MAP OF THE CONGLOMERATE OR GROUP OF COMPANIES OF THE REGISTRANT
MARCH 31, 2014
Negros Holdings Management Corporation KGLI BV

68% 32%
KGLI-NM China-ASEAN Marine BV

60% 39%
Negros Navigation Co., Inc.
BNDISI NMISI 2GO SMI BMI

100% 100% 88.31% 100% 100%
WSI EXPRESS SFFC MCC NALMHCI SCVASI

100% 100% 100% 33% 100% 100%
100% 100% 100% 50% 78.40% 100% 80% 80% 58.96% 50% 51.14% 100% 100% 48%
LOGISTICS SOI HLP HATS KLN WRR J&A RDC NHTC STI SFC SSI AEWI USDI
62.50% 20% 20%

KALI
Legend:
KGLI BV KGL Investment BV NALMHCI NN-ATS Logistics Management & Holdings Co., Inc.
KGLI -NM KGLI-NM Holdings, Inc. SCVASI Special Container and Value Added Services, Inc.
BNDISI Brisk Nautilus Dock Integrated Services, Inc. LOGISTICS 2GO Logistics, Inc.
NMISI Negrense Marine Integrated Services, Inc. SOI Scanasia Overseas, Inc.
2GO 2GO Group, Inc. HLP Hapag Lloyd Philippines, Inc.
SMI Sea Merchants, Inc. HATS Hansa Meyer-ATS Projects, Inc.
BMI Bluemarine (BMI) Inc. KLN KLN Logistics Holdings Philippines, Inc.
AEWI Astir Engineering Works, Inc. WRR WRR Trucking Corporation
USDI United South Dockhandlers, Inc. KALI Kerry-ATS Logistics, Inc.
WSI WG&A Supercommerce Incorporated SSI Supersail Services Inc.
EXPRESS 2GO Express, Inc. NHTC North Harbor Tugs Corporation
SFFC Supercat Fast Ferry Corporation SFC Sun-Gold Forwarding Corporation
MCC MCCP Transport Philippines, Inc. STI Super Terminals, Inc.
RDC Red.Dot Corporation J&A J&A Services Corporation

- 88 -
2GO GROUP, INC.

15/F Times Plaza Bldg., cor. Taft, UN. Ave., Ermita Manila
STATEMENTS OF RETAINED EARNINGS AVAILABLE

FOR DIVIDEND DECLARATION
MARCH 31, 2014 AND DECEMBER 30, 2013
(Amount in Philippine Currency )
2014 2013
Unappropriated Retained Earnings, Beginning, as adjusted to available for

dividends distribution (820,164,179.86) (1,195,293,972.13)
Add: Net income actually earned/realized during the period

Net income (loss) during the period closed to Retained Earnings 79,281,617.69 45,778,643.95
Less: Non-actual/unrealized income net of tax for the period/accumulated
Unrealized foreign exchange gain - net (except those attributable to Cash and
Cash Equivalents)
Tax benefit (Deferred Tax Asset) during the period - 329,351,148.32
Other unrealized gains or adjustments to the retained earnings as a result of
certain transactions accounted for under the PFRS, negative goodwill - -
Sub-total 79,281,617.69 375,129,792.27
Add: Non-actual losses

Adjustment due to deviation from PFRS/GAAP - loss
Fair value adjustment (M2M gains), biological assets, in 2004 offset against
losses in 2005.
Accretion of interest on RPS under PAS 39
Unrealized foreign exchange gain - net (except those attributable to Cash and
Cash Equivalents) in 2004 realized in 2008 - -
Sub-total - -
Add(Less): Movement during the period

Dividend declarations
Appropriations of Retained Earnings
Reversals of appropriations
Treasury shares - -
- -
TOTAL RETAINED EARNINGS, END, AVAILABLE FOR DIVIDEND (740,882,562.17) (820,164,179.86)

- 80 -
SIGNATURE
Pursuant to the requirements of the Securities Regulation Code, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
Registrant 2GO Group, Inc. [formerly ATS Consolidated (ATSC), Inc.]
Signature and Title JEREMIAS E. CRUZABRA

Chief Finance Officer and Corporate Information Officer
Date May 20, 2014

2go Sec 17-q March 2014 5 20 14 Final v1. - 4D668

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COVER SHEET

(Companys Full Name)

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

Jeremias E. Cruzabra (02) 528-7540

(Secondary License Type, If Applicable)

CFD Articles 1, 2 and 3

Total Amount of Borrowings

To be accomplished by SEC Personnel concerned

File Number LCU

1. For the quarterly period ended March 31, 2014

2. Commission identification number 4409 3. BIR Tax Identification No 000-313-401-000

2GO GROUP, INC.

6. Industry Classification Code: (SEC Use Only)

(02) 528-7540, (02) 528-7412

Title of Each Class Number of Shares of Common Stock Outstanding

Common Stock 2,446,136,400

12. Indicate by check mark whether the registrant:

2GO SEC Form 17-Q First Quarter 2014

ITEM 1. FINANCIAL STATEMENTS

1. Unaudited Consolidated Balance Sheets as of March 31, 2014 and Audited

3. Unaudited Consolidated Statements of Comprehensive Income for the Three Months

4. Unaudited Consolidated Statement of Changes in Equity as of March 31, 2014 and

6. Note to Consolidated Financial Statements 1 - 79

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL

1. Key Performance Indicators and Results of Operations 80 - 84

3. Financial Soundness Indicators 86

4. Map Of The Conglomerate Or Group Of Companies Of The Registrant 87

5. Statements of Retained Earnings Available For Dividend Declaration 88

2GO SEC Form 17-Q First Quarter 2014

Unaudited Consolidated Financial Statements

2GO SEC Form 17-Q First Quarter 2014

2GO GROUP, INC.

March 31, 2014 December 31, 2013

LIABILITIES AND EQUITY

2GO SEC Form 17-Q First Quarter 2014

March 31, 2014 December 31, 2013

See accompanying Notes to Consolidated Financial Statements.

2GO SEC Form 17-Q First Quarter 2014

2GO GROUP, INC.

Quarters Ended March 31

Basic Income Per Common Share (Note 31) P

See accompanying Notes to Consolidated Financial Statements.

2GO SEC Form 17-Q First Quarter 2014

2GO GROUP, INC.

March 31, 2013

NET INCOME (LOSS) P

OTHER COMPREHENSIVE INCOME (LOSS)

TOTAL COMPREHENSIVE INCOME (LOSS)

See accompanying Notes to Consolidated Financial Statements.

2GO SEC Form 17-Q First Quarter 2014

2GO GROUP, INC.

Attributable to Equity Holders of the Parent Company

2GO SEC Form 17-Q First Quarter 2014

2GO SEC Form 17-Q First Quarter 2014

2GO GROUP, INC.

Period Ended March 31

2GO SEC Form 17-Q First Quarter 2014

Period Ended March 31

CASH FLOWS FROM FINANCING ACTIVITIES

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON

NET INCREASE (DECREASE) IN CASH

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS