Lorenzo Shipping Corporation

Background
LORENZO SHIPPING CORPORATION (LSC) is a leading liner shipping company
engaged in containerized cargo transport. LSC continually strives to provide
excellent service and dedication in helping customers find solutions to their
transport needs. With customer-focused processes, dedicated employees and
results-driven management standards, LSC commits operations above industry
standards that enable its customers to ensure availability of its products to end
customers.
Lorenzo Shipping Corporation maintains a fleet of seven vessels calling 10 major
ports nationwide, namely: Manila, Bacolod, Iloilo, Cebu, Dumaguete, Cagayan de
Oro, Zamboanga, Davao, Cotabato and General Santos.

History
LSC is founded and established. By the late 70's, LSC shifts its business
emphasis from being a break-bulk cargo carrier to containerized cargo
operations.
199 Neptune Orient Lines (NOL), Singapore's national shipping line, becomes an
investor.
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In December, LSC and NOL enter into Technical Support Agreement.

In July, LSC debuts in the Philippine Stock Exchange as a publicly-listed

company.
- LSC celebrates its 25 years of continuous service to the shipping industry
with the theme, "Lorenzo Shipping Corporation: 25 Years of Shipping
Excellence".
199 - In January, "We carry. We move. We deliver." Is launched as the company's
slogan.
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Lorenzo Shipping Corporation Integrated Systems (LSCIS) goes online.

LSC launches its new website, www.lorenzoshipping.com, giving its customers
access to the weekly vessel schedules.
National Marine Corporation (NMC) purchases the entire equity of NOL in LSC.

LSC acquires a 250-TEU vessel and renames it M/V 'Lorcon Manila'. During the
same year, the 2,500 sq. meter covered LCL (Less-than-Container-Load)
warehouse inside North Harbor is inaugurated.
200 - LSC upgrades its container handling into straddle carrier operations at its
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container yards in Manila, Cebu and Cagayan de Oro.

LSC receives a Safety Recognition Award from the Bureau of Working
Conditions of the Department of Labor and Employment.
- LSC acquires a 797-TEU Vessel and renames it MV 'Lorcon Dumaguete'. Also,
LSC receives a Gold Award from Coca-Cola Bottlers Philippines Inc. for
Quality, Servic
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SERVICES
Door to Door
We pick-up the cargoes at your premises and deliver to your
consignee's door.
Shippers' load, weight and count.
Special equipment/materials needed for stuffing or stripping shall be
provided by the shipper or consignee.
Pier to Door
We receive your cargoes at our yard (CY) and deliver to your
consignee's door.
Shippers' load, weight and count.
Special equipment/materials needed for stuffing or stripping shall be
provided by the shipper or consignee.
Door to Pier
We pick-up your cargoes at your door and consignee picks-up cargo at
our yard (CY).
Shippers' load, weight and count.
Special equipment/materials needed for stuffing or stripping shall be
provided by the shipper or consignee.
Pier to Pier
We receive your cargoes at our yard (CY) and consignee picks-up cargo
at our yard.
Shippers' load, weight and count.
Special equipment/materials needed for stuffing or stripping shall be
provided by the shipper or consignee.

Lorenzo Shipping Corporation

Statement of Financial Performance
Years Ended December 31 2013

FREIGHT REVENUE
1,837,685,223
DIRECT COSTS
Cost of services
Terminal expenses
1,583,873,962
GROSS PROFIT
253,811,261
GENERAL AND ADMINISTRATIVE
EXPENSES
FINANCE COSTS AND OTHER
CHARGES
OTHER INCOME (CHARGES)
(194,995,539)
INCOME BEFORE INCOME TAX
58,815,722
PROVISION FOR (BENEFIT FROM)
INCOME TAX
Current
Deferred
3,573,939
NET INCOME
62,389,661

1,360,358,624
223,515,338

142,400,335
26,729,793
25,865,411

2,003,485
5,577,424

Lorenzo Shipping Corporation

Statement of Financial Position
December 31 2013
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments and other current assets
971,853,496

191,193,593
606,103,744
30,460,277
144,095,882

Noncurrent Assets
Property and equipment
1,681,456,399
Deferred income tax asset
39,778,907
Other noncurrent assets
16,936,697
1,738,172,003
TOTAL ASSETS
2,710,025,499
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses
357,479,907
Short-term borrowings
39,158,822
Current portion of:
Long-term borrowings
213,979,430
Obligations under finance lease
25,811,012
636,429,171
Noncurrent Liabilities
Long-term borrowings - net of current portion 648,316,609
Obligations under finance
lease - net of current portion
105,948,729
Pension obligation
64,581,310
818,846,648
EQUITY
Common stock
555,652,251
Additional paid-in capital
459,791,492

Retained earnings
242,431,787
Treasury shares
(3,125,850)
1,254,749,680 TOTAL LIABILITIES AND EQUITY
2,710,025,499

Transactions
1. Freight Revenue
March 19, 2014 LSC receives P619,201,115 from Airport Equipment
and Logistics Corp. for the freight services rendered on account.
June 6, 2014 LSC receives cash payment from Magsaysay Marine
Services In. for the freight services for P121,508,176.
August 24, 2014 LSC receive P50,512,315 from OYG Transport Inc. for
the freight services on account.
November 17, 2014 LSC receive a P368,432,611 for the freight
services rendered to One Stop Logistic Solution Inc on account.
December 15, 2014 LSC receive cash payment from NMC Container
Lines Inc. P258,782,311 for the freight services.
2. Cost of Services
January 9, 2014 LSC paid P432,570.380 for the fuel, diesel and
lubricants used for operation.
January 26, 2014 LSC paid P386,950,620 for the materials and spare
parts.
July 26, 2014 LSC recognized the insurance vessels expense
P90,981,767
December 31, 20124 LSC recognize the depreciation expense for
vessels used in operation P323,438,570.
December 31, 2014 LSC paid P296,680,395 for the outside services
incurred.
December 31, 2014 LSC paid a total amount of P96,468,769 for the
salaries, wages and other benefits incurred for the personnels.
3. Terminal Cost
April 30 2014, LSC paid P53,687,280 for the rental expense for
container van.

June 30 2014 LSC paid rental expense of warehouse and offices

P6,8932,110 .
October 30, 2014 LSC paid P48,650,300 for equipment rental.
December 31, 2014 LSC paid P13,239,244 for the outside service
related to terminal expense.
December 31, 2014 LSC paid an amount of P15,380,253 for the
container rental.

4. General and Administrative Expenses

May 28, 2014 LSC paid P5,385,000 for taxes and licenses.
September 23, 2014 LSC incurred repair and maintenance of machine
unrelated to operation for P2,538,432.
September 28, 2014 LSC purchased office supplies for P3,238,756 on
account.
October 2, 2014 LSC conduct a employees training and paid a total
amount of P2,612,080.
November 24, 2014 LSC incurred total amount of P5,376,990 for
advertising the company.

December 31, 2014 LSC recognized the depreciation of

buildings/offices for P10,738,300.
December 31, 2014 LSC paid P7,138,455 for the communication, light
and power.
5. Finance Cost and Other Charges
March 31, 2014 LSC pays an installment for long term borrowings a
total of P200,000,000 with interest of P35,268,770.
April 30, 2014 LSC pays an interest for short term borrowing
P1,986,237.
December 31, 2014 LSC pays an annual payment of lease liability
P2,500,000 and an interest of P1,500,219.
6. Shareholders Equity
February 14, 2014 LSC issued 100,000 shares, P5.90 par value to A
Corp. in exchanged of Legal Service P600,000.
June 19, 2014 LSC receives a cash subscription from J Corp. 200,000
shares; 5.90 par value at P6.50 per share.
December 15, 2014 LSC receives a cash subscription from S Corp.
150,00 shares P5.90 par value at P8.50 per share.