Mpic 2016 17a - Final

COVER SHEET
for
SEC FORM 17-A
SEC Registration Number
C S 2 0 0 6 0 4 4 9 4
COMPANY NAME
M E T R O P A C I F I C I N V E S T M E N T S C O R P
O R A T I O N A N D S U B S I D I A R I E S
PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province )
1 0 t h F l o o R , MG O B u i l d i n g , L e g a
s p i c o r n e r D e l a R o s a S t r e e t s ,
L e g a s p i V i l l a g e , M a k a t i C i t y
Form Type Department requiring the report Secondary License Type, If Applicable
A C F S
COMPANY INFORMATION
Companys Email Address Companys Telephone Number Mobile Number
info@mpic.com.ph +632-888-0888
No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
1,313 as of 12.31.2016 Last Friday of May December 31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
Mr. David J. Nicol djnicol@mpic.com.ph +632-888-

0888
CONTACT PERSONs ADDRESS
10/F MGO Building, Legaspi corner Dela Rosa Streets

Legaspi Village, Makati 0721 Philippines
NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission
within thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporations records with
the Commission and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its
deficiencies.
12. Check whether the registrant:
a) has filed all reports to be filed by Section 17 of the SRC and SRC Rule 17 thereunder or Section
11 of the RSA and RSA Rule 11 (1)-1 thereunder and Sections 26 and 141 of the Corporation
Code of the Philippines during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports);
Yes [ x ] No [ ]
b) has been subject to such filing requirements for the past 90 days.
Yes [ x ] No [ ]
13. State the aggregate market value of the voting stock held by non-affiliates of the registrant. The
aggregate market value shall be computed by reference to the price at which the stock was sold; or
the average bid and asked price of such stock, as of a specified date within sixty (60) days prior to
the date of filing. If a determination as to whether a particular person or entity is an affiliate cannot
be made without involving unreasonable effort and expense, the aggregate market value of the
common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under
the circumstances, provided the assumptions are set forth in the Form.
The aggregate market value of voting stocks held by non-affiliates representing 57.81% of
outstanding common shares is P
=109,645 million, computed on the basis of the closing price as at
March 31, 2017 of P
=6.02 per share.
METRO PACIFIC
INVESTMENTS
CORPORATION
SEC FORM 17-A
December 31, 2016

TABLE OF CONTENTS
PART I BUSINESS AND GENERAL INFORMATION ...................................................... 1

Item 1. Description of Business ........................................................................................ 1
Item 2. Description of Properties .................................................................................... 31
Item 3. Legal Proceedings............................................................................................... 32
Item 4. Submission of Matters to a Vote of Security Holders ........................................ 32
PART II OPERATIONAL AND FINANCIAL INFORMATION ...................................... 33
Item 5. Market for Registrants Common Equity and Related Stockholder Matters...... 33
Item 6. Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD & A) ..................................................................................................... 37
Financial Highlights and Key Performance Indicators ....................................... 37
Operational Review ............................................................................................ 39
I - MPIC Consolidated ........................................................................................ 39
II - Operating Segments of the Group................................................................. 43
MPIC Consolidated Statement of Financial Position ......................................... 54
Liquidity and Capital Resources ......................................................................... 58
Comparison of Other Financial Years ................................................................ 60
2015 versus 2014 .................................................................................... 60
2014 versus 2013 .................................................................................... 74
Item 7. Consolidated Financial Statements ..................................................................... 86
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures ...................................................................................................................... 86
PART III CONTROL AND COMPENSATION INFORMATION .................................... 87
Item 9. Directors and Executive Officers of the Issuer ................................................... 87
Item 10. Executive Compensation ............................................................................... 105
Item 11. Security Ownership of Certain Record and Beneficial Owners and
Management .................................................................................................................. 108
Item 12. Certain Relationships and Related Party Transactions ................................... 111
PART IV CORPORATE GOVERNANCE ........................................................................ 111
Item 13. Part IV - Corporate Governance portion of the Annual Report ..................... 111
PART V EXHIBITS AND SCHEDULES ......................................................................... 114
Item 14. Exhibits and Reports on SEC Form 17-C (Current Reports) ......................... 114
Item 15. Signatures ....................................................................................................... 115
Item 16. Index to Financial Statements and Supplementary Schedules ....................... 116
i. Exhibit I - 2016 Audited Financial Statements .............................................. 116
ii. Exhibit II - Supplementary Schedules .......................................................... 116
PART I BUSINESS AND GENERAL INFORMATION
Item 1. Description of Business
(A) Business Development
Metro Pacific Investments Corporation (the Parent Company or MPIC) was incorporated in the
Philippines and registered with the Philippine Securities and Exchange Commission (SEC) on
March 20, 2006 as an investment holding company. MPICs common shares of stock are listed in
and traded through the Philippine Stock Exchange (PSE). On August 6, 2012, MPIC launched
Sponsored Level 1 American Depositary Receipt (ADR) Program with Deutsche Bank as the
appointed depositary bank in line with the Parent Companys thrust to widen the availability of its
shares to investors in the United States.
The principal activities of the Parent Companys subsidiaries and equity method investees are
described in Notes 1, 11 and 42 of the attached 2016 Audited Consolidated Financial Statements.
The Parent Company and its subsidiaries are collectively referred to as the Company.
Metro Pacific Holdings, Inc. (MPHI) owns 41.9% of the total issued common shares (or 42.0% of
the total outstanding common shares) and 52.1% of the total issued and outstanding common
shares of MPIC as at December 31, 2016 and 2015, respectively. The reduction in the ownership
interest resulted from GT Capital Holdings, Inc.s (GTCHI) acquisition of 1.3 billion common
shares from MPHI on May 27, 2016. On the same date, MPIC entered into a Share Subscription
Agreement with GTCHI for the subscription by GTCHI of 3.6 billion common shares
(Subscription Shares) in MPIC. The Subscription Shares was issued out of the increase in the
authorized capital stock of MPIC (see Note 22 of the attached 2016 Audited Consolidated
Financial Statements).
MPHI is a Philippine corporation whose stockholders are Enterprise Investment Holdings, Inc.
(EIH), Intalink B.V. and First Pacific International Limited (FPIL). First Pacific Company
Limited (FPC), a company incorporated in Bermuda and listed in Hong Kong, through its
subsidiaries Intalink B.V, and FPIL, holds 40.0% equity interest in EIH and investment financing
which under Hong Kong Generally Accepted Accounting Principles, require FPC to account for
the results and assets and liabilities of EIH and its subsidiaries as part of FPC group of companies
in Hong Kong.
MPIC is a leading infrastructure holding company in the Philippines. MPICs intention is to

maintain and continue to develop a diverse set of infrastructure assets through its investments in
water, toll roads, power generation and distribution, healthcare services, light rail and logistics.
MPIC is therefore committed to investing through acquisitions and strategic partnerships in prime
infrastructure assets with the potential to provide synergies with its existing operations.
The list of MPICs subsidiaries is disclosed in Note 42 of the attached 2016 Audited Consolidated
Financial Statements.
1
(B) Business of the Issuer
For management purposes, the Company is organized into the following segments based on
services and products:
Water, which relates to the provision of water and sewerage services by Maynilad Water
Holding Company, Inc. (MWHCI) and its subsidiaries Maynilad Water Services, Inc.
(Maynilad) and Philippine Hydro, Inc. (PHI), and other water related services by MetroPac
Water Investments Corporation (MPWIC).
Toll operations, which primarily relate to operations and maintenance of toll facilities by
Metro Pacific Tollways Corporation (MPTC) and its subsidiaries NLEX Corporation (NLEX
Corp; formerly Manila North Tollways Corporation) and Cavitex Infrastructure Corporation
(CIC), and associates, Tollways Management Corporation (TMC), CII Bridges and Roads
Investment Joint Stock Company (CII B&R) and Don Muang Tollway Public Ltd (DMT).
Certain toll projects are either under pre-construction or on-going construction as at
March 1, 2017.
Power, which primarily relates to the operations of Manila Electric Company (MERALCO)
in relation to the distribution, supply and generation of electricity and Global Business Power
Corporation (GBPC) in relation to the power generation. The investment in MERALCO is
held both directly and through Beacon Electric Asset Holdings, Inc. (Beacon Electric) while
the investment in GBPC through Beacon Electrics wholly-owned entity, Beacon PowerGen
Holdings Inc. (BPHI).
Healthcare, which primarily relates to operations and management of hospitals, nursing and
medical schools and such other enterprises that have similar undertakings by Metro Pacific
Hospital Holdings, Inc. (MPHHI).
Rail, which primarily relates to Metro Pacific Light Rail Corporation (MPLRC) and its
subsidiary, Light Rail Manila Corporation (LRMC), the operations and maintenance of the
Light Rail Transit Line 1 (LRT-1) and construction of the LRT-1 south extension.
Logistics, which primarily relates to the Companys logistics business through MetroPac
Logistics Company, Inc. (MPLC) and its subsidiary, MetroPac Movers, Inc. (MMI).
Others, which represent holding companies and operations of subsidiaries involved in real
estate and provision of services.
The following table shows the breakdown of the Groups revenues, core income and reported net
income by major segment:
Year Ended December 31, 2016 (in Php Millions)
HO and
Water Toll Healthcare Power Rail Total Others Consolidated
Total revenue from external sales 20,466 11,902 8,967 - 3,016 44,351 469 44,820
MPIC's share in the Core Income 3,564 3,517 589 7,229 273 15,172 (3,066) 12,106
Operating companies contribution (%) 23% 23% 4% 48% 2% 100% - -
Non-recurring income (charges) 198 (174) (13) (209) 2 (196) (454) (650)
Segment Income (Loss) 3,762 3,343 576 7,020 275 14,976 (3,520) 11,456
2
Year Ended December 31, 2015 (in Php Millions)
Toll Healthcare Power HO Expense
Water Operations Distribution Rail Total and Interest Consolidated
Total revenue from external sales 19,098 9,691 7,553 - 897 37,239 - 37,239
MPIC's share in the Core Income 4,819 2,828 473 4,543 41 12,704 (2,358) 10,346
Operating companies contribution (%) 38% 22% 4% 36% 0% 100% - -
Non-recurring income (charges) (93) (295) (22) (164) (20) (594) (206) (800)
Segment Income (Loss) 4,726 2,533 451 4,379 21 12,110 (2,564) 9,546
Except for the equity in net earnings recognized on investments outside of the Philippines, the
revenues of the Group were primarily derived from sales within the Philippines.
As at December 31, 2016, MPICs investments outside the Philippines included an effective
ownership of 29.4% in DMT, a Thai toll road operator and 45.0% in CII B&R, a toll road
company located in Ho Chi Minh City in Vietnam.
Except as stated in the succeeding paragraphs and in the discussion for each of MPICs significant
subsidiaries, there has been no other business development such as bankruptcy, receivership or
similar proceeding not in the ordinary course of business that affected MPIC for the past three
years.
(B.1) Water
Business Development
MPIC operates its water business through MWHCI and MPWIC. MWHCIs main activity is the
holding of controlling shares in Maynilad which holds the exclusive concession granted by the
Metropolitan Waterworks and Sewerage System (MWSS), on behalf of the Philippine
Government, to provide water and sewerage services in the West Service Area of Metro Manila.
MPICs effective ownership in Maynilad was at 52.8% as at December 31, 2016, 2015 and 2014.
Maynilads subsidiaries are PHI and Amayi Water Solutions, Inc. (Amayi). PHI, which was
acquired by Maynilad on August 3, 2012 through a Share Purchase Agreement (SPA) with a third
party, is engaged in waterworks construction, engineering and engineering consulting services.
PHI has 25-year Bulk Water Supply Agreements with various provincial municipalities outside
the West Service Area and a Memorandum of Agreement with certain provincial municipality for
the construction and operation of water treatment facilities for water distribution services. Amayi,
incorporated on July 18, 2012, was established for the purpose of operating, managing,
maintaining and rehabilitating waterworks, sewerage and sanitation system and services outside
Maynilads Concession Area.
MPICs wholly-owned subsidiary, MPWIC is pursuing water infrastructure projects and other
water-related investments across the Philippines. As at December 31, 2016, MPWIC had interests
in the following companies:
Effective interest of 80% in Metro Iloilo Bulk Water Supply Corporation (MIBWSC)
through its wholly-owned subsidiary, MetroPac Iloilo Holdings Corp. (MILO).
MIBWSC holds a 170 million liters per day (MLD) Bulk Water Supply Project (BWS
Project). The BWS Project covers (i) the rehabilitation and upgrading of Metro Iloilo
Water Districts (MIWD) existing 55 MLD water facilities, (ii) the expansion and
construction of new water facilities to increase production to up to 115 MLD; and (iii)
delivery of contracted water demand to MIWD in accordance with the bulk water supply
agreement. On July 5, 2016, MIBWSC officially took over operations from the MIWD.
3
Effective interest of 27% in Laguna Water District Aquatech Resources Corp. (LWDAR)
through its direct ownership of 30% in EquiPacific HoldCo Inc. (EquiPacific). In
September 2015, the Consortium of Equi-Parco Construction Co. (EPCC), TwinPeak
Hydro Resources Corporation (THRC), and MPWIC was awarded the Joint Venture
Project (JV Project) for the financing, rehabilitation, improvement, expansion, operation
and maintenance of the Water Supply System of the Joint Venture Area covering the
municipalities of Los Banos, Bay, Calauan and Victoria of the Province of Laguna. The
Consortium organized EquiPacific as a special purpose company to implement the JV
Project. Laguna Water District Aquatech Resources Corporation (LARC) commenced
the operation and management of the distribution network of the Laguna Water District
(LWD) on January 1, 2016.
Effective interest of 20% in Cebu Manila Water Development, Inc. (CMWD) through its
direct ownership of 39% in Manila Water Consortium Inc. (MWCI). CMWD holds a 20-
year Water Purchase Agreement (WPA) for the supply of 18 MLD for the first year and
35 MLD of water for the 2nd to 20th year to Metropolitan Cebu Water District (MCWD).
Effective interest of 49% in Cavite Business Resources Inc. (CBRI) through its direct
ownership of 49% in Watergy Business Solutions, Inc. (WBSI). On December 16, 2015,
MPWIC completed the acquisition of 49% of the capital stock of WBSI. WBSI is a party
to the Contractual Joint Venture Agreement which purpose was to develop a bulk water
supply project to be sourced from the Maragondon River. The agreement shall be for a
period of 25 years from the commencement date. Commencement date has not taken
place as at December 31, 2016.
Direct ownership stake of 65% Eco-System Technologies International, Inc. (ESTII). On

June 16, 2016, MPWIC completed the acquisition of 65% of the outstanding capital stock
of ESTII. ESTII is engaged in the business of designing, supplying, constructing,
installing, and operating and maintaining wastewater and sewage treatment plant
facilities. The transaction allows MPIC, through MPWIC, to diversify its water sector
investment holdings and invest in the high growth wastewater Engineering, Procurement
and Construction (EPC) and Operation & Maintenance (O&M) markets.
Patents, Trademarks, Licenses, Franchises, Concessions or Labor Contract

In February 1997, Maynilad entered into a concession agreement with MWSS, with respect to the
MWSS West Service Area. Under the concession agreement, MWSS grants Maynilad, the sole
right to manage, operate, repair, decommission and refurbish all fixed and movable assets
required to provide water and sewerage services in the West Service Area for 25 years ending in
2022. In September 2009, MWSS approved an extension of its concession agreement with
Maynilad for another 15 years to 2037.
Maynilads subsidiary, PHI, is granted the sole right to distribute water in a certain part of
Bulacan under concession agreements granted by the Philippine government for 25 years to 2035.
MIBWSC holds the 170 MLD Bulk Water Supply Project covering a certain part of Iloilo. The
BWS Project covers a period from the later of the Target Initial Delivery Date and the Initial
Delivery Date and ending on the 25th anniversary thereof and shall be extended for an additional
25 years counted from completion of the agreed upon expansion obligation, but in no event shall
exceed an aggregate of 50 years. As at March 1, 2017, the parties have yet to agree on the Target
Initial Delivery Date.
4
MPWICs subsidiary, ESTII owns certain patents and utility models relating to the
water/wastewater treatment the use of which are governed by an exclusive and perpetual license.
Dependence on Licenses and Government Approval

Necessary government approvals in relation to the operation of the water business have been
secured and documented in the related concession agreements.
Under Maynilads concession agreement with the Philippine Government (see Note 1 of the 2016
Audited Consolidated Financial Statements), Maynilad may request tariff rate adjustments based
on movements in the Philippine consumer price index, foreign exchange currency differentials, a
rate rebasing process scheduled to be conducted every five years (Rate Rebasing) and certain
extraordinary events. Any rate adjustment requires approval by MWSS and the Regulatory Office
(RO). Any tariff adjustments that are not granted, in a timely manner, in full or at all, could have
a material adverse effect on the Maynilads results of operations and financial condition as well as
MPIC. However, the Republic of the Philippines has provided Maynilad with a make whole
guarantee in respect of any interference by any Government agency in the setting of the tariff.
Effect of Existing or Probable Governmental Regulations on the Business

The matter of the Maynilad tariff implementation remains unresolved as does the related claim on
the Republic of the Philippines:
In 2014, Maynilad received a favorable award in the arbitration of its 2013-2017 water tariff
which centered on Corporate Income Taxes being a recoverable expense. The MWSS has still
not implemented the awarded tariff increase while indicating they will await clarification
from the Supreme Court of the Philippines before proceeding.
Acting in formal accordance with the provisions of its concession, Maynilad has notified the
Republic of the Philippines (Republic) that it is calling on the Republics written
undertaking to compensate Maynilad for losses arising from delayed implementation of the
new tariff. On March 27, 2015, Maynilad served a Notice of Arbitration against the Republic.
Hearings on the arbitration was completed in December 2016 and resolution expected in
2017.
See Note 32 Contingencies Rate Rebasing Adjustment of the attached 2016 Audited
Consolidated Financial Statements.
Customers
The water business of the Company, through Maynilad enjoys a sole concession of Metro
Manilas West Service Area. This segment is mass-based such that the loss of a few customers
would not have a material adverse effect on MPIC and its subsidiaries taken as a whole. There is
also no single customer that accounts for twenty percent (20%) or more of the segments sales.
Distribution
Water is distributed through Maynilads network of pipelines, pumping stations and mini-
boosters. As at December 31, 2016, Maynilad's network consisted of around 7,637 kms of total
pipeline.
Competition
Maynilad has no direct competition given that it has sole right to provide water and sewerage
services to the West Service Area under its concession agreement with the Philippine
Government.
5
Under Maynilads Concession Agreement, MWSS grants Maynilad (as contractor to perform
certain functions and as agent for the exercise of certain rights and powers under the Charter), the
sole right to manage, operate, repair, decommission and refurbish all fixed and movable assets
required (except certain retained assets of MWSS) to provide water and sewerage services in the
West Service Area up to 2037.
Source and availability of raw materials

Under Maynilads Concession Agreement, MWSS supplies raw water to Maynilads distribution
system and is required to supply a minimum quantity of raw water. Maynilad currently receives
substantially all of its water from MWSS.
Maynilad has some supply side risk in that: (i) it secures most of its supply from a single source
the Angat dam; and (ii) this water source is shared by another water concessionaire, a
hydroelectric plant, and the needs of farmers for irrigation. A water usage protocol is in place to
ensure all users receive water as expected within the constraints of available supply. Following
significant water supply disruption in late 2009 arising indirectly from typhoons, the business
entered 2010 with less water supply available than allowed for in its concession. Maynilad has
worked to moderate its reliance on Angat by developing the Putatan Water Treatment Plant while
continuing to reduce leakage and theft rates.
Transactions with related parties

Maynilad, entered into certain construction contracts with D.M. Consunji, Inc., a subsidiary
company of DMCI Holdings, Inc. (DMCI, a non-controlling shareholder in MWHCI), in relation
to the provision of engineering, procurement and construction services to Maynilad. Refer to
Note 21 Related Party Transactions of the 2016 Audited Consolidated Financial Statements for
further details.
Costs and effects of compliance with environmental laws

Maynilads wastewater facilities are required to be maintained in compliance with environmental
standards set primarily by the Department of Environment and Natural Resources (DENR)
regarding effluent quality. All projects are assessed for their environmental impacts, and, where
applicable, must obtain an Environmental Compliance Certificate from the DENR prior to
construction or expansion. Subsequent to construction, effluents from facilities, such as sewage
and septage treatment plants, are routinely sampled and tested against DENR standards using
international quality sampling and testing procedures.
Maynilad has made efforts to meet and exceed all statutory and regulatory standards. Maynilads
regular maintenance procedures involve regular disinfection of service reservoirs and mains and
replacement of corroded pipes. Maynilad believes all wastewater treatment processes and
effluents meet the current standards of the DENR.
Maynilads Dagat-Dagatan Sewage and Septage Treatment Plant in Caloocan is the first facility
of its kind in the Asia-Pacific Region to attain triple international standard accreditations on
Quality Management (ISO 9001:2008) and Environmental Management (ISO 14001:2004) in
January 2007, and Occupational Safety and Health Management (OHSAS 18001:2007).
(B.2) Toll Operations
The Company holds its toll road assets through MPTC.
6
As at December 31, 2016, MPTCs subsidiaries holds the following concession rights:
Through its 75.60% effective interest in NLEX Corp:

o Construction, operation and maintenance of the North Luzon Expressway
(NLEX)
o Management, operation and maintenance of the Subic-Clark-Tarlac Expressway
(SCTEX).
o Construction, operation and maintenance of the NLEX-SLEX Connector Road.
Through Cavitex Infrastructure Corporation (CIC), which holds the concession rights for
the operation and maintenance of the 14-km Manila-Cavite Toll Expressway
(CAVITEX).
Through its wholly owned subsidiary, MPCALA Holdings, Inc. (MPCALA), which was
granted the concession to design, finance, construct, operate and maintain the 47-km
Cavite Laguna Expressway (CALAX).
Through its wholly owned subsidiary, Cebu Cordova Link Expressway Corporation
(CCLEC), which holds the concession rights for the construction, the operation and
maintenance of the Cebu-Cordova Link Expressway (CCLEx).
MPTC also has the following offshore investments:
29.45% stake in DMT. DMT is a major toll road operator in Bangkok, Thailand. The
concession for DMT runs until 2034 for the operation of a 21.9-kilometer six-lane
elevated toll road from central Bangkok to Don Muang International Airport and further
to the National Monument, north of Bangkok, Thailand.
44.9% effective interest in CII B&R. CII B&R has various road and bridge projects in
and around Ho Chi Minh City and its current portfolio includes 106.7 kilometers of roads
operating at approximately 49,000 vehicles per day and roads under pre- or on-going
construction covering a total of 38.1 kilometers. MPTC acquired CII B&R in 2015
through an equity investment and financing transaction with Ho Chi Minh City
Infrastructure Investment Joint Stock Co. (CII) of Vietnam that effectively provided
MPTC a 44.9% minority equity interest in CII B&R.

The toll segments concession comprise of the rights, interests and privileges to finance, design,
construct, operate and maintain toll roads, toll facilities and other facilities generating toll-related
and non-toll related income (see Note 1 Concession Arrangements of the attached 2016 Audited
Consolidated Financial Statements).
NLEX Corp holds the concession for the largest toll road in the Philippines, the NLEX Project.
The NLEX currently spans approximately 89 kilometers and services an average of 220,000
vehicles per day. The NLEX is the main infrastructure backbone that connects Metro Manila to 15
million people in Central and Northern Luzon. NLEX Corp has been in commercial operations
since February 2005 and has since established the NLEX brand as the standard for toll road
operations and management excellence in the Philippines.
On February 9, 2015, NLEX Corp received the Notice of Award from the BCDA for the
management, operation and maintenance of the 94-kilometer SCTEX. On February 26, 2015,
NLEX Corp and BCDA entered into a Business Agreement involving the assignment of BCDAs
rights and obligations relating to the management, operation and maintenance of SCTEX as
provided in the SCTEX concession (Toll Operation Agreement or TOA). The assignment
includes the exclusive right to use the SCTEX toll road facilities and the right to collect toll until
7
October 30, 2043. The management, operation and maintenance of the SCTEX was officially
turned over to NLEX Corp on October 27, 2015.
NLEX Corp also holds the concession right for the Connector Project. The Connector Road is a
four (4) lane toll expressway structure with a length of eight (8) kilometers all passing through
and above the right of way of the Philippine National Railways (PNR) starting NLEX Segment 10
in C3 Road Caloocan City and seamlessly connecting to SLEX through Metro Manila Skyway
Stage 3 Project. The concession period shall commence on the commencement date and shall end
on its thirty-seventh (37th) anniversary, unless otherwise extended or terminated in accordance
with the Concession Agreement. The Connector Project is expected to commence construction in
2018 and to complete by 2021.
CIC holds the concession for the operation and maintenance of the CAVITEX. The CAVITEX is
a 14-km long toll road built in two segments running from Paraaque to Cavite. The concession
period extends to 2033 for the originally built road and to 2046 for a subsequent extension.
MPCALA was granted the concession to design, finance, construct, operate and maintain the
CALAX. On July 10, 2015, MPCALA signed the Concession Agreement for the CALAX Project
with the DPWH. Under the Concession Agreement, MPCALA is granted the concession to
design, finance, construct, operate and maintain the CALAX, including the right to collect toll
fees, over a 35-year concession period. The CALAX is a closed-system tolled expressway
connecting the Manila-Cavite Expressway and the SLEX. Construction is expected to commence
in 2017 with expected completion by 2020.
CCLEC is granted the concession to design, finance, construct, operate and maintain the CCLEX,
including the right to collect toll fees over a 35-year concession period. CCLEX, consists of the
main alignment starting from the Cebu South Coastal Road and ending at the Mactan
Circumferential Road, inclusive of interchange ramps aligning the Guadalupe River, the main
span bridge, approaches, viaducts, causeways, low-height bridges, at-grade road, toll plazas and
toll operations center. CCLECs groundbreaking ceremony for the CCLEX was held on March
2, 2017. Construction of the project to start in 2017 and is estimated to be completed by 2020.

Necessary government approvals in relation to the operation of the toll roads have been secured
and documented in the related concession agreements. The concession agreements establish a toll
rate formula and adjustment procedure for setting the appropriate toll rate.

There are no anticipated changes to government regulations that will significantly affect the toll
business of the Group.
However, the main variable affecting the extent or likelihood of earnings growth at MPTC is the
ability of the subsidiaries to secure the tariff adjustments they are owed under the regulatory
frameworks that govern their concessions. NLEX Corp and CIC derive substantially all of their
revenues from toll collections from the users of the toll roads. As of March 1, 2017, MPTC
continues to await approval by the government of toll rate adjustments for the NLEX, SCTEX and
CAVITEX.
See Note 32 Toll Rate Adjustments - NLEX Corp and CIC of the attached 2016 Audited
8
Customers
The toll road business of the Company enjoys sole concession as provided for in the concession
agreements. Moreover, this segment is mass-based such that the loss of a few customers would
not have a material adverse effect on MPIC and its subsidiaries taken as a whole. There is also no
single customer that accounts for twenty percent (20%) or more of the segments sales.
Sales contributed by foreign sales

Foreign contribution from investment in CII B&R and DMT contributed approximately 2.6% of
MPICs consolidated income before tax (see Note 11 Investments and Advances of the attached
2016 Audited Consolidated Financial Statements).
Distribution
Tollroads revenues are from manual toll fee payment, electronic toll collection and badges/cards
for buses, trucks and jeepneys.
Competition
While NLEX Corp and CIC were granted sole right to operate and maintain toll roads under their
respective concession agreements with the Philippine Government (see Note 1 Concession
Arrangements to the 2016 Audited Consolidated Financial Statements for further information on
the concession agreements), alternative routes and roads are the toll roads competitors:
NLEX. A viable alternative road to North Luzon is the MacArthur Highway, a road extending
from Manila to Pangasinan that passes through small towns. The NLEX has historically
served as the main artery between Metro Manila and Central and Northern Luzon and as such,
it has a long and stable track record of traffic volume. Further, the NLEX has a stable service
area, which is characterized by the lack of comparable competing traffic routes and the
resilience of the user profile.
CAVITEX. The free alternative routes to the R1 Expressway and R1 Extension are Quirino
Avenue, Aguinaldo Highway, Tirona Highway and Evangelista Road. While these roads are
complementary to the R1 Expressway and R1 Extension, they do not offer the same direct
and contiguous route from northern Cavite to Metro Manila and vice-versa. The alternative
roads have limited capacity and narrow lanes and are controlled by traffic lights and stop
signs which are heavily congested at peak times.
Traffic volumes on the tollroads are likewise affected by competition from alternative modes of
transportation and there can be no assurance that existing modes of transport will not significantly
improve their services.
The Company continues to promote traffic growth on these tollroads by providing more entry and
exit points along the expressway. Likewise, the Company continues to boost the value
proposition of the NLEX and CAVITEX by implementing measures to enhance customer
satisfaction, safety, and convenience. While there is insignificant threat posed by competing toll
roads in the area covered by NLEX Corp and CICs concessions there is competition elsewhere
from Ayala Corporation, which was awarded the contract to build the Daang Hari-SLEX Link,
and San Miguel Corporation, which invested in the controlling shareholders of Metro Manila
Skyway, South Luzon Expressway, Tarlac-Pangasinan-La Union Expressway and NAIA
Expressway.

NLEX Corps main supply contract consists of the O&M Agreement with TMC (see Note 21
Related Party Transactions to the 2016 Audited Consolidated Financial Statements). A similar
agreement is in effect between CIC and PEA Tollway Corporation (PEATC) for the operations
9
and maintenance of CAVITEX (see Note 33 Significant Contracts, Agreements and
Commitments to the 2016 Audited Consolidated Financial Statements).
On October 1, 2016, CIC and M+ Corporation (M+; a wholly-owned subsidiary of MPTC)

entered into a Toll Collection Services Agreement to facilitate the toll collection function of CIC.
TMC, and PEATC and M+ provides NLEX Corp and CIC, respectively, with the following
operations and maintenance services:
Collection of tolls from motorists at toll plazas, both in cash and electronic form;
Routine maintenance and repairs of the road and equipment; and
Management of NLEX and CAVITEX in order to, among other things, improve traffic flows,
maintain road safety, and enhance the facilities and services along NLEX and CAVITEX.

The O&M of the NLEX and Segment 7 is undertaken by TMC pursuant to the O&M Agreement
between NLEX Corp and TMC. This agreement shall be effective for the entire concession
period. TMC, of which MPTC owns 60%, oversees the day-to-day operations of the NLEX,
including securing toll collection, depositing of funds to NLEX Corps accounts, facilitating
smooth and uninterrupted flow of traffic, carrying out of routine maintenance, ensuring effective
and safe responses to emergency situations. In exchange for performing its duties, TMC receives
an O&M fee based on a base fee plus a variable fee.
On December 5, 2007, NLEX Corp engaged the services of Easytrip Services Corporation (ESC)
to assist NLEX Corp in increasing the usage of the electronic toll collection facility along the
NLEX. ESC became a related party of NLEX Corp beginning July 2014 when MPTDC acquired
equity interest equivalent to 50% plus one share of the capital stock of ESC. Under the agreement
with ESC, NLEX Corp will pay ESC an annual fixed fee, which are to be maintained and
escalated every year for labor index and consumer price index plus variable fee per transaction
See details and other related party transactions disclosed under Note 21 Related Party
Transactions to the 2016 Audited Consolidated Financial Statements).

Prior to the commencement of construction activities, the grantee must obtain an environmental
compliance certificate (ECC) from the DENR. An ECC typically requires the grantee to submit its
proposed policies for, among others, (1) relocation and compensation of individuals and families
who are affected by the toll road project, (2) mitigation of the effects of the toll road project on
the natural environment, (3) environmental monitoring, and (4) public information and education
regarding the toll road project. In addition, the ECC typically requires the grantee to submit a
quarterly report of its environmental monitoring activities.
NLEX Corp and CIC have dedicated teams that regularly monitor compliance with its ECCs and
ensure measurement of significant environmental metrics for purposes of compliance with the
reporting requirements under its loan agreements. Quarterly air quality sampling is conducted to
measure the level of pollutants and harmful particulates along the toll roads. A solid and
hazardous waste management system is also in place to ensure proper waste disposal and
compliance with the Ecological Solid Waste Management Act of 2001 and Toxic Substances and
Hazardous Wastes Control Act of 1990. All required areas for reclamation and re-vegetation are
regularly monitored and maintained to prevent soil erosion and scouring along river banks and
slope areas.
10
Status of any publicly announced product or services
As discussed in the 2016 Audited Consolidated Financial Statements, certain toll projects are
either under pre-construction or on-going construction as at March 1, 2017 (see Note 1
Concession Arrangements). Status of the other projects as follows:
Segment 10 with a project cost of 10.5 billion will run from Valenzuela City all the way to
C3 in Caloocan City and is expected to complete by the first quarter of 2018.
Construction of NLEX Corps 2.6 billion Segment 2 and 3 NLEX Road-Widening Project to
accommodate growing traffic numbers is substantially complete. The project will expand the
existing two-lane portion of NLEX between Sta. Rita and San Fernando to three lanes on both
the northbound and southbound sides, while the current one-lane stretch between Dau and
Sta. Ines will be expanded to two lanes in each direction.
Construction for the first phase of the C5 Link Expressway is set to start by the first quarter of
2017 and be completed by 2020. The C-5 Link Expressway, part of the existing CAVITEX
network, is a 12.7 billion project spanning 7.7 kilometers to link C-5 Road in Taguig to R-1
(Coastal) Expressway.
(B.3a) Power - MERALCO
Investment in MERALCO is held directly by MPIC at 15.0% as at December 31, 2016 and 2015,
and held indirectly through Beacon Electric at an effective interest of 26.2% and 17.5% as at
December 31, 2016 and 2015, respectively.
MERALCO is the Philippines largest electric power distribution company, with franchise area
covering 9,685 square kilometers. It provides power to more than 6.0 million customers in 36
cities and 75 municipalities including the whole of Metro Manila, provinces of Rizal, Cavite, and
Bulacan, and parts of Pampanga, Batangas, Laguna and Quezon. Business establishments in the
franchise area account for about 50 percent of the countrys Gross Domestic Product.
Through Clark Electric Distribution Corporation (Clark Electric), a 65%-owned subsidiary,

MERALCO holds the power distribution franchise of Clark Special Economic Zone in Clark,
Pampanga. Clark Electrics franchise area covers 320 square kilometers and 1,987 customers as
at December 31, 2016.
MERALCO is organized into two major operating segments, namely, power (distribution,
generation and retail electricity supply) and other services.
MGen Corporation, a wholly owned subsidiary of MERALCO, was organized as MERALCOs

vehicle for re-entry into power generation.
On July 22, 2011, MGen signed a Shareholders Agreement with Therma Power, Inc. (TPI) of
Aboitiz Power Corporation and Taiwan Cogeneration International Corporation Philippine
Branch (TCIC), for the construction and operation of a 2x300 Megawatt (MW) Circulating
Fluidized-Bed (CFB) independent, coal-fired power plant to be located in the Subic Bay Freeport
Zone. RP Energy is a partnership among TPI, MGen and TCIC.
In January 2013, the Court of Appeals (CA) dismissed the Writ of Kalikasan case filed by certain
interest groups against RP Energy. However, the CA, while ruling on the dismissal of the case,
invalidated the ECC issued by the DENR and the Lease and Development Agreement (LDA) with
the Subic Bay Metropolitan Authority (SBMA) citing certain procedural and documentary lapses
11
in the issuance of the ECC and the execution of the LDA. On February 3, 2015, RP Energy
received the SCs decision denying the Writ of Kalikasan case previously filed by certain
opposing parties against its planned power plant due to insufficiency of evidence. The high court
upheld the validity of the ECC and its first two amendments, as well as the LDA of RP Energy
with SBMA. On February 23, 2016, the LDA and transmission line right-of-way lease agreement
with SBMA were signed.
On October 13, 2016, the Engineering, Procurement and Construction for the first 300 MW was
executed. Site preparation of the first 300 MW unit has been essentially completed with
commercial operations in early 2020. Meanwhile, work on the permanent transmission line
interconnection is proceeding in preparation for the development of the second 300 MW unit.
In April 2016, RP Energy separately signed a power supply agreements (PSA) with MERALCO
and Aboitiz Energy Solutions, Inc. RP Energy is awaiting the approval of its PSA with
MERALCO by the ERC.
In March 2013, MGen acquired an effective 28% interest in PacificLight Power Co. Ltd.
(PacificLight), which owns and currently operates a new advanced technology 2x400 MW
Liquefied Natural Gas (LNG) plant in Jurong Island, Singapore. The construction of the facilities
was completed in December 2013 and both units have been in commercial operations since
January 31, 2014. The management team continues to contract with possible offtakers and sell
the remaining capacity to the merchant market. PacificLight provides the opportunity for LNG
power generation technology and knowledge acquisition and transfer.
On October 7, 2013, MGen executed a Share Sale and Purchase Agreement with First Metro
Investment Corporation (FMIC) for the sale by FMIC of a 20% equity interest in Global Business
Power Corp. (GBPC) to MGen, and signed a related Shareholders Agreement on October 22,
2013. In June 2014, MGen acquired an additional 2% equity interest in GBPC, bringing its equity
interest to 22%. On June 30, 2016, MGen and JG Summit executed a deed of absolute assignment
of shares whereby MGen sold and assigned 153,921,676, representing 8% of its equity interest in
GBPC, to JG summit for P3,151 million, GBPC owns an aggregate of 859 MW gross coal and
diesel power plants in operation in the Visayas region. which include a 150 MW gross coal-fired
power plant in Panay Island which was commissioned in November 2016.
On December 22, 2016, RP Energy signed loan agreements with local banks for the P31.5 billion
funding for its project. The approval of the PSA between RP Energy and Aboitiz Energy by the
ERC is a condition precedent to the first loan drawdown.
On August 29, 2013, MGen signed a Joint Development Agreement with New Growth B.V., a
100% subsidiary of Electricity Generating Public Company Limited of Thailand (EGCO) for the
development of a new 455 MW (net) supercritical coal-fired power plant in Mauban, Quezon.
MGens equity in the joint venture company, San Buenaventura Power Limited (SBPL), is 51%,
with the option to assign or transfer 2% thereof to a separate entity. On November 11, 2014, the
DENR granted SBPL an ECC covering the 455 MW (net) coal-fired power plant.
SBPLs EPC was executed with the Consortium of Daelim Industrial Co. Ltd. and Mitsubishi
Corporation following a competitive selection process on October 8, 2014. The construction
period is set at 42 months from the commencement date of December 8, 2015.
On May 29, 2014, MERALCO signed a long term Power Supply Agreement (PSA) with SBPL.
The ERC-approved PSA was accepted by SBPL on May 30, 2015.
On October 8, 2015, SBPL entered into an Omnibus Agreement and related agreements with
certain financial institutions providing for a term loan facility in an amount of up to
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P42.15 billion for the financing of the project. SBPL made its initial borrowing on
=
December 1, 2015. Also on December 11, 2015, SBPL entered into an Operation and
Maintenance Agreement for the operations and maintenance of the power plant.
SBPL is expected to achieve commercial operations in 2019.

MERALCO holds a congressional franchise under Republic Act (RA) No. 9209 effective June 28,
2003. RA No. 9209 grants MERALCO a 25-year franchise valid through June 28, 2028 to
construct, operate, and maintain the electric distribution system in the cities and municipalities of
Bulacan, Cavite, Metro Manila, and Rizal and certain cities, municipalities, and barangays in the
provinces of Batangas, Laguna, Pampanga, and Quezon. On October 20, 2008, the ERC, granted
MERALCO a consolidated Certificate of Public Convenience and Necessity for the operation of
electric service within its franchise coverage, effective until the expiration of MERALCOs
congressional franchise. MERALCOs participation in Retail Electricity Supply (RES) is through
its local RES unit, Mpower. In 2017, the ERC granted MERALCOs wholly owned subsidiary,
Vantage Energy Solutions and Management, Inc. (VESM), Solvre, Inc., a wholly owned
subsidiary of MGen, and MeridianX Inc., a wholly owned subsidiary of Comstech Integration
Alliance, Inc., distinct RES licenses to operate as retail electricity suppliers in Luzon and Visayas.
Principal Products or Services

MERALCOs and Clark Electrics markets are categorized into four sectors and the consolidated
relative contributions to sales of each are as follows:
Contribution in terms of Sales Volume

2016 2015
Commercial 39.53% 39.47%
Industrial 29.14% 30.21%
Residential 31.00% 29.96%
Streetlights 0.33% 0.36%
Total 100.00% 100.00%

MERALCO was among the first entrants to the Performance-Based Regulation (PBR). Rate-
setting under PBR is governed by the Rules for Setting Distribution Wheeling Rates (RDWR).
The PBR scheme sets tariffs based on the regulated asset base of the Distribution Utility (DU),
and the required operating and capital expenditures to meet operational performance and service
level requirements responsive to the need for adequate, reliable and quality power, efficient
service, growth of all customer classes in the in the franchise area as approved by the ERC. PBR
also employs a mechanism that penalizes or rewards a DU depending on its network and service
performance. Rate filings and setting are done every regulatory period (RP) where one RP
consists of four regulatory years. A regulatory year (RY) begins on July 1 and ends on June 30 of
the following year.
The last year of MERALCOs 3rd RP ended on June 30, 2015. The 4th RP for Group A
entrants commenced on July 1, 2015 and shall end on June 30, 2019. To initiate the reset process,
the ERC posted in its website on April 12, 2016 the following draft issuance for comments, to
wit:
a) Draft Rules for Setting Distribution Wheeling Rates for Privately Owned Distribution
Utilities Operating under Performance Based Regulation, First Entry Group: Fourth
Regulatory Period;
13
b) Draft Position Paper: Regulatory Reset for the July 1, 2015 to June 30, 2019 Fourth
Regulatory Period for the First Entry Group of Privately Owned Distribution Utilities subject
to Performance Based Regulation; and
c) Draft Commission Resolution on the Issues on the Implementation of PBR for Privately
Owned DUs under the RDWR.
Under ERC Resolution No. 25, Series of 2016 dated July 12, 2016, the ERC promulgated a
Resolution modifying the RDWR for Privately-Owned Distribution Utilities Entering PBR.
On December 2, 2016, the ERC released a Notice of Proposed Rule-Making setting the petition
filed by a consumer group for initial hearing on January 9, 2017. All interested parties were given
until December 26, 2016 to file their comments on said Petition.
In the Petition, the consumer group seeks a repeal of the PBR rate-setting methodology for setting
distribution wheeling rates. In a subsequent Order and Notice of Public Hearing, the ERC reset
the hearing to January 23, 2017 and gave interested parties until January 9, 2017 to file their
respective comments to the Petition. MERALCO filed its Comment to the Petition on January 9,
2017. The consumer group moved for a resetting of the January 23, 2017 hearing. The next
hearing is set on March 17, 2017.
In a Notice dated November 16, 2016, the ERC approved the draft Regulatory Asset Base Roll
Forward Handbook for Privately Owned Electricity Distribution Utilities (RAB Handbook) for
posting in its website. All interested parties were given until December 19, 2016 to submit their
respective comments to the draft RAB Handbook. Thereafter, during the public consultation on
January 9, 2017, the parties were given until February 9, 2017 to file their comments to the draft
RAB Handbook. In an Omnibus Motion filed on February 9, 2017, MERALCO submitted its
initial comments to the draft RAB Handbook but moved for the deferment of the proceedings
until the consumer group Petition has been resolved.
On June 11, 2015, MERALCO filed its application for the approval of its proposed Interim
Average Rate of P =1.3939 per kilowatt-hour (kWh) and translation thereof into rate tariffs by
customer category. On July 10, 2015, the ERC provisionally approved the Interim Average Rate
of P
=1.3810 per kWh and the rate translation per customer class, which was reflected in the
customer bills starting July 2015.
Absent the release by the ERC of the final rules to govern the filing of its 4th RP Reset,
MERALCO filed on February 9, 2015 an application for approval of authority to implement its
CAPEX program for RY 2016 (July 1, 2015 to June 30, 2016) pursuant to Section 20(b) of
Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act. On June
15, 2016, MERALCO received a copy of the ERC Decision dated April 12, 2016 which partially
approved MERALCOs CAPEX program for RY 2016 amounting to P =15.5 billion, subject to
certain conditions. An intervenor has filed a Motion for Reconsideration of the Decision which is
pending before the ERC. On July 25, 2016, MERALCO has filed its opposition to the Motion for
Reconsideration. As of February 27, 2017, the ERC has yet to rule on the Motion for
Reconsideration.
On March 8, 2016, MERALCO filed an application for approval of authority to implement its
CAPEX program for RY 2017 (July 1, 2016 to June 30, 2017) pursuant to the Public Service Act.
Hearings have been completed and MERALCO is awaiting the final decision of the ERC. On July
26, 2016, MERALCO received the Order dated May 5, 2016, granting MERALCO provisional
authority to implement the nine (9) major projects and 37 residual projects constituting a
substantial part of the CAPEX program, subject to certain conditions. The provisional approval for
the balance of the program was deferred pending submission of additional information.
14
MERALCO also files with the ERC its applications for recoveries of advances for pass-through
costs. These advances consist mainly of unrecovered or differential generation and transmission
charges technically referred to as under-recoveries, which are recoverable from the customers, as
allowed by law.
Customers
MERALCOs customers are mass-based such that the loss of a few customers would not have a
material adverse effect on MPIC and its subsidiaries taken as a whole. There is also no single
customer that accounts for twenty percent (20%) or more of the segments sales.
Competition
Distribution of electricity at its usable voltage to end-consumers is performed by investor-owned
electric utilities, notably MERALCO and Clark Electric, a few local government-owned utilities
and numerous electric cooperatives which sell to households as well as commercial and industrial
enterprises located within their franchise areas at retail rates regulated by the ERC. Given that
distributors are assigned franchise areas, as well as the significant investment involved in the
setting-up of a distribution network, MERALCO and Clark Electric have no significant
competition in their franchise areas.
At 42 months since the start of Retail Competition and Open Access (RCOA), a good number of
contestable customers have so far decided to wait for mandatory contestability and have therefore
remained as captive customers, which continue to be served by the Distribution Utility (DU). In
terms of demand, however, almost half of the estimated contestable customer demand has opted
to switch into the competitive market. This comprises mostly large customers with high load
factors, who were able to obtain competitively priced energy from competing retail electricity
suppliers. Of the 431 qualified and registered contestable customers, 237 or nearly 55% in terms
of number of accounts have opted to be served by MPower, the MERALCO RES unit. MPower,
with a group of highly competent engineers and commercial executives with broad experience in
the power industry, including load profiling and forecasting, energy operations and management,
and its customer-centric product and price offerings, among others, has created significant value
for its customers through its service offerings and reliable supply portfolio.
Distribution
MERALCO and Clark Electric have transmission and distribution facilities comprising of land,
various buildings and improvements, as well as property and equipment such as towers, poles,
underground conduit and conductors and overhead conductors and devices.

The principal sources of power of MERALCO and Clark Electric and their relative contribution in
2016 and 2015 are as follows:
2016 2015
First Gas Power Corporation (Sta. Rita) and FGP
Corp.(San Lorenzo) Natural Gas 26.26% 30.66%
South Premiere Power Corporation (Ilijan) Natural Gas 19.41% 18.84%
San Miguel Energy Corporation (Sual) Coal 8.22% 9.75%
AES Philippines (Masinloc) Coal 8.31% 8.46%
Quezon Power Philippines Limited Co. Coal 8.12% 8.27%
Sem-Calaca Power Corporation (Sem-Calaca) Coal 7.70% 8.53%
Therma Luzon, Inc. (Pagbilao) Coal 7.00% 7.11%
Philippine Electricity Market Corporation 11.26% 5.06%
Others Various 3.72% 2.74%
Total 100% 100.00%
15
(B.3b) Power - GBPC
Business Development/ Products and Services/Customers

GBPC is a holding company which, through its subsidiaries, is one of the leading independent
power producers in the Visayas region and Mindoro island, with a combined gross maximum
capacity of 854 MW.
GBPC owns eleven power generation facilities. The largest clean coal-fired power plants located
in Iloilo City are operated by Panay Energy Development Corporation (PEDC), in which GBPC
holds an 89.3% beneficial interest. PEDC operates the 164 MW clean coal-fired power plant to
serve the energy requirement of Panay and the rest of the Visayas region. To support the growing
needs of the region, PEDC expanded its operations by undertaking the 150 MW project. The new
150 MW coal-fired circulating fluidized bed (CFB) plant in Panay is currently undergoing final
acceptance. The CFB technology is considered the cleanest available coal plant technology for its
size.
The second largest power generation facility is the 246 MW clean coal-fired power plant in
Toledo City, Cebu, which is operated by Cebu Energy Development Corporation (CEDC).
CEDC is a joint venture between Global Formosa Power Holdings, Inc. (GFPHI) and Abovant
Holdings, Inc., in which, GFPHI has 56.0% beneficial interest. GBPC, having 93.2% ownership
stake in GFPHI, effectively has 52.2% interest in CEDC. This facility is the first commercial
clean coal power plant in the Philippines.
Both the PEDC and CEDC plants utilize circulating fluidized bed boiler technology that produces
very low levels of sulfur dioxide and nitrogen oxide and captures most solid emissions.
GBPCs other power generation facilities consist of a 60 MW coal facility, a 82 MW coal facility
and a 40 MW fuel oil facility operated by Toledo Power Company (TPC); a 72 MW fuel oil
facility, a 20 MW fuel oil facility, a 7.5 MW fuel oil facility and a 5 MW fuel oil facility operated
by Panay Power Corporation (PPC); and a 7.5 MW fuel oil facility operated by GBH Power
Resources Inc. (GPRI).
Distribution Methods of Products and Services

GBPC, through its power generation companies, sells electricity through its bilateral power
supply agreements or the Wholesale Electricity Spot Market (WESM).
GBPC enters into bilateral off-take arrangements through Electric Power Purchase Agreements
(EPPA) between its generation subsidiaries and the power-off-takers such as distribution
utilities, electric cooperatives and other industrial off-takers. An EPPA provides for a specific
amount of capacity to be allocated to each customer, with provisions that allow for the periodic
revision of the amounts in the agreement.
GBPC, through its Global Energy Supply Corporation (GESC) a retail electricity supplier
accredited by the ERC, provides power to big-load customers also known as Contestable
Customers. This was made possible through the execution of Retail Supply Contracts.
New Products and Services

Reaffirming its commitment to the Visayas region, GBPC pursued expansion projects to support
accelerated growth in Cebu and Iloilo. Through subsidiary TPC, GBPC inaugurated its 82 MW
clean coal-fired expansion project in Toledo in September 2014. This P
=10.2 billion project
supplies the energy requirements of Cebu III Electric Cooperative and its industrial customer,
Carmen Copper Corporation.
16
Another subsidiary, PEDC, inaugurated its 150 MW expansion project in Iloilo City last
November 2016, in time for the completion of the ongoing property development projects of
Megaworld, Ayala Land, Gaisano, and Double Dragon Properties in Iloilo. It is currently
awaiting Final Acceptance.
Competition
GBPCs power generation facilities are subject to competition from existing and future power
generation plants that supply electricity to the Visayas grid. GBPC believes that its experience in
designing, building and operating power plant projects in Visayas and Mindoro is stronger than
any of its competitors in the region.
The key competitor in the region is the Unified Leyte Geothermal Power Plants, which were
operated by the Government through National Power Corporation (NPC). These power plants are
now privatized. The Leyte plants service both the Luzon and Visayas grids. Geothermal power
plants are significant competitors because they can produce power at a relatively lower cost than
fossil-fuel and coal-based producers.
GBPC will face competition in both the development of new power generation facilities and the
acquisition of existing power plants, as well as the financing for these activities. Factors such as
the performance of the Philippine economy and the possibility of a shortfall in the Philippines
energy supply have attracted many potential competitors, including multinational development
groups and equipment suppliers, to explore opportunities in the development of electric power
generation projects in the Philippines. Accordingly, competition for and from new non-renewable
and renewable power projects may increase in line with the expected long-term economic growth
of the Philippines. To complement its existing portfolio, GBPC has started exploring renewable
energy sources with the completion of the engineering design of the 40 MW Biomass in Negros.
GBPC is looking at additional renewable projects in the biomass, hydro, and solar sectors.
Sources and Availability of Raw Materials and the Names of Principal Suppliers
GBPC has local and imported long-term Coal Supply Agreements with selected suppliers. GBPC
gets majority of local coal supplies from Semirara Mining, while imported coal come from
international partners in Indonesia and Russia.
Coal Sources Principal Suppliers

Semirara Semirara Mining and Power Corporation
Indonesia PT Adaro Indonesia
Samtan Co., Ltd. / Kideco
Samsung C&T/Sakhalin
Lucent Aminto, Inc.
Coal prices under the agreements are indexed to Global Newcastle Coal prices and are adjusted if
the guaranteed coal qualities are not met but within the rejection limits. These coal qualities
include calorific value, moisture, sulphur, ash and volatile matter. Coal procurement is being
handled by GBPCs Fuel Management Group.
Other Indonesian coal suppliers that passed the trial burns conducted last 2015 are PT ABK
(Anugerah Bara Kaltim) and PT Insani. The said companies are now included in the pool of
reliable and technically complying coal suppliers of GBPC.
17
Major Customers
Ninety five percent (95.0%) of GBPCs total electricity sales in 2016 were earned from its
contracted power off-taker customers.
A summary of power off-taker customers having EPPAs with the generation subsidiaries as of
December 31, 2016 is as follows:
Cebu Energy Development Corporation (CEDC)

Visayan Electric Company, Inc. (VECO)
Philippine Economic Zone Authority Mactan Economic Zone I (PEZA-MEZ 1)
Mactan Electric Company (MECO)
Bohol I Electric Cooperative, Inc. (BOHECO 1)
CEBU I Electric Cooperative, Inc. (CEBECO 1)
CEBU II Electric Cooperative, Inc. (CEBECO 2)
Balamban Enerzone Corporation (BEZ)
Taiheiyo Cement Philippines Inc. (thru Global Energy Supply Corp.)
PEDC
Panay Electric Company, Inc. (PECO)
Aklan Electric Cooperative, Inc. (AKELCO)
Capiz Electric Cooperative, Inc. (CAPELCO)
Antique Electric Cooperative, Inc. (ANTECO)
Iloilo I Electric Cooperative, Inc. (ILECO 1)
Iloilo II Electric Cooperative, Inc. (ILECO 2)
Iloilo III Electric Cooperative, Inc. (ILECO 3)
Philippine Phosphate Fertilizer Corporation
Iloilo Provincial Capitol
Cathay Pacific Steel Corp. (thru Global Energy Supply Corp.)
Taiheiyo Cement Philippines Inc. (thru Global Energy Supply Corp.)
Mabuhay Filcement Inc. (thru Global Energy Supply Corp.)
TPC
Carmen Copper Corporation (Carmen Copper)
CEBU III Electric Cooperative, Inc. (CEBECO 3)
MERALCO (1)
PPC
Panay Electric Company (PECO)(2)
Iloilo I Electric Cooperative, Inc. (ILECO 1)(3)
Aklan Electric Cooperative (AKELCO )(3)
MERALCO (1)
GPRI
Oriental Mindoro Electric Cooperative, Inc. (ORMECO)
Notes:
(1)
Interim Power Supply Agreement (IPSA) which commenced in April 2016 up to February 2017.
(2)
EPPA is for peak power only
(3)
For intermediary and peak power requirements
18
Effect of Existing or Probable Government Regulations on the Business
The following regulations may have significant impact on GBPCs business operations:
Wholesale Electricity Spot Market (WESM)
The WESM provides a venue through which independent power producers may sell power, and at
the same time distributors and wholesale consumers can purchase electricity where no bilateral
contract exists between the two. In June 2002, the Department of Energy (DOE), in cooperation
with electric power industry participants, promulgated detailed rules for the WESM thereby
allowing the creation of the Philippine Electricity Market Corporation (which will operate the
market) and providing a framework for the establishment of the WESM. These rules set the
guidelines and standards for participation in the market, reflecting accepted economic principles
and providing a level playing field for all electric power industry participants, and procedures for
establishing the merit order dispatch for each time (hourly) trading period. The WESM began
market operations in 2006 for Luzon and 2010 for Visayas. GBPCs subsidiaries, PEDC, CEDC,
PPC and TPC, have been registered participants of the WESM since 2011.
Under the DOE Circular No. 2015-10-0015, series of 2015, the DOE adopted enhancements to
WESM design and operations which included a shorter trading and dispatch interval of five (5)
minutes. However, this is yet to be operationalized through the issuance of a Market Manual by
the Philippine Electricity Market Corporation (PEMC).
Retail Competition and Open Access
The Electric Power Industry Reform Act (EPIRA) likewise provides for a system of open access
on transmission and distribution wires, under which the National Grid Corporation of the
Philippines (NGCP) is the transmission operator, and the distribution utilities may not refuse the
use of their wires for the delivery of electricity by qualified persons, subject to the payment of
transmission or distribution wheeling charges. Conditions for the commencement of the Open
Access system are as follows:
establishment of the WESM;
approval of unbundled transmission and distribution wheeling charges;
initial implementation of the cross-subsidy removal scheme;
privatization of at least 70% of the total capacity of generating assets of NPC in Luzon and
Visayas;
transfer of the management and control of at least 70% of the total energy output of power
plants under contract with NPC to the IPP administrators.
In a decision dated June 6, 2011, the ERC declared that all conditions to retail competition and
open access had been complied with and stated that open access would start on December 26,
2011 in Luzon. However, certain issues still needed to be resolved, therefore, the Government
postponed the implementation of open access and declared December 26, 2012 as the new open
access date, with the first six months from the open access date as the transition period.
Commercial operations of the retail competition and open access commenced on June 26, 2013.
Later on, the ERC saw it fit to revise the rules on contestability to be able to address
implementation issues for the retail market and to adjust the threshold level for the Contestable
Market. It thus issued ERC Resolution No. 10, series of 2016 on May 12, 2016 which contained
the Revised Rules on Contestability. Under said rules, the Threshold Reduction Date was set to
June 26, 2016, where end-users with demand of at least 750kW shall be allowed to contract with
any retail electricity supplier (RES). On the other hand, for end-users with demand of at least
1MW, mandatory contestability was set to December 26, 2016. Lastly, the lowering of the
threshold to cover end-users with demand of at least 500kW was set to June 26, 2018. However,
19
the date for mandatory contestability for end-users with demand of at least 1MW was later moved
to February 26, 2017 through ERC Resolution No. 28, series of 2016, issued on November 15,
2016, due to various issues on implementation of mandatory contestability.
A wholly-owned subsidiary of GBPC, GESC, holds a RES license. Through this special purpose
vehicle, GBPC is able to participate in the retail competition open access initiative to directly
supply electricity to end users, including major industrial customers.
Reduction of Taxes
To equalize prices between imported and indigenous fuel, the EPIRA mandates the President of
the Philippines to reduce the royalties, returns and taxes collected for the exploitation of all
indigenous sources of energy, including but not limited to, natural gas and geothermal steam, so
as to effect parity of tax treatment with the existing rates for imported coal, crude oil, bunker fuel
and other imported fuels. Following the promulgation of the implementing rules and regulations,
President Arroyo enacted Executive Order No. 100 on May 3, 2002, to equalize the taxes among
fuels used for power generation.
Renewable Energy Act of 2008
The Renewable Energy Act of 2008 (RE Law) is a landmark legislation and is considered the
most comprehensive renewable energy law in Southeast Asia. The RE Law was signed by
President Gloria M. Arroyo on December 16, 2008 and took effect on January 30, 2009.
One of the main objectives of the RE Law is to accelerate the exploration and development of
renewable energy resources such as, but not limited to, biomass, solar, wind, hydro, geothermal
and ocean energy sources, including hybrid systems, to achieve synergy self-reliance, through the
adoption of sustainable energy development strategies to reduce the countrys dependence on
fossil fuels and thereby minimize the countrys exposure to price fluctuations in the international
markets, the effects of which spiral down to almost all sectors of the economy.
The RE Law also offers key fiscal and non-fiscal incentives to developers of renewable energy
facilities, including hybrid systems, subject to certification from DOE and in consultation with the
Board of Investments (BOI). All fiscal incentives apply to all RE capacities upon the RE Law
becoming effective. Key incentives are as follows:
income tax holiday for the first seven years of operation;

duty-free importations of RE machinery, equipment and materials, effective within ten years
upon issuance of certification, provided that the said machinery, equipment and materials are
directly, exclusively and actually used in the RE facilities;
special realty property tax rates on equipment and machinery not exceeding 1.5% of the net
book value;
net operating loss carry-over for a period of seven years;
corporate income tax rates of 10% after the income tax holiday;
accelerated depreciation for the purposes of computing taxable income;
zero percent value-added tax on the sale of fuel or power generated from emerging energy
sources and purchases of local supply of goods, properties and services of renewable energy
facilities;
cash incentives for renewable energy developers for missionary electrification;
tax exemption, applicable to both value-added tax and corporate income tax, on carbon
emission credits; and
tax credits on domestic purchases of capital equipment and services.
20
The non-fiscal incentives or market mechanism include the Renewable Portfolio Standard, which
sets a minimum percentage of generation from eligible renewable energy resources; the Feed-in
Tariff System, which authorizes a fixed tariff for electricity produced from emerging renewable
energy resources; the Renewable Energy Market, which will operate in the WESM to facilitate
compliance with the Renewable Portfolio Standard; and the Green Energy Option, which allows
end-users to contract their energy requirements directly from renewable energy facilities.
To address the projected growth in power demand across the country, GBPC is reviewing
opportunities in renewable energy facilities, such as hydroelectric and geothermal facilities, to
complement its existing portfolio and bring down its average cost of generation.
Licenses
Under the EPIRA, no person or entity may engage in the generation of electricity unless such
person or entity has complied with the standards, requirements and other terms and conditions set
by the ERC and has received a Certificate of Compliance (COC) from the ERC to operate
facilities used in the generation of electricity.
The power generation companies of GBPC possess the required COCs.
Government Approval Process

As set forth in the EPIRA, power generation is not considered a public utility operation. Thus, an
entity engaged or intending to engage in the generation of electricity is not required to secure a
franchise. However, no person or entity may engage in the generation of electricity unless such
person or entity has complied with the standards, requirements and other terms and conditions set
by the ERC and has received a COC from the ERC to operate facilities used in the generation of
electricity. A COC is valid for a period of five years from the date of issuance.
In addition to the COC requirement, a generation company must comply with technical, financial
and environmental standards. A generation company must ensure that its facilities connected to
the grid meet the technical design and operational criteria of the Grid Code and Distribution Code
promulgated by the ERC. In this connection, the ERC has issued Guidelines for the Financial
Standards of Generation Companies, which sets the minimum financial capability standards for
generation companies. Under the guidelines, a generation company is required to meet a
minimum annual interest cover ratio or debt service coverage ratio of 1.5x throughout the period
covered by its COC. For COC applications and renewals, the guidelines require the submission to
the ERC of, among other things, comparative audited financial statements, a schedule of
liabilities, and a five-year financial plan. For the duration of the COC, the guidelines also require
a generation company to submit audited financial statements and forecast financial statements to
the ERC for the next two financial years, as well as other documents. The failure by a generation
company to submit the requirements prescribed by the guidelines may be grounds for the
imposition of fines and penalties.
Upon the introduction of retail competition and open access, the rates charged by a generation
company will no longer be regulated by the ERC, except rates for Captive Markets (which are
determined by the ERC). In addition, since the establishment of the WESM, generation
companies are now required to comply with the membership criteria and appropriate dispatch
scheduling as prescribed under the WESM Rules.
In the course of developing a power plant, permits, approvals and consents (including
environmental licenses) must be obtained from relevant national, provincial and local government
authorities relating to site acquisition, construction and operation.
21
Costs and Effects of Compliance with Environmental Laws
The operations of GBPCs power generation facilities are subject to a broad range of safety,
health and environmental laws and regulations. These laws and regulations impose controls on air
and water discharges, the storage, handling, discharge and disposal of fuel, chemicals and wastes,
the employee exposure to hazardous substances and other aspects of the operations. GBPC has
incurred operating costs and capital expenditures and will continue to do so to comply with safety,
health and environmental laws and regulations.
GBPC has undertaken carbon sink projects and has allocated funds for Energy Regulation No. 1-
94 to finance reforestation, watershed management, as well as health and environment
enhancement projects.
Environmental Laws
GBPCs power generation operations follow laws, regulations and policies that concern
environmental protection and sustainability. Each plant consistently submits periodic Self-
Monitoring Report (SMR), Compliance Monitoring Report (CMR) and Compliance
Monitoring and Validation Reports (CMVR) to the Environmental Management Bureau
Regional Offices to ensure that its operations, which include but are not limited to water
discharges and air emissions, comply with the requirements of R.A.9275 Clean Water Act and
R.A. 8749 Clean Air Act. These monitoring reports are performed in the presence of Multi-Partite
Monitoring Team (MMT). The MMT is composed of representatives from various government
and non-government institutions who are tasked to conduct regular monitoring of potential
sources of pollution and help recommend solutions.
(B.4) Healthcare
MPICs Hospital group comprises of full-service hospitals and a mall-based diagnostic and
surgical center and is the largest private provider of premier hospital services in the Philippines.
It delivers medical services including diagnostic, therapeutic and preventive medicine services in
all three major island groupings in the country.
On May 16, 2014, MPIC and GIC Private Limited (GIC) entered into a partnership agreement to
facilitate the further expansion of the hospital group of MPIC. GIC, through its affiliates, invested
=3.7 billion for a 14.4% stake in MPIC's hospital holding company Metro Pacific Hospital
P
Holdings, Inc. (MPHHI, formerly Neptune Stroika Holdings, Inc.). GIC also advanced to MPIC
=6.5 billion by way of an Exchangeable Bond (EB) which will be exchanged into a 25.5% stake
P
in MPHHI in the future, subject to certain conditions. The proceeds from the EB will be used by
MPIC for continuing investments in infrastructure projects.
MPHHI completed the following acquisitions in 2015 and 2016:
On December 28, 2015, MPHHI completed its acquisition of a 20% equity shareholding in
Manila Medical Services, Inc. (MMSI), owner of Manila Doctors Hospital (MDH), from
Metrobank Foundation Inc. (MBFI), the controlling shareholder of MMSI. MDH is a 300-
bed tertiary hospital located in Manila City with annual revenues of approximately P =2.0
billion. It is in the midst of an expansion program where it is constructing a new 18-storey
building that will house new doctors clinics, patient rooms, outpatient diagnostic services,
and additional parking facilities. The new tower is projected to be finished towards the end of
2016, increasing MDHs bed capacity to approximately 500 beds.
22
On December 16, 2015, MPHHI signed an Investment Agreement with Sacred Heart Hospital
of Malolos Inc. (SHHM), a 47-year-old Level Two hospital, a respected institution in the
capital city of Bulacan. MPHHI invested P =150 million in SHHM for a 51% ownership, with
proceeds funding an increase patient beds and the acquisition of new medical equipment.
MPHHI completed the acquisition of SHHM on March 7, 2016.
On July 29, 2016, MPHHI completed its acquisition of 469,077 shares, representing
approximately a 93% stake in Marikina Valley Medical Center Inc.(MVMC) for P =2,117.8 per
share. MVMC is a prominent tertiary hospital along Sumulong Highway in Marikina, With
the completion of the new 7-storey Medical Arts Building, MVMC increased its bed capacity
to 140 beds.
On January 31, 2017, MPHHI infused approximately 133.5 million of cash into Delgado Clinic
Inc. (DCI), owner and operator of the Dr. Jesus C. Delgado Memorial Hospital (JDMH) via a
subscription to preferred shares representing approximately 65% of the total expanded capital
stock of DCI. The cash infusion from MPHHI will enable the 68-year-old JDMH to upgrade its
equipment and facilities to improve its ability to serve its community.
Customers
As at March 1, 2017, MPHHI had interest in thirteen (13) hospitals with approximately 2,900
beds throughout the country:
Eight (8) in Metro Manila: Makati Medical Center (MMC), Cardinal Santos Medical Center
(CSMC), Our Lady of Lourdes Hospital (OLLH), Asian Hospital (AHI), De Los Santos
Medical Center (DLSMC), MDH, MVMC and JDMH; and
Five (5) in other parts of the country: Davao Doctors Hospital (DDH), Riverside Medical
Center (RMCI) in Bacolod, Central Luzon Doctors Hospital (CLDH) in Tarlac, West Metro
Medical Center (WMMC) in Zamboanga, and SHHM in Bulacan.
In addition, MPHHI has also invested in a mall-based diagnostic and surgical center MegaClinic
in SM Megamall, and has indirect ownership in two healthcare colleges, Davao Doctors College
in Davao and Riverside College Inc. in Bacolod.
This segment is mass-based such that the loss of a few customers would not have a material
adverse effect on MPIC and its subsidiaries taken as a whole. There is also no single customer
that accounts for twenty percent (20%) or more of the segments sales.
Competition
Major competitors in the healthcare business include other tertiary hospitals. However, increasing
health awareness creates unsatisfied demand in the industry.
MPHHI uses its skill as a corporate manager to enhance operating efficiency and streamline the
business models of its hospitals. Additionally, MPHHI continues to realize economies of scale
through group purchasing and the sharing of technical and human resources.

Colinas Healthcare, Inc. (CHI) (a wholly-owned subsidiary of CVHMC) operates and manages
the MERALCO Corporate Wellness Center (Wellness Center), an outpatient diagnostic and
consultation center for its employees and their dependents. Refer to Note 21 Related Party
Transactions of the 2016 Audited Consolidated Financial Statements for further details.
23
(B.5) Rail
MPIC operates its rail business through its wholly owned subsidiary, MPLRC. MPLRCs main
activity is the holding of shares both at Light Rail Manila Holdings Inc. (LRMH) as well as
LRMC. LRMC holds the exclusive concession granted by the DOTC and Light Rail Transit
Authority (LRTA), on behalf of the Philippine Government to operate and maintain the existing
LRT Line 1 as well as to extend the line south from Baclaran to Niog, Cavite. LRMH holds shares
in LRMC. MPLRCs effective stake at LRMC (directly and through LRMH) as at December 31,
2016 and 2015 was 55%.

On October 2, 2014, LRMC entered into a concession agreement with DOTC and LRTA. Under
the concession agreement, DOTC and LRTA granted LRMC the exclusive right to operate and
maintain the existing LRT Line 1 and construct an 11.7-kilometer extension from the present end-
point at Baclaran to the Niog area in Bacoor, Cavite. LRMC was formally awarded the project by
the DOTC and LRTA following the submission of a lone bid with a premium of P =9.35 billion.
The concession period is for 32 years from takeover date and ends in 2047.
DOTC granted an Operating Franchise to LRMC on September 11, 2015. LRMC took over
operating and maintaining LRT-1 the next day, September 12, 2015.

Necessary government approvals in relation to the operation of the rail business and the related
non-rail revenues have been secured and documented in the related concession agreement.
LRMC has the right to apply for an adjustment of the fare based on the specific fare adjustment
formula under LRMCs concession agreement with the Philippine Government. This formula
specifies an initial boarding and per-kilometer fare with 10.25% increases over these initial fares
every two years beginning in August 2016, subject to inflation rebasing if inflation falls outside
an acceptable band. If the approved fare is different from the formula specified on the concession
agreement, both the Philippine Government and LRMC are obligated to substantially keep the
other party whole, depending if the actual fares represent a deficit or a surplus. Any fare deficit
compensation not received in a timely manner, in full or at all, could have a material adverse
effect on the LRMCs results of operations and financial condition.
In July 30, 2014, the Supreme Court issued a temporary restraining order on the commencement
of the construction of common station at the vicinity of the existing MRT-3 North Avenue Station
along EDSA. Although the common station is a deliverable of the Philippine Government,
LRMCs business is materially impacted by any potential delays because ridership is expected to
increase materially with the completion of common station. Under the concession agreement, the
Philippine Government is obligated to hand over the common station to LRMC by October 1,
2018. The Common Station Project was signed on January 18, 2017 by the Department of
Transportation (DOTr), the Department of Public Works and Highways and relevant rail and
mall operators.
LRMC also depends on the government approvals for the acceptance and the funding of any
potential liquidated damages resulting from unfulfilled obligations.

There are no anticipated changes to government regulations that will significantly affect the Rail
business of the Group. However, the main variable affecting the extent or likelihood of earnings
24
growth at MPIC is the ability of the LRMC to secure the tariff adjustments and ability to collect
the liquidated damages under the concession agreement that govern LRMCs concession.
The concession agreement establishes an initial fare rate and an adjustment formula for setting the
appropriate toll rate. The fare adjustment is scheduled every two calendar years beginning in
August 1, 2016 with a starting initial fare supposedly implemented on August 1, 2014. If the
fares approved by the government is lower than the fares stipulated in the concession agreement,
the Government is obligated to pay the difference and keep LRMC whole.
As at March 1, 2017, LRMC continues to await approval by the Government of the full initial
fares as stipulated in the concession agreement.
Customers
The rail business of LRMC enjoys a sole concession of the LRT-1. This segment is mass-based
such that the loss of a few customers would not have a material adverse effect on MPIC. There is
also no single customer that accounts for twenty percent (20%) or more of the segments sales.
Distribution
Rail farebox revenues are from manual fare payment through single journey tickets and usage of
pre-paid credits on stored value cards. Non-farebox revenues are primarily from direct payments
by tenants and advertisers.
Competition
While LRMC was granted the sole right to operate and maintain LRT Line 1, customers have
non-rail alternatives such as buses and jeepneys.

In 2014, AF Payments Inc. (AFPI), in which MPIC has a stake of 20%, was granted the rights and
obligations to design, finance, construct, operate, and maintain the Automated Fare Collection
System Project (AFCS Project) for LRT-1, LRT-2, and Metro Railway Transport 3 (MRT-3). The
AFCS Project, which was founded under the Build-Operate-Transfer Law, accommodates a
contactless smartcard technology for stored value and single journey ridership. When AFPI bid
for the AFCS Project, AFPI won the bid because it will not be charging public transport offices
fees for the use of its system. As such, LRMC is not paying AFPI for the use of its system (see
Note 21 Related Party Transactions of the 2016 Audited Consolidated Financial Statements).

LRMCs facilities are required to be maintained in compliance with the environmental standards
set primarily by the DENR. ECC have been issued previously to LRTA, namely ECC 0801004-
7110 issued 2008, and ECC-O-8507-078-208 issued 1987 for the existing LRT 1 rail system.
For the commencement of the construction of the Cavite extension, LRTA has already obtained
an ECC from the DENR under reference no. ECC-CO-1305-0018 issued in 2013. The ECC
requires the proponent to abide by the following conditions: (1) Implementation of a Solid Waste
Management Program, (2) Implementation of a dust control system at the construction site, (3)
Construction and Installation of drainage structures, (3) Implementation of a social development
program including priority employment for local residents within the direct impact areas, (5)
Conduct and submit a Traffic Impact Assessment and a Traffic Management Program, (6) Submit
evidence of compliance to all pertinent environmental regulations, (7) Set up an Environmental
Guarantee Fund (EGF), a Multipartite Monitoring Team (MMT), and an Environmental
Monitoring Fund (EMF), (8) Establish an Environmental unit, (9) Submit a joint undertaking
between Grantor and Concessionaire. Regulations require the grantee to submit a quarterly report
25
of its environmental monitoring activities and a semi-annual report of its compliance to the above
stated ECC.
LRMC has a dedicated environmental team that regularly monitors compliance with its
ECCs and ensures measurement of significant environmental metrics for purposes of
compliance with the reporting requirements.
(B.6) Logistics
Following extensive study, MPIC has concluded there is merit in moving into logistics. MPIC
made its first investment into the logistics business through MMI. MMI is to provide services in
logistics, shipping, freight forwarding and e-commerce fulfillment.
On May 19, 2016, MMI completed the purchase of the businesses and assets (including certain
contracts) of Basic Logistics Inc., A1Move Logistics, Inc., Philflash Logistics, Inc. and BasicLog
Trade and Marketing Enterprises (Basic Group), all of which are involved in the logistics
business. The transaction involves the acquisition by MMI of the logistics businesses and assets
(including certain contracts) of Basic Group for a total purchase price consideration of P =2.2
billion, inclusive of applicable value-added taxes. The transaction was carried out through an
asset purchase agreement involving, among others: (a) the sale by Basic Group of identified
logistics assets, (b) the novation of certain key contracts of the Basic Group with their respective
clients, (c) the execution of new contracts required to ensure continued operations of the business
under MMI, and (d) the transfer of certain key officers and employees of Basic Group to MMI
(see Note 4 - Business Combinations and Acquisition of Non-controlling Interests of the 2016
Audited Consolidated Financial Statements).
In January 2017, PremierLogistics, Inc. (Premier), a subsidiary of MPIC, entered into a definitive
agreement to acquire certain assets and business of Ace Logistics, Inc. (Ace) for an aggregate
purchase price of P=280.0 million. The transaction will be carried out through an asset purchase
agreement. The closing of the transaction is subject to the satisfaction of certain conditions
precedent, which as of March 1, 2017 has not been completed yet but the parties intend to fulfill
within the first quarter of 2017. Ace is engaged in the business of logistics, including
warehousing, courier express and parcel delivery, e-commerce delivery, trucking, freight
forwarding, customs brokerage and domestic shipping. Ace also has a strong presence in pre-
delivery inspection in the automotive industry, which Premier intends to expand. The assets and
business that will be acquired in the transaction will be utilized to further expand MPICs logistics
business (see Note 39 - Events after the Reporting Period of the 2016 Audited Consolidated
Dependence on a Single Customer

MMI is not affected with the concentration or dependence with single or few customers. The
company has customers in different industries such as Sugar, Food and Beverage, Retail and
consumer products.
Source of Raw Materials

Sources of its cost of services are from realtors for leasing of warehouses; manpower, warehouse
and trucking service providers; transportation equipment vendors for trucks; material handling
vendors such as forklifts and racks.
26
(B.7) Others
Neo Oracle Holdings, Inc. (NOHI) and its subsidiaries are engaged in the business of real estate
investments and property development, investment holding and management services.
On July 18, 2012, the stockholders and BOD of NOHI resolved to amend its Article of
Incorporation to reflect (1) the change in name from Metro Pacific Corporation to Neo Oracle
Holdings, Inc.; (2) shortened corporate life until December 31, 2013; and (3) reduce its BOD
members from 11 to 5. Hence, NOHI is deemed dissolved as at December 31, 2013 and can no
longer conduct business except with respect to transactions in furtherance of its liquidation. With
the shortening of the corporate life, NOHI is not currently active but holds investments in lands
and properties. NOHI continues to implement measures geared towards generating liquidity to
meet maturing obligations which include settlement of the remaining third party debts via debt-
for-asset swap arrangements, negotiation for discounts on principal and waiver of interests and
penalties.
(C) Registrants present employees
As at December 31, 2016, the Parent Company has a total headcount of 49 employees
(Administrative: 38, Clerical: 11), who are neither unionized nor covered by special incentive
arrangements. The Parent Company expects to increase its headcount in the next twelve months to
50.
(D) Registrants Major risks
As an investment and management company, MPIC undertakes risk management at a number of

distinct levels:
(D.1) On entering new investments
MPICs geographic focus is still predominantly the Philippines within which its management
team has extensive experience. MPIC has recently begun expanding its operations in Southeast
Asia through its equity investments in Don Muang Tollways Public Company Limited in
Thailand and in CII Bridges and Roads Investment Joint Stock Company in Vietnam; these
investments are made in partnership with established reputable local partners.
Prior to making a new investment, any business to be acquired is subject to an extensive due
diligence including financial, operational, regulatory and risk assessment as well as dispute
resolution mechanisms. Risks to investment returns are then calibrated and specific measures to
manage these risks are determined. The Company is highly selective in the investment
opportunities it examines. Due diligence is conducted on a phased basis to minimize costs of
evaluating opportunities that may ultimately not be pursued.
MPICs investments involve - in varying degrees - a partnership approach with MPIC taking a
controlling position and key operating partners providing operational and technological input
thereby mitigating risks associated with investing in new business areas. These partners are equity
partners - and having co-invested with the Company in a particular opportunity, they participate
in the risks and rewards of the business alongside MPIC.
Financing for new investments is through a combination of debt and/or equity by reference to the
underlying strength of the cash flow of the target business and the overall financing position of
MPIC itself.
27
(D.2) On ongoing Management of the Financial Stability of the Holding Company
MPIC does not guarantee the borrowings of its investee companies and there are no cross default
provisions from one investee operating company to another. Financial stability of the holding
company, including its dividend commitment to shareholders, is managed by reference to the
ability of the investee companies to remit dividends to MPIC to cover operating costs and service
borrowings. We avoid currency and investment cycle mismatches by borrowing only in Pesos
using primarily long term instruments with fixed rates. The Company sets the level of debt on its
own balance sheet so as to withstand variability of dividend receipts from its operating companies
associated with regulatory and other risks described below.
(D.3) Risk Management within the Operating Companies
o Operational risks. Each of the operating companies has a full management team which is
responsible for having their own plan to manage risk which is reviewed annually by their
respective Risk Management Committees and periodically by MPIC.
o Political and Regulatory. The majority of MPICs invested capital is deployed into
businesses which are directly regulated by arms of the state: electricity distribution; water
supply and distribution along with sewage treatment; tollroads; and light rail. Each of these
businesses has concession or franchise agreements which involve a degree of operating
performance obligation in order to retain our rights and earn our expected returns. In some
cases, these agreements provide for retrospective assessment of the extent of our overall
operational and financial performance sometimes over a period of years.
Risks arising from these types of businesses include the potential for differences with
regulators involving interpretation of the relevant agreements either during the period in
question or in retrospect. To manage these risks, the investee companies have established
dedicated regulatory management groups with experienced personnel. Their duty is to
manage the relationship with regulators, keep management up-to-date on the status of the
relationship and ensure companies are well prepared for any forthcoming regulatory changes
or challenges.
MPTC sets tariffs on new road projects based on traffic projections agreed with the regulator.
Changing fuel prices, alternative means of transport and free roads built by Government can
affect the number of vehicles that use our roads. We alleviate this risk by choosing our
projects carefully. Existing high traffic density, difficulty in securing competing routes, a high
potential for growth given demographic changes and conservative growth estimates are the
important variables we consider when committing to traffic projections with the regulator.
For the Hospitals group, investment is taking place to enable more qualified personnel to
better serve patients more efficiently and effectively in upgraded facilities and with better
equipment. The primary risk is that investment runs ahead of demand and patient ability or
willingness to pay. We mitigate this risk by ensuring we know our target market and scale our
improvements to their ability to pay. The pace of medical innovation is accelerating. This
requires increased management of the risks that costly equipment may become out of date
before its cost is fully recovered and traditional healthcare delivery models may be disrupted.
o Competition and Market. There is strong competition in bidding for the various Public-
Private Partnership (PPP) projects offered by the Philippine Government which has reduced
forecast equity returns for winning bids. MPIC manages the risks associated with this by
adhering to the holding companys investment disciplines outlined above.
28
Excluding PPP, competitive and market-driven demand risks are most pronounced in
MERALCO, GBPC, MPTC, Healthcare group, and Logistics.
MERALCO carries a degree of market risk and its returns in the short term may be influenced
by consumers who elect to self-generate and disconnect from the distribution grid. We are
mitigating that risk by improving efficiencies to the point that makes it largely uneconomic to
self-generate.
With the move to Open Access from June 2013, MERALCO has taken on risks associated
with buying and selling power on its own account instead of on a pass through basis.
MERALCO has put in place an experienced management team to lead this business.
MERALCO and GBPC are invested in power generation with attendant demand volume and
price risks as well as fuel source price and supply risks. The primary mitigants are to be
cautious with timing of capacity additions and to contract so as to match demand and supply
side volumes where possible.
MPICs increasing investment in Logistics business also increases competition risk due to the
presence in the Philippines of several other large service providers.
MPIC addresses competition risks in its operating companies through appointing strong
management teams who have expertise in these business segments.
o Supply Risk. MPICs water company, Maynilad, has some supply side risk in that: (i) it
secures almost all of its supply from a single source the Angat dam; and (ii) this water
source is shared by another water concessionaire, a hydroelectric plant, and the needs of
farmers for irrigation. A water usage protocol is in place to ensure all users receive water as
expected within the constraints of available supply. Following significant water supply
disruptions in the past, the business has experienced periods of lower water supply than
allowed for in its concession. We have worked to moderate our reliance on Angat by
developing the Putatan Water Treatment Plant. In addition, the Sumag Diversion Project,
which was initiated by the Government, aims to provide additional 188 MLD, was jointly
implemented by Maynilad and Manila Water.
The power generation companies in the MPIC portfolio depend on varying grades of coal for
their fuel. Primary supply sources are backed up by alternative supply sources and carrying
appropriate inventories.
o Other Operational risk.

Light Rail Manila Corporation (LRMC), has significant operational safety and security
risks. These risks have been exacerbated by the poor condition and inadequate
maintenance of the system prior to the 12 September 2015 takeover by LRMC. We are
mitigating these risks by appointing a combination of strong senior management and
consultants with extensive light rail operating experience.
In LRMC, there are also risks to projected financial returns through late delivery of
Government procured items such as Rights of Way, additional Light Rail Vehicles
(LRVs), and the Common Station. Plans to mitigate these risks include consistently
engaging the regulators on the status of the projects milestones and joint regular
performance reviews by both parties the Concessionaire (LRMC) and the Grantors (the
Department of Transportation and Communications or DOTC and the Light Rail Transit
Authority or LRTA).
29
MERALCO, GBPC, Maynilad and Tollroads each have business continuity programs in
place to endeavor to cope with natural disasters and climate change risks.
MPIC addresses human capital risk through appropriate retention programs and
succession planning.
MPIC promotes and rewards risk-awareness and good corporate governance practices
across the Group to ensure the upholding of its corporate values at all times.
(D.4) Financial Risk Management
MPICs investee companies financial risks are primarily: interest rate risk, foreign currency risk,
liquidity risk, credit risk and equity price risk (see Note 35 - Financial Risk Management
Objectives and Policies to the 2016 Audited Consolidated Financial Statements). The Board of
Directors of each investee company reviews and approves policies for managing each of these
risks as follows:
Interest Rate Risk. Interest rate exposure is managed by using a mix of fixed and variable rate
debt.
Foreign Currency Risk. In general the investee companies will place some degree of reliance
on their regulated return mechanisms to pass through foreign currency risk. The current
liquidity and depth of the Philippine credit market is such that there should be little need for
raising new borrowings in foreign currency.
Maynilad has some foreign currency borrowing but there is a mechanism in place wherein it
can recover currency fluctuations as approved by MWSS.
Liquidity Risk. Each business monitors its cash position using a cash forecasting system
wherein all expected collections, disbursements and other payments are determined in detail.
Credit Risk. Credit risk is managed by setting limits on the amount of risk a business is
willing to accept for individual counterparties and by monitoring exposures in relation to such
limits.
Equity Price Risk. The Companys investee companies are generally not faced with equity
price risk beyond that normal for any listed company, where relevant. MPICs investment in
MERALCO, through Beacon Electric, is partly financed by borrowings which require a
certain security cover based on the price of MERALCOs shares on the Philippine Stock
Exchange (PSE) on a volume weighted 30 trading day average calculation. MERALCOs
share price would have to decline by 82.05% from its price as at December 31, 2016 before
Beacon Electric would be required to top-up collateral with cash or pay-down debt.
The regulatory returns for MERALCO and Maynilad are benchmarked in part to the changing
cost of equity in the Philippines with a positive correlation between rising equity risk
premiums and nominal returns.
30
Item 2. Description of Properties
Toll Roads Segment. NLEX Corp and CIC, own their head office buildings in Balintawak, Caloocan
City and Paranaque City, respectively. Other equipment, which is relatively insignificant, consists of
transportation equipment and office equipment primarily located in their respective head offices.
NLEX Corp and CIC do not own the parcels of land over which the toll roads have been built as these
are owned by the Republic of the Philippines. NLEX Ventures Corporation (NVC), a wholly owned
subsidiary of NLEX Corp, acquired parcels of land located in Valenzuela City. NVC plans to develop
the land properties for commercial use and for lease with business proponents.
Water Segment. Maynilad is tasked to manage, operate, repair, decommission and refurbish certain
specified MWSS facilities in the West Service Area. The legal title to these assets remains with
MWSS. The legal title to all property, plant and equipment contributed to the existing MWSS system
by Maynilad during the concession period remains with Maynilad until the expiration date (or on
early termination date) at which time, all rights, titles and interest in such assets will automatically
vest to MWSS.
Maynilad leases the office space and branches where service outlets are located, equipments and
service vehicles, renewable under certain terms and conditions to be agreed upon by the parties.
Refer to Note 33 - Significant Contracts, Agreements and Commitments to the 2016 Audited
Rail Segment. Under the LRT-1 concession agreement, the ownership of the existing LRT-1 system
taken over by LRMC remains with the Grantors (the LRTA and DOTC). This includes the existing
depot, railway system, rolling stock, stations and track. Moreover, the ownership of all items
procured by the Grantors after LRMCs takeover, including any new LRVs, will remain with the
Grantors. The ownership of the planned railway infrastructure extension (south of the Baclaran
station) and new signaling system will vest to the Grantors upon the final commissioning and
acceptance. LRMC does not own the parcels of land over which the railway system lies as these are
owned by the Grantors.
Healthcare Segment. MPHHI is developing the Philippines first nationwide chain of leading
hospitals to deliver comprehensive in-patient and out-patient hospital services, including medical and
surgical services, diagnostic, therapeutic intensive care, research and training facilities in strategic
locations in the Philippines:
MMC is a multi-specialty tertiary medical centre situated in the central business district of
Makati, Metro Manila.
AHI is a hospital located in Alabang, Muntinlupa in Southern Metro Manila.
DLSMC is a mid-market teaching and training hospital in Quezon City, the largest city in
Metro Manila.
MDH, a tertiary hospital located in the City of Manila.
MVMC is a prominent tertiary hospital along Sumulong Highway in Marikina City.
JDMH is tertiary general hospital is located in Kamuning Road, Quezon City
SHHM is a Level Two hospital in Malolos Bulacan.
DDH is considered to be the largest and one of the best medical facilities offering modern
diagnostic, therapeutic and intensive care services in Southern Philippines.
RMCI, also known as Dr Pablo O. Torre Memorial Hospital, is the largest and a leading
medical facility in Bacolod in the island of Negros, Western Visayas.
CLDH is the largest tertiary hospital in Tarlac.
MegaClinic is a mall-based diagnostic and ambulatory care center located in Metro Manila.
Lease Arrangements. East Manila Hospital Managers Corp. (EMHMC), CVHMC and MPZHC
entered into lease agreements with Servants of the Holy Spirit, Inc., Roman Catholic Archbishop of
31
Manila and Western Mindanao Medical Center, Inc. (WMMC) for the management and operation of
OLLH, CSMC and WMMC, respectively. The lease of EMHMC and CVHMC are for a period of 20
years, renewable for successive periods of 10 years upon the mutual consent of both parties. The lease
of MPZHC us for a period of 20 years and may be renewed under terms and conditions mutually
acceptable. As consideration for the lease agreement, MPZHC pays fixed fees while EMHMC and
CVHMC pay fixed and variable monthly rates, where the variable rate is based on the prior years net
revenues (see Note 33 Significant Contracts, Agreements and Commitments to the 2016
Audited Consolidated Financial Statements).
Item 3. Legal Proceedings
The Group is a party to various legal matters and claims arising in the ordinary course of business.
These various legal proceedings are properly disclosed in Note 32 - Contingencies to the 2016
Audited Consolidated Financial Statements attached hereto.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth quarter of the fiscal
year covered by this report.
32
PART II OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Registrants Common Equity and Related Stockholder Matters
Market Price of and Dividends on Registrants Common Equity and Related Stockholder
Matters
Market information
The Registrants common shares are listed on the PSE. The high and low sales prices of such
shares for the last quarter of the years 2014, 2015, 2016 and the 1st quarter of 2017 are set out
below. The share price as at the close of business on March 31, 2017 was P =6.02.
Quarter Low High

2014
1st 4.06 4.06
2nd 4.70 4.70
3rd 4.77 4.77
4th 4.22 4.22
2015
1st 4.59 4.59
2nd 4.20 4.20
3rd 4.40 4.40
4th 4.93 4.93
2016
1st 5.68 5.54
2nd 6.17 6.02
3rd 7.22 7.06
4th 6.88 6.66
2017
1st 6.63 6.78
33
Holders
The total number of stockholders as at March 31, 2017 is 1,311
Top 20 Stockholders as at March 31, 2017
Number of
Rank Stockholder Name Percent
Shares
1 Metro Pacific Holdings, Inc. 13,222,948,170 41.94%
2 PCD Nominee Corporation (Non-Filipino) 8,610,967,695 27.31%
3 PCD Nominee Corporation (Filipino) 8,323,962,335 26.40%
4 GT Capital Holdings, Inc. 1,300,000,000 4.12%
5 Metro Pacific Investments Corporation* 23,970,000 00.08%

Albert F. Del Rosario and/or Margaret
6 11,516,624 00.04%
Gretchen V. Del Rosario
7 Ray Celis Espinosa 5,000,001 00.02%
8 Manuel Velez Pangilinan 4,250,001 00.01%
9 Lucio W. Yan and/or Clara Y. Yan 2,850,000 00.01%
10 Amado R. Santiago III 2,500,000 00.01%
11 Ferdinand G. Inacay 1,500,000 00.00%
12 Raul L. Ignacio 1,000,000 00.00%
13 Tessa G. Acosta 1,000,000 00.00%
14 Baby Lea M. Wong 1,000,000 00.00%
15 Nicolas G. Manalo 1,000,000 00.00%
16 Lucio W. Yan and/or Clara Y. Yan 1,000,000 00.00%
17 First Life Financial Co., Inc. 830,000 00.00%
18 Berck Y. Cheng 650,000 00.00%
19 J. Luigi L. Bautista 650,000 00.00%
20 Edwin U. Lim 600,000 00.00%

* Reflected as Treasury Shares in MPICs Consolidated Financial Statements. (see Note 22 Equity to
the 2016 Audited Consolidated Financial Statements)
34
Dividends
Apart from cash restrictions and retained deficit position of the Parent Company, it may not
declare or pay cash dividends to its stockholders or retain, retire, purchase or otherwise
acquire any claims of its capital stock or make any other capital or asset distribution to its
stockholders if, at the time of such declaration: (i) its Debt-to-Equity Ratio exceeds 70:30;
(ii) its Debt Service Coverage Ratio is below 1.3x; and (iii) the funds in deposit in the Debt
Service Account do not meet the required Debt Service Account balance.
Following are the cash dividends declared by MPICs board of directors in favor of MPIC
common and preferred shares for the past three years ended December 2014, 2015 and 2016:
Rate per Preferred

Year Record Date Payable Date
Common Share Dividends
=0.022
P =2.5 million
P 4/8/2014 4/30/2014
2014 =0.026
P =2.5 million
P 8/29/2014 9/24/2014
=0.040*
P =1.3 million
P 12/2/2014 12/18/2014
=0.037
P =1.3 million
P 3/25/2015 4/17/2015
2015
=0.032
P =2.5 million
P 9/1/2015 9/23/2015
P0.061
= P2.5 million
= 3/30/2016 4/21/2016
2016
=0.032
P =2.9 million
P 9/1/2016 9/26/2016
*Special one-off dividend
On March 1, 2017, the BOD approved the declaration of the cash dividends of P =0.068 per
common share in favor of the Parent Companys shareholders of record as at March 30, 2017
with payment date of April 26, 2017. On the same date, the BOD approved the declaration of
cash dividends amounting to P
=4.6 million in favor of the preferred shareholders.
Recent Sales of Unregistered or exempt Securities
During the last three years, MPIC issued the following shares via private placements for
which exemptions from registration were claimed and notices of exempt transactions were
accordingly filed with the Philippine SEC:
1. On May 27, 2016, MPIC entered into a Shares Subscription Agreement with GTCHI for
the subscription by GTCHI of 3,600,000,000 common shares in MPIC at a subscription
price of P
=6.10 per share. The subscription Shares was issued out of the increased
Authorized Capital Stock approved last August 5, 2016.
2. On May 27, 2016, MPIC also entered into a Share Subscription Agreement with MPHI
for the subscription by MPHI of 4,100,000,000 newly issued Class A Voting Preferred
Shares at par value for a total consideration of P
=41.3 Million.
3. MPIC, together with its principal shareholder, MPHI entered into a placement agreement
with UBS AG, Hong Kong Branch on February 9, 2015, in respect of the offer and sale
(the Offer) by MPHI of 1,812,000,000 common shares of MPIC at the Offer Price of
=4.90 per share. Closing of the Offer is conditioned, among others, on MPHI subscribing
P
(or agreeing to subscribe) to the same number of shares at the offer price or a total of
approximately P =8.9 billion.
35
The abovementioned notices of exempt transactions were made on the basis of:
i. Section 10.1(e) of the Securities Regulation Code (SRC) The sale of capital stock of a
corporation to its own stockholders exclusively, where no commission or other
remuneration is paid or given directly or indirectly in connection with the sale of such
capital stock.
The abovementioned issuances were issued by MPIC to MPHI, its majority stockholder,
and GTCHI, exclusively and no commission or other remuneration was paid or given
directly or indirectly in connection with such issuances.
ii. Section 10.1 (k) of the SRC The sale of securities by an issuer to fewer than twenty (20)
persons in the Philippines during any twelve-month period.
MPIC issued securities to fewer than twenty (20) persons in the Philippines during any
twelve-month period.
The above described request for exemption from registration was made on the basis of
Section 10.1 of the SRC. MPIC averred that by reason of the relative small amount and
limited character of the aforesaid issuance, registration is not necessary for the public
interest and for the protection of prospective investors who are employees of MPIC
and/or its subsidiaries and affiliates and are in the position to know the present affairs of
MPIC and the risks of investing therein.
36
Item 6. Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD & A)
Financial Highlights and Key Performance Indicators
The following discussion and analysis of the Groups financial condition and results of operations
should be read in conjunction with the accompanying audited consolidated financial statements and
the related notes as at December 31, 2016 and 2015 and for the years ended December 31, 2016,
2015, and 2014 included in this Report. Key performance indicators of the Group are as follows:
2016 2015 2014

Audited
(in Php Millions)
Operating Revenues 44,820 37,239 33,832
Income before income tax 20,937 16,899 13,782
Net income attributable to owners of the Parent
Company 11,456 9,546 7,940
Core EBITDA 24,723 21,198 19,188
Core income 12,106 10,346 8,508
Non-recurring income (expense) (650) (800) (568)
Core EBITDA margin 55% 52% 57%
Overview
Highlights for 2016 which had significant impact on the financial results of the Group are as follows:
Strategic alliance with the GT Capital Holdings Inc. (GTCHI). On May 27, 2016, GTCHI
acquired 1.3 billion common shares from MPHI. On the same date, MPIC entered into a Share
Subscription Agreement with GTCHI for the subscription by GTCHI of 3.6 billion common
shares in MPIC (see Note 22 Equity to the 2016 Audited Consolidated Financial Statements).
Increased participation in the Philippine Power Sector. MPIC has significantly increased its
participation in the power sector in the Philippines:
o Acquisition of 25% of Beacon Electric common and preferred shares. On May 30, 2016,
MPIC acquired an additional 25% of Beacon Electric common and preferred shares, for
an aggregate consideration of P
=26 billion, bringing effective ownership in Beacon
Electric to 75%. MPICs effective economic interest in MERALCO increased from
32.5% to 41.2% (see Note 11 Investments and Advances to the 2016 Audited
o Acquisition of GBPC. Beacon Electric, through a wholly owned entity BPHI, entered into
a Share Purchase Agreement with GTCHI to acquire an aggregate 56% of the ordinary
and issued share capital of GBPC for an aggregate consideration of P
=22.06 billion.
The investment in GBPC is already accretive to the earnings of Beacon Electric (see Note
11 Investments and Advances to the 2016 Audited Consolidated Financial Statements).
Investing in the high growth wastewater EPC and O&M market. On June 16, 2016, MPWIC
completed the acquisition of 65% of the outstanding capital stock of ESTII. ESTII is engaged in
the business of designing, supplying, constructing, installing, and operating and maintaining
37
wastewater and sewage treatment plant facilities. (see Note 4 Business Combinations and
Acquisition of Non-controlling Interests to the 2016 Audited Consolidated Financial Statements).
Expansion through Non-regulated Infrastructure Business. On May 19, 2016, MMI completed
the purchase of the businesses and assets (including certain contracts) of Basic Logistics Inc.,
A1Move Logistics, Inc., Philflash Logistics, Inc. and BasicLog Trade and Marketing Enterprises
(Sellers), all of which are involved in the logistics business. (see Note 4 Business Combinations
and Acquisition of Non-controlling Interests to the 2016 Audited Consolidated Financial
Statements).
Acquisitions of Hospitals (see Note 4 Business Combinations and Acquisition of Non-

controlling Interests to the 2016 Audited Consolidated Financial Statements)
o SHHM. On December 16, 2015, MPHHI signed an Investment Agreement with SHHM,
a 47-year-old Level two hospital which is a respected institution in Bulacan City.
MPHHI invested P =150 million in SHHM for a 51% ownership, with proceeds funding an
increase patient beds and the acquisition of new medical equipment. MPHHI completed
the acquisition of SHHM on March 7, 2016.
o MVMC. On July 29, 2016, MPHHI completed the acquisition of a 93% stake in MVMC,
a leading tertiary hospital in the eastern side of Metro Manila, for P
=993 million.
Expanding Water Business outside of Metro Manila
o LARC, in which MPWIC has 27% effective ownership, commenced the operation and
management of the distribution network of the Laguna Water District (LWD) on January
1, 2016. (see Note 11 Investments and Advances to the 2016 Audited Consolidated
o On July 4, 2016, MILO, a wholly owned subsidiary of MPWIC, and MIWD created and
established MIBWSC, a joint venture company that will rehabilitate, expand, operate, and
maintain MIWDs existing water production facilities. On July 5, 2016, MIWD officially
turned over the operation to MIBWSC (see Note 1 Concession Arrangements to the
Integration of NLEX and SCTEX Toll Collection System. On March 15, 2016, NLEX Corp
completed the integration of NLEX and SCTEX toll systems, reducing the number of toll
collection stops to two from five between Balintawak and Subic in each direction.
Financing capital expenditure through loan facilities (see Note 19 Long-term Debt to the 2016
Audited Consolidated Financial Statements)
o NLEX Corps = P 5 billion Term Loan. On January 29, 2016, NLEX Corp entered into a
=5.0 billion ten-year term loan facility agreement with Unionbank of the Philippines to
P
finance capital expenditure such as Segment 10 and NLEX-SLEX Connector Road.
Cumulative amount drawn is at P =2.0 billion as of December 31, 2016. The P
=3.0 billion
undrawn amount is available up to July 24, 2017.
o LRMCs Omnibus Loan and Security Agreement (OLSA). On February 11, 2016, LRMC
entered into a P
=24.0 billion 15-year OLSA with Metropolitan Bank & Trust Company
(Metrobank), Security Bank Corporation (SBC) and Rizal Commercial Banking
Corporation (RCBC), each contributing P =9.0 billion, P
=7.5 billion and P
=7.5 billion,
respectively. Portion allocated for the Cavite Extension and rehabilitation of the existing
38
LRT-1) system amounted to P =15.3 billion and P
=8.7 billion, respectively. Cumulative
drawn amount from this facility as at December 31, 2016 amounted to P =657.0 million.
o MPICs = P 16.5 Billion Facility. On December 1, 2015, MPIC entered into separate
agreements to secure loan facilities in the aggregate amount of P
=16.5 billion. MPIC drew
=6.0 billion from this facility in 2016, proceeds of which were used by MPIC to finance
P
its investment in various projects and other general corporate purposes. As at December
31, 2016, the undrawn amount from this facility amounting to P =10.5 billion is available
until June 30, 2017.
Investing in public-private partnership projects
o Cebu-Cordova Link Expressway (CCLEX). In April 2016, MPTC signed a joint venture
agreement with the City of Cebu and Municipality of Cordova to build the P
=27.9 billion
Cebu-Cordova link expressway.
o NLEX-SLEX Connector Road Project (Connector Project). Concession agreement for the
Connector Project was signed on November 23, 2016. (see Note 1 Concession
Arrangements to the 2016 Audited Consolidated Financial Statements)
Adoption of New Standards and Interpretations
The Companys accounting policies are consistent with those followed in the preparation of the
Companys most recent annual consolidated financial statements, taking into account the changes in
accounting policies and the adoption of the new and amended Philippine Financial Reporting
Standards (PFRS), which became effective on January 1, 2016. Adoption of new standards did not
have a material impact on the Companys financial results. Please refer to Note 40 Significant
Accounting Policies Changes in Accounting Policies and Disclosures to the 2016 Audited
Description of Operating Segments of the Group
As discussed under Item 1 B. Business of Issuer, the Group is organized into the following segments
based on services and products: water, toll operations, power, healthcare, rail, logistics and others.
Operational Review
I - MPIC Consolidated
The Companys chief operating decision maker is the BOD. The BOD monitors the operating results
of each business unit separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on: consolidated net income for
the year; earnings before interest, taxes and depreciation and amortization, or Core EBITDA; Core
EBITDA margin; and core income. Net income for the year is measured consistent with consolidated
net income in the consolidated financial statements.
Core EBITDA is measured as net income excluding depreciation and amortization of property and
equipment and intangible assets, asset impairment on noncurrent assets, financing costs, interest
income, equity in net earnings (losses) of associates and joint ventures, net foreign exchange gains
(losses), net gains (losses) on derivative financial instruments, provision for (benefit from) income tax
and other non-recurring gains (losses). Core EBITDA margin pertains to Core EBITDA divided by
service revenues.
39
Performance of the operating segments is also assessed based on a measure of recurring profit or core
income. Core income is measured as net income attributable to owners of the Company excluding the
effects of foreign exchange and derivative gains or losses and non-recurring items (NRI), net of tax
effect of aforementioned. NRI represent gains or losses that, through occurrence or size, are not
considered usual operating items.
The following section includes discussion of the Companys results of its operations as presented in
its consolidated financial statements as well as managements assessments of the performance of the
Group which is translated to core (or recurring) profit and non-core (or non-recurring) profit.
2016 versus 2015
MPIC Consolidated Statements of Income
Increase
2016 2015 (Decrease)
Audited Amount %
(in Php Millions)
Operating Revenues 44,820 37,239 7,581 20
Cost of Sales and Services 18,370 14,026 4,344 31
General and administrative expenses 9,062 8,047 1,015 13
Interest expense 5,328 4,925 403 8
Share in net earnings of associates and a joint
venture 6,808 5,014 1,794 36
Interest income 417 460 (43) (9)
Other income - net 1,652 1,184 468 40
Provision for income tax 4,158 1,825 2,333 128
Company 11,456 9,546 1,910 20
Other comprehensive loss 1,468 (355) 1,823 >100
Total comprehensive income attributable to
owners of the Parent Company 12,917 9,220 3,697 40
Core income 12,106 10,346 1,760 17
Non-recurring income (expense) (650) (800) (150) (19)
Revenues
The Companys revenues increased by 20% to P =44,820 million in 2016, reflecting improved
performance of all the Companys major operating segments. Water posted a 6% increase in revenues
on the strength of 4% billed volume growth and inflationary tariff increase of 4.2% in June 2015 and
0.8% in January 2016 in Maynilad together with contributions from operating subsidiaries of
MPWIC. MPTC posted 23% higher revenues due to the SCTEX takeover and combined impact of
growth on all roads and better vehicle mix at CAVITEX (R1 Extension). Revenues in Healthcare also
increased by 19% driven by the contribution from SHHM and MVMC and increased number of out-
patients served across all hospitals. LRMC and Logistics contributed 8% and 1% of the total operating
revenue growth, respectively.
40
Cost of Sales and Services
Cost of sales and services increased by 31% to P
=18,370 million in 2016 due to:
=
P 1,851 million pertaining to the operations of LRMC. LRMC took over the operation of the
LRT-1 on September 12, 2015 and only started generating revenues and incurring related
costs from that date.
=
P 1,120 million from the operations of SCTEX. SCTEX was officially turned over to NLEX
Corp on October 27, 2015. Included in the cost of sales and services is the BCDA fees
amounting to P=791 million amounting to 50% of the Audited Gross Toll Revenues of
SCTEX.
=
P 322 million pertaining to the operations of MMI. On May 19, 2016, MMI completed the
purchase of businesses and assets (including certain contracts) of Basic Logistics Inc.,
A1Move Logistics, Inc., Philflash Logistics, Inc. and BasicLog Trade and Marketing
Enterprises, all of which are involved in the logistics business.
=
P 362 million increase in amortization of service concession asset. Service concession assets
for the water and toll businesses are amortized based on the units-of-production method.
Growth in the traffic and volume of water billed contributed to the increase in amortization
cost.
=
P 663 million increase in cost of sales and services for the Hospital business. With the
increase in hospital revenues driven by the increase in out-patients served, there was
corresponding increase in the related costs.
General and administrative expenses

General and administrative expenses increased by 13% to P =9,062 million in 2016 due to costs
incurred from the full year operations of LRMC and SCTEX and costs incurred by newly acquired
businesses (hospital and logistics business acquisitions). Personnel expense also grew in line with
annual salary increases and expanded headcount.
Interest expense
Interest expense increased by 8% to P
=5,328 million in 2016 in line with the increase in long-term
debt. Consolidated long-term debt increased by 10.8% to P=97,016 million (see Note 19 Long-term
Debt to the 2016 Audited Consolidated Financial Statements).
Share in net earnings of associates and a joint venture

Increase in share in the net earnings of associates and joint ventures in 2016 is due substantially to the
increased effective ownership in MERALCO and investment in GBPC. MPICs period-end
ownership in MERALCO increased from 32.5% in 2015 to 41.2% in 2016. On May 27, 2016, BPHI,
acquired an aggregate 56% of the ordinary and issued share capital of GBPC giving MPIC effective
ownership in GBPC at 47.8% (42.0% through BPHI and 5.8% through MERALCO).
The new investment in GBPC, increased effective ownership in MERALCO and the reduced debt at
Beacon Electric combined to increase total equity in net earnings in Beacon Electric and MERALCO
to P =3,974 million in 2015 (see Note 11 Investments and Advances of
=5,804 million in 2016 from P
the attached 2016 Audited Consolidated Financial Statements).
Other income and expenses

Other income (net of other expenses) increased to P
=1,652 million with lower provisions and higher
dividend income from Beacon Electrics Preferred shares in 2016 as compared with 2015. In 2016
41
and 2015, the Parent Companys dividend income from Beacon Electrics preferred shares amounted
to P
=1,215 million and P
=405 million, respectively.
Provision for income tax

Provision for income tax increased significantly to P
=4,158 million in 2016 compared with the P =1,825
million net provision for income tax in 2015. The significant increase is attributable to Maynilads
Income Tax Holiday expiring at the end of 2015. Maynilads (consolidated level) provision for
income tax amounted to P =3,250 million in 2016 as compared with only P =67 million in 2015.
Consolidated net income attributable to equity holders of the Parent Company

The 20% increase in the net income attributable to equity holders of MPIC from P =9,546 million in
2015 to P
=11,456 million in 2016 is attributable mainly to the strong growth in profit contribution of
the major businesses:
increase in effective ownership in MERALCO, higher preferred dividend income from
Beacon Electric, contribution from GBPC and reduced debt at Beacon Electric;
strong traffic growth on all the roads held by MPTC and contribution from SCTEX;
increase in the hospitals patients served and contributions from SHHMI and MVMC; and
contribution from LRMC.
Other comprehensive Income - net

The Company recognized net comprehensive income of P =1,468 million in 2016 as compared with the
net comprehensive loss of P
=355 million in 2015. Year 2016 includes higher share in actuarial
valuation adjustment from MERALCO and cumulative translation adjustment from DMT and
MERALCO.
Core Income attributable to equity holders of the Parent Company

Despite decrease in the water segments contribution from P
=4,819 million in 2015 to P
=3,564 million
in 2016 mainly due to higher income tax expense (see discussion above), MPICs share in the
consolidated core income increased by 17% from P =10,346 million in 2015 to P
=12,106 million in 2016
primarily reflecting the following:
59% increase in contribution from Beacon Electric and MERALCO from P =4,543 million in
2015 to P
=7,229 million in 2016 due to increased effective ownership in MERALCO, new
investment in GBPC, higher preferred dividends from Beacon Electric and reduced debt at
Beacon Electric.
24% increase in contribution from Toll road operations from P

=2,828 million in 2015 to
=3,517 million in 2016 due to strong traffic growth on NLEX, CAVITEX and DMT; and
P
contributions from SCTEX.
25% increase in contribution from Healthcare group from P =473 million in 2015 to
=589 million in 2016 due to full year contribution from investment in MDH and increased
P
ownership in RMCI, earnings from newly acquired hospitals (SHHM and MVMC), and
increases in number of enrollees in Riverside College and patients served across all hospitals.
Full year 2016 earnings contribution from LRMC amounting to P =273 million from merely
=41 million in 2015 (4 months of operations from take-over date of September 12, 2015).
P
Logistics initial contribution amounting to P

=43 million.
Beacon Electric and MERALCO, Maynilad, MPTC, Healthcare and Rail accounted for 49%, 23%,
23%, 4% and 1%, respectively, of MPICs share of operating income.
42
Non-recurring expenses
The Company posted net non-recurring expense of P =650 million in 2016 as compared with P=800
million in 2015. Non-recurring expense amounted to 650 million substantially comprising project
expenses and our share in the impairment loss recognized by MERALCO on its investment in
PacificLight Power Pte Ltd (PacificLight), a Singapore-based power generator and electricity
retailer.
II - Operating Segments of the Group
Water
Maynilad Water Services, Inc. 2016 2015 Increase (Decrease)

Audited Amount %
(in Php Millions)
Consolidated Statements of Income
Revenues 20,224 19,098 1,126 6
Costs and Expenses 8,258 7,181 1,077 15
Interest expense - net 1,691 1,848 (157) (8)
Other expense - net 159 452 (293) (65)
Provision for income tax 2,918 66 2,852 >100
Core Income 7,171 9,683 (2,512) (26)
Non-recurring expense (423) (132) 291 >100
Reported Net Income 6,748 9,551 (2,803) (29)
Core EBITDA 14,403 13,896 507 4
Core EBITDA margin 71% 73% -2% (3)
Capital Expenditure 10,130 8,005 2,125 27
Key Performance Indicators Increase (Decrease)

2016 2015 Amount %
Volume of water supplied (MCM) 711.5 698.0 13.5 2
Volume of water billed (MCM) 498.6 481.5 17.1 4
Volume of water billed (MCM) - Consolidated 511.9 493.9 18.0 4
Non revenue water % (average) 29.9% 31.0% -1.1% (4)
Non revenue water % (period end) 30.6% 29.3% 1.3% 4
Billed customers (period end) 1,312,223 1,265,625 46,598 4
Customer mix (% based on billed volume)
Domestic (residential and semi-business) 81.1% 80.6% 0.5% 1
Non-domestic (commercial and industrial) 18.9% 19.4% -0.5% (3)
Operational highlights
MAYNILAD
Maynilad achieved a 4% increase in volume sold in its concession area in 2016. The number of
water connections (or billed customers) rose 4% to 1,312,223 at the end of December 2016 from
1,265,625 in December 2015.
43
Non-Revenue Water (NRW) increased slightly to 30.6% as at the end of December 2016 from
29.3% in 2015 reflecting reduced water production in anticipation of El Nino last year. Just nine
years ago, when MPIC first invested in Maynilad, NRW was at a staggering 68% and millions of
customers had inadequate access to water. Just in 2016, Maynilad repaired 27,936 pipe leaks across
its concession area, making possible the recovery of some 10 MLD (million liters per day) of water
for its customers.
Maynilad installed 62 kilometers of water pipes in the period, expanding its distribution line to 7,637
kilometers. Drinking water supply and sewerage coverage were increased to 100% and 13% of its
population, respectively, while maintaining 24-hour service and average water pressure of over 7 psi
at 100%.
Maynilad cleaned a total of 96,594 septic tanks from around 175,045 households in 2016, a 53%
increase from 2015. This enabled the company to collect and treat over 168,047 cubic meters of
septage, in line with its goal of protecting the environment and supporting public health. Sewerage
and sanitation service coverage ratios as of end of December 2016 are at 12.7% and 49.2%,
respectively.
Capital expenditure in 2016 amounted to P =9.5 billion and funded one new waste water treatment
facility and pumping station, fourteen reservoirs and two water pressure boosters. For 2017,
Maynilad will allot P
=13.2 billion for its water and wastewater infrastructure projects; P=5.0 billion for
sewerage and sanitation programs and P =8.2 billion for water sources and water loss recovery.
Consolidated billed volume for Maynilad and its subsidiary Philhydro rose 4% to 511.9 MCM from
493.9 MCM.
The matter of the Maynilad tariff implementation remains unresolved as does the related claim on
the Republic of the Philippines:
In 2014, Maynilad received a favorable award in the arbitration of its 2013-2017 water tariff
which centered on Corporate Income Taxes being a recoverable expense. The MWSS has still
not implemented the awarded tariff increase while indicating they will await clarification from
the Supreme Court of the Philippines before proceeding.
Acting in formal accordance with the provisions of its concession, Maynilad has notified the
Republic of the Philippines (Republic) that it is calling on the Republics written undertaking
to compensate Maynilad for losses arising from delayed implementation of the new tariff. On
March 27, 2015, Maynilad served a Notice of Arbitration against the Republic. Hearings on the
arbitration completed in December 2016 and we imminently expect resolution in our favor.
Securing compensation and implementation of the tariff adjustment will result in sufficient resources
to fund the spending needed to meet agreed-upon service obligations.
MPWIC
MPWIC continues to expand its wastewater services and water supply projects outside Metro
Manila.
Water projects:
The challenge period for the Cagayan de Oro 100 MLD bulk water supply project was
concluded in January 2017 with no competing bidder. MPWIC expects to be awarded the project
in the first quarter of 2017. This network currently serves a population of more than 749,000
people with over 88,000 active service connections.
44
Laguna Water District Aquatech Resources Corporation commenced operation and management
of the distribution network of the Laguna Water District on 1st January 2016. A year after taking-
over the distribution operations, NRW averaging 27% pre-take over was reduced to 23% and
service connection coverage increased to 53% from 52%.
MIBWSC, a joint venture with the Metro Iloilo Water District (MIWD), commenced operation
on July 5, 2016. MIBWSC holds the joint venture project for the supply of up to 170 MLD of
bulk treated water to MIWD. Since commencement of operations, MIBWSC successfully
increased production volume to 44 MLD as of end-December 2016 from pre-take over
production of 38 MLD.
To date, MPWICs operating water projects collectively provide 150 MLD of water in Cebu, Laguna
and Iloilo.
Wastewater project:
In June 2016, MPWIC completed the acquisition of a controlling stake in Eco-System Technologies
International, Inc. (ESTII), a leading commercial wastewater specialist. This acquisition allows
MPIC to diversify its water sector investment holdings and invest in the high-growth wastewater
EPC and O&M market. As of end-December 2016, the company has 109 recurring contracts for the
operation and maintenance of sewerage treatment plant (STP) facilities and 115 on-going STP
construction projects.
Currently these projects are small relative to Maynilad but MPIC believes there is enormous
opportunity in bringing the groups expertise in clean water distribution and wastewater treatment to
those communities outside Metro Manila that lack these basic services.
Revenues
Increase
Audited Amount %
(in Php Millions)
Water Services 16,311 15,336 975 6
Sewer Services 3,508 3,367 141 4
Other Contract & Services 404 395 9 2
Total Revenues 20,224 19,098 1,126 6
Total revenues for the year rose 6% to P=20,224 million from P=19,098 million in 2015 due to the
combined effect of the increase in billed volume and inflationary tariff increases. Consolidated billed
volume for Maynilad and its subsidiary PHI was up by 4% to 511.9 MCM. Percentage increases in the
components of Maynilads revenues are set out above.
Costs and Expenses

Costs and expenses grew by 15% from P =7,181 million to P
=8,258 million due to higher personnel cost
and amortization of service concession. Increase of 9% in personnel cost was driven by headcount
growth and salary adjustments. Amortization of the concession asset increased due to additional
capital expenditures and increased billed volume due to Maynilads use of unit-of-production as its
method of amortization.
45
Core income
Maynilads Core Income decreased by 26% to P =7,171 million in 2016 from P=9,683 million last year
largely due to higher income tax driven by the expiration of Maynilads Income Tax Holiday in
December 2015.
Non-recurring income (expense)

Non-recurring expense in 2016 was significantly higher than last year with the impact of the
remeasurement of the deferred tax asset using OSD. In previous years, Maynilad measured deferred
tax using the itemized deduction method based on conditions existing at the time of issuance of the
financial statements. Maynilad made a review of its income tax position with the income tax holiday
expiring and concluded that OSD approach was likely to be optimal in most years. Based on review
of projected gross margin and net income, the applicable tax rate for the expected recovery and
settlement of the deferred taxes is at the effective tax rate of 18% using OSD, for most years in future.
The tax remeasurement resulted to a reduction in the deferred tax asset amounting to P
=324 million,
recognize as non-recurring expense.
Reported Net Income

The decrease in Reported Net Income by 29% is slightly higher than the decrease in Core Income of
26% (as discussed above) with Maynilad recognizing higher non-recurring expenses.
Toll Roads
Increase
Metro Pacific Tollways Corporation Audited Amount %
(in Php Millions)
Net toll revenues 11,902 9,691 2,211 23
Cost of Services 4,816 3,818 998 26
Operating expenses 1,391 1,155 236 20
Interest income (expense) - net (1,106) (1,232) (126) (10)
Share in earnings of an associate 606 476 130 27
Other income (expense) - net 335 388 (53) (14)
Provision for income tax 1,251 1,274 (23) (2)
Core Income 3,276 2,571 705 27
Reported net income 4,088 3,073 1,015 33
Reported net income attributable to equity
holders of MPTC 3,103 2,280 823 36
Core EBITDA 7,625 6,582 1,043 16
Core EBITDA margin 64% 68% -4% (6)
46
Increase
Key Performance Indicators (Decrease)
2016 2015 Amount %
Average Daily Vehicle Entries - NLEX 220,064 201,722 18,342 9
Average Daily Vehicle Entries - SCTEX 45,200 38,620 6,580 17
Average Daily Vehicle Entries - CAVITEX 128,137 119,477 8,660 7
Average Daily Vehicle Entries - DMT 96,265 85,886 10,379 12
Average Daily Vehicle Entries - CII B&R 48,915 46,566 2,349 5
MPTC recorded Core Net Income of P
=3.3 billion in 2016, 27% higher than the P
=2.6 billion recorded
a year earlier.
The growth in core income was a function of surging traffic growth, cost controls, and first full-year
contributions from SCTEX. The continuing expansion and development of major road networks in
northern Luzon added to the increase in traffic along NLEX-SCTEX. Average daily entries for 2016
rose 9% on the NLEX, 17% on the SCTEX and 18% on the R1 Extension of CAVITEX compared
with 2015 levels.
Outside the Philippines, the investment in Thailand is performing well. Contribution from DMT rose
to P
=425 million compared with P =323 million in 2015 on 12% traffic growth due to lower fuel prices
and higher passenger volumes at the Don Muang Airport.
Average daily vehicle entries for all three of the Companys domestic tollways system (NLEX,
CAVITEX and SCTEX) totaled 405,805; DMT adds a further 96,265 a day; and CII B&R 48,915 a
day bringing the overall total traffic on our roads to 550,985 vehicles on average every day.
In the Philippines, MPTCs new projects are gaining traction:
The P
=19.0 billion construction of the CALAX is set to start early this year with expected
completion by 2020. MPTC was awarded the 35-year CALAX concession in 2015.
The groundbreaking ceremony for the CCLEX was held on March 2, 2017. CCLEX, with
project cost of P
=27.9 billion is one of the biggest infrastructure projects outside Metro
Manila. The construction of this 8.25-km toll road connecting Cebu City to Mactan Island
via Cordova is expected to complete by 2020.
The Concession agreement for the Connector Project was signed in November 2016. The
Connector Project, with an estimated project cost of P
=21.8 billion, is an 8-km elevated toll
expressway over the right of way of the Philippine National Railways starting at the junction
of the North Luzon Expressway (NLEX) Segment 10 at C-3 Road/5th Avenue in Caloocan
City, and seamlessly connecting to the South Luzon Expressway (SLEX) through the Metro
Manila Skyway Stage 3 Project in the City of Manila. Once completed, the NLEX-SLEX
Connector Road Project will decongest Metro Manila traffic and provide better access to
seaports and airports. Construction is expected to commence in 2018 and to complete by
2021.
For existing roads NLEX, SCTEX and CAVITEX, service is focused on meeting traffic growth with
further expansion.
47
The construction work on Segments 2 and 3 of the NLEX Road-Widening Project (with project cost
of P
=2.6 billion) is substantially complete while construction continues on Segment 10 of the NLEX
Harbour Link (costing P =10.5 billion). Segment 10, a 5.6-km elevated expressway running from
Valenzuela City all the way to C3 in Caloocan City is expected to be completed by the first quarter
of 2018.
Construction for the first phase of the C5 Link Expressway is set to start by the first quarter of this
year and be completed by 2020. C5 Link Expressway, which is part of the existing CAVITEX
network, is a P
=12.7 billion project spanning 7.7 kilometers to link C-5 Road in Taguig to R-1
(Coastal) Expressway.
On October 25, 2016, the Board of Directors of NLEX Corp and TMC approved the merger between
NLEX Corp and TMC. NLEX Corp as the surviving corporation will acquire all respective rights,
businesses, assets and other properties of TMC as well as all of its debts and liabilities. The merger
is expected to be completed by the third quarter of this year.
Under the previous Government administration, sizeable pending tariff adjustments accumulated on
all our toll roads through successive failures to raise tariffs. On the NLEX these now amount to 20%
for the Open System and 32% for the Closed System; on the CAVITEX they amount to 25% on R1
and 42% on the R1 Extension; and on the SCTEX they amount to 48%. These accumulated tariff
adjustments now represent a material shortfall to the cash flow of MPTC and are constraining our
ability to finance road construction necessary for continued economic growth.
MPTCs various road construction projects will cost approximately P =125 billion over the next few
years. It is therefore imperative that overdue tariff increases be implemented and we are in dialogue
with the new Administration on how to implement these.
Net Toll Revenues

Net toll revenues amounted to P
=11,902 million, 23% higher year-on-year, mainly due to the full year
contribution from SCTEX and traffic volume growth in 2016. Average daily traffic grew by 9%, 17%
and 7% along NLEX, SCTEX and CAVITEX, respectively.
Costs of services and Operating expenses

Total cost and expenses in 2016 grew by 25% to P=6,207million. SCTEX contributed 23% out of the
total increase in costs which included BCDA fees amounting to P =791 million. PNCC fees also
=531 million from last years P
increased to P =482 million as a result of higher NLEX toll revenues.
Operators fee increased to P

=2,001 million, up by 15% compared with last year due to higher fees
related to SCTEXs O&M.
Amortization of concession asset increased in line with the increase in average daily vehicle entries
and from additional capital expenditures during the period. Increase in advertising expense was
driven by tourism related campaigns.
Core income
Core income increased by 27% to P
=3,276 million mainly due to the strong traffic growth and new
contributions from SCTEX and CII B&R.

Non-recurring expense primarily relates to various project costs.
48
Reported Net income attributable to equity holders of MPTC
Growth in Reported Net income is higher than growth in Core Income with MPTC recognizing higher
non-recurring expenses in 2015 as compared with 2016.
Power - MERALCO
Increase
MERALCO Audited Amount %
(in Php Millions)
Revenues 257,181 258,399 (1,218) (0)
Expenses 231,473 234,991 (3,518) (1)
Core Income 19,583 18,887 696 4
Reported net income attributable to equity holders
of MERALCO 19,193 19,098 95 0
Capital Expenditure 11,422 11,304 118 1
Increase
2016 2015 Amount %
Volume Sold (in mln kwh) 40,142 37,124 3,018 8
System Loss (12-month moving average) 6.35% 6.47% -0.12% (2)
Average Distribution Revenue per kWh YTD 1.42 1.49 (0.07) (4)
MERALCOs Core Net Income for 2016 rose 4% to P =19.6 billion mainly due to an 8% increase in
electricity consumption and higher interest income. The benefit from increased volume was partially
offset by lower distribution tariffs, the absence of the generation and transmission recoveries
recorded in 2015 and losses at PacificLight.
The growth in energy sales was driven by strong demand from all customer classes, particularly
residential, warmer weather during the first four months of the year and high electricity consumption
during the national elections in May.
Notwithstanding the increase in energy sales, total revenues declined slightly to P

=257.2 billion
primarily due to lower pass-through generation and other charges owing to significantly lower fuel
prices, higher availability of MERALCOs contracted power plants and competitively negotiated
Power Supply Agreements (PSA). This is good for consumers.
MERALCO spent P =11.4 billion on capex in 2016 to address critical loading of existing facilities and
to accommodate growth in demand and customer connections. MERALCO surpassed the previous
years operating performance for system loss achieving a record best of 6.4% at the end of
December 2016, 2.1 percentage points lower than the regulatory cap set by the ERC of 8.5%. This
continuous effort to reduce system loss translates to P
=26.9 billion cumulative savings to consumers
since 2008.
49
MERALCO through MERALCO PowerGen Corporation (MGen) continues to increase the scope of
its power projects:
Redondo Peninsula Energy, Inc. (RP Energy), a joint venture of MGen, Therma Luzon, Inc.,
and Taiwan Cogeneration International Corporation, is awaiting ERC approval of the PSA
with MERALCO covering a substantial portion of its first 300 MW capacity coal-fired
power plant. The power plant site is ready for construction activities and expected
completion by 2020.
San Buenaventura Power Limited (SBPL), a joint venture between MGen and Thailands
New Growth B.V., is developing a 455 MW (net) supercritical coal-fired power plant in
Mauban, Quezon. Construction is proceeding as scheduled with commercial operation due
in the first half of 2019. Its full capacity is contracted under an ERC approved PSA.
Atimonan One Energy Corporation is awaiting review and approval of its PSA from the
ERC for it to issue a Notice to Proceed for the EPC for its 2x600 MW coal-fired plant in
Atimonan, Quezon. The PSA for the entire capacity was contracted by MERALCO.
MGen has signed joint venture agreements for the St. Raphael 2x350 MW (net) pulverized
coal-fired plant with Semirara Mining and Power Corporation and the 4x132 MW Mariveles
Power Generation Corporation coal-fired plant with San Miguel Energy Corporation. These
ventures are supported by Power Purchase Agreements from MERALCO which are
currently pending ERC approval.
Revenues
Consolidated revenues during 2016 were slightly lower at P =257.2 billion compared with the P =258.4
billion in 2015. Consolidated electric revenues represents 97% or P
=249.2 billion of total revenues.
Generation charges billed to MERALCOs customers averaged at P =3.98 per kWh in 2016, or 12%
lower than P=4.54 per kWh in 2015. Transmission charges were at P =0.85 per kWh or 2% lower than
last year. MERALCOs distribution rate was P =1.42 per kWh, 4% lower than the average in 2015.
Expenses
Purchased power cost, the biggest component of MERALCOs expenses, represents to the cost of
electricity supply. MERALCO does not operate its own generation capacity in the Philippines at
present (but is investing to do so in future) and purchases all of the power that it distributes from the
NPC and its Successor Generating Companies, the Wholesale Electricity Spot Market and
Independent Power Producers.
Net income
MERALCOs net income increased by 5.8% to P =19,189 million for the year ended December 31,
2015 from P =18,131 million in 2014. MERALCOs net income attributable to equity holders of parent
company increased by 5.8% to P =19,098 million for the year ended December 31, 2015 from P =18,053
million in 2014. These results reflect the 5.6% growth in energy sales, resulting from higher energy
sales and customer count.
50
Power - GBPC
Increase
GBPC Audited Amount %
(in Php Millions)
Revenue 17,637 18,481 (844) (5)
EBITDA Core 8,597 8,291 306 4
Core Income 2,843 2,903 (60) (2)
Reported Net Income attributable to
equity holders of GBPC 2,644 2,950 (306) (10)
Post-acquisition Core Income 1,939 - 1,939 >100
Increase
2016 2015 Amount %
Electricity Sold (consolidated; GWh) 3,646 3,637 9 0
Bilateral Generation 3,214 3,174 40 1
Bilateral WESM 250 313 (63) (20)
WESM Spot Sales 182 150 32 21
*Acquired 42% effective interest on May 27, 2016
GBPCs revenues for the year ended December 31, 2016 comprising energy fees and fuel pass-
through costs, declined from P=18,481 million in 2015 to P
=17,637 million in 2016. Revenues
decreased mainly due to lower power market prices, lower fuel and other pass through costs. The
volume of power sold in 2016 amounted to 3,646 GWH, at par with last years due to grid capacity
constraints in the Visayas preventing full dispatch.
Core EBITDA of 2016 improved by 4% from 2015 due to lower purchased power expenses with
higher plant availability. In 2016, CEDC had lower downtime days due to forced outages caused by
various tube leaks due to improved maintenance regimes. However, despite improvement in Core
EBITDA, Core Income is lower in 2016 as compared with 2015 due to higher depreciation and
interest expense.
Since acquisition, GBPCs contribution to the core income of MPIC amounted to P

=489 million, net of
acquisition financing costs.
51
Healthcare
Increase
Healthcare Group Audited Amount %
(in Php Millions)
Gross Revenues 19,641 15,273 4,368 29
Expenses 15,508 12,267 3,241 26
Core EBITDA 4,315 3,415 900 26
Core Income 1,756 1,309 447 34
Reported Net Income 1,759 1,244 515 41
Increase
2016 2015 Amount %
Occupancy rate (%) - Standard Beds 69% 63% 6% 10
Total beds available 2,839 2,210 629 28
No. of Patients In patient 160,581 127,441 33,140 26
No. of Patients Out patient 2,702,996 2,009,526 693,470 35
No. of Accredited Doctors 7,420 5,869 1,551 26
No. of Enrollees (schools) - average YTD 5,836 4,938 898 18
MPHHI saw aggregate Core Net Income surge 34% to P =1.8 billion in 2016 compared with the same
period last year. Of the increase in core net income, 19% is attributable to the contribution from new
hospital acquisitions in 2016 while 15% is through organic growth driven by lower interest expense,
cost savings from purchasing synergies and increasing patient revenues across the companys
existing hospitals.
New hospital acquisitions in 2016 MDH (20% interest acquired on December 28, 2015), SHHM
(51% equity shareholding beginning March 7, 2016), MVMC (93% equity shareholding starting July
29, 2016) contributed P
=253 million to the increase in core income.
The Hospital groups contribution to MPICs core net income grew 27% to P
=646 million in 2016
from P
=503 million in 2015.
On January 31, 2017, MPHHI infused approximately P =133.5 million of cash into Delgado Clinic Inc.
(DCI), owner and operator of the JDMH via a subscription to preferred shares representing
approximately 65% of the total expanded capital stock of DCI. The cash infusion from MPHHI will
enable the 68-year-old JDMH to upgrade its equipment and facilities to improve its ability to serve
its community.
52
Rail
Increase
Rail Audited Amount %
(in Php Millions)
Farebox revenues 3,016 897 2,119 >100
Expenses 2,394 812 1,582 >100
Core EBITDA 734 109 625 >100
Core Income (loss) 505 80 425 >100
Reported Net Income (loss ) 511 87 424 >100
Increase
2016 2015 Amount %
Average daily ridership 409,412 389,478 19,934 5
Available LRV (period end) 100 87 13 15
LRMC has operated the LRT Line 1 (LRT-1), since September 12, 2015 when it has successfully
restored 23 Light Rail Vehicles (LRVs) bringing the total available to 100 by end of December 2016.
LRMC served an average daily ridership of 409,412 in 2016, an improvement of 5% from the
average daily ridership of 389,478 recorded in 2015 when LRMC first took over operations. In 2016,
the highest recorded daily ridership is approximately 527,000.
LRMC is on track with its rail replacement project. It has finished 45% of the work to replace 32-
year old tracks. The rail replacement project covers a total of 26 kilometers of rail tracks, that when
completed, will enable the reinstatement of a train running speed of 60 kph to shorten journey times
and thereby increase capacity.
LRMC recently inaugurated the improved Doroteo Jose Station which will serve a daily average of
27,000 passengers interconnecting to LRT-2. This station is the pilot for the companys P=500-
million Station Improvement Project, which includes all 20 passenger stations of the existing LRT-1
system.
LRMC is also ready for increased demand that will result from the Common Station Project which
was signed on January 18, 2017 by the Department of Transportation (DOTr), the Department of
Public Works and Highways and relevant rail and mall operators. Subsequent to this signing of the
agreement, questions have arisen about the cost allocation for this project between the Government
and the private sector. To improve the commuting experience for the public, LRMC has proposed a
low cost temporary walk-way connecting LRT-1 and MRT-3 to be used while the cost allocation
matter is being resolved.
LRMC contributed P =278 million to MPICs Core Income in 2016 reflecting increased ridership as a
result of the rehabilitation of LRVs together with operating cost savings and deferred capex spending,
some of which are due to governments delay in the acquisition of rights of way. Moving forward, the
combination of pending tariff adjustments partly offset by an increasing cost base as operations
expand to Cavite, will see profits normalize.
53
MPIC Consolidated Statement of Financial Position
Assets
The following table summarizes the individual increase (decrease) of consolidated asset accounts.
Increase
Audited Audited (Decrease)
2016 % 2015 % Amount %
(in Php Millions)
ASSETS
Current assets
Cash and cash equivalents and short-term
deposits 19,469 61 23,936 66 (4,467) (19)
Restricted cash 2,432 8 2,414 7 18 1
Receivables 5,171 16 4,441 12 730 16
Due from related parties 92 137 (45) (33)
Other current assets 4,636 15 3,938 11 698 18
31,800 100 34,866 96 (3,066) (9)
Asset held for sale 1,480 4 (1,480) (100)
31,800 100 36,346 100 (4,546) (13)
Noncurrent Assets
Restricted cash 889 889
Receivables 56 145 (89) (61)
Available for sale financial assets 1,859 1 2,018 1 (159) (8)
Investments and advances 126,556 40 96,202 36 30,354 32
Goodwill 21,004 7 18,308 7 2,696 15
Service concession assets 152,693 47 135,760 52 16,933 12
Property use rights 554 596 (42) (7)
Property and equipment 10,480 3 8,016 3 2,464 31
Other noncurrent assets 5,711 2 3,900 1 1,811 46
319,802 100 265,834 100 53,968 20
Cash and cash equivalents and short-term deposits (Decrease) The decrease is attributable to
(i) MPIC fully settling the amount due to Beacon Electric for the acquisition of MERALCO
shares in 2015; (ii) MPIC paying out higher dividends in 2016 as compared with 2015; and (iii)
higher dividends paid out by NLEX Corp to their non-controlling shareholders. See Liquidity
and Capital Resources for the summary of the Groups audited statements of cash flows for the
year ended 2016 and 2016.
Receivables current portion and non-current portions (Increase) Beginning 2016, trade
receivables included receivables arising from the following services: (i) O&M and EPC
construction services with the business of ESTII; and (ii) logistics services, with MPICs first
venture into the logistics business through MMI.
54
Other current assets (Increase) Increase is attributable to the increases in advances to
contractors and consultants (increased by P
=410.0 million substantially coming from Maynilad and
LRMC) and Input VAT (increased by P =355 million primarily attributable to NLEX Corp).
Investments and advances (Increase) Increase is mainly attributable to (i) acquisition of 25% of
Beacon Electric common and preferred shares from PCEV and subscription of P =3.5 billion to new
Beacon Electric preferred shares, and (ii) recognition of shares in net earnings for 2016, net of
dividends received from the investees (see Note 11 - Investments and Advances to the 2016
Goodwill (Increase) Goodwill arising from (i) MMIs acquisition of logistics assets; (ii)
MPWICs acquisition of new subsidiary, ESTII and (iii) MPHHIs acquisition of new subsidiary,
MVMC (see Note 12 - Recoverability of Goodwill and Service Concession Assets not yet
Available for Use to the 2016 Audited Consolidated Financial Statements).
Service concession assets (Increase) Mainly due to the additional capital expenditures that
included: (i) Maynilads costs of rehabilitation works and additional construction; (ii) civil works
construction in the NLEX; (iii) SCTEX rehabilitation cost; (iv) present value of periodic payment
to be made to DPWH in relation to the Connector Project; and (v) costs of rehabilitation works,
acquisition of rails for the existing LRT-1 system (see Note 13 - Service Concession Assets to the
Other noncurrent assets (Increase) Increase is attributable to recognition of intangible asset

arising from business combination accounting. A total of P =1.2 billion intangible assets were
recognized as a result of acquisition accounting. In addition, LRMC recognized deferred
financing costs amounting to P=441 million from the P =24 billion facility in which P=657 million
was drawn out of the total facility. This increase in intangible assets is partially offset by the
decrease in deferred tax assets of Maynilads OSD election (see Note 15 - Other Noncurrent
Assets to the 2016 Consolidated Financial Statements).
55
Liabilities and Equity
The following table summarizes the individual increase (decrease) of consolidated liability and equity
accounts.
Increase
Audited Audited (Decrease)
2016 % 2015 % Amount %
(in Php millions)
Current Liabilities
Accounts payable and other current liabilities 14,965 56 14,757 44 208 1
Income tax payable 466 2 417 1 49 12
Due to related parties 1,713 6 8,550 25 (6,837) (80)
Current portion of:
Provisions 5,229 19 5,475 16 (246) (4)
Service concession fees payable 874 3 565 2 309 55
Long-term debts 3,797 14 4,149 12 (352) (8)
27,044 100 33,913 100 (6,869) (20)
Noncurrent Liabilities
Noncurrent portion of:
Provisions 239 263 (24) (9)
Service concession fees payable 28,000 21 25,188 21 2,812 11
Long-term debts 93,219 68 83,433 72 9,786 12
Due to related parties 6,726 5 6,726 100
Deferred tax liabilities 3,925 3 4,610 4 (685) (15)
Other long-term liabilities 4,368 3 3,996 3 372 9
136,477 100 117,490 100 18,987 16
Equity
Capital stock 31,619 21 27,935 23 3,684 13
Additional paid-in capital 68,438 45 49,980 42 18,458 37
Treasury Shares (167) (167) (100)
Equity reserves 6,282 4 6,248 5 34 1
Retained earnings 43,889 29 35,149 30 8,740 25
Other comprehensive income reserve 1,971 1 510 1,461 >100
Total equity attributable to owners of the
Parent Company 152,032 100 119,822 100 32,210 27
Non-controlling interest 36,049 30,955 5,094 16
Due to related parties current and noncurrent portions (Decrease) Current portion of the Due
to related parties account decreased with the full settlement of the amount due to Beacon Electric
for the acquisition of 10% MERALCO shares in April 2015. Non-current portion of the Due to
related parties account increased and comprises of the amount due to PCEV arising from MPICs
56
acquisition of additional 25% ownership in Beacon Electric (see Note 21 - Related Party
Transactions to the 2016 Consolidated Financial Statements).
Provisions current and noncurrent portions (Decrease) On August 9, 2016, NOHI was
released and discharged from the guarantees it extended to Ayala Land Inc. and Evergreen
Holdings, Inc. in relation to debt for asset swap arrangement it entered in prior years. NOHI
reversed a related provision in its books amounting to P=489 million.
Service concession fees payable current and noncurrent portions (Increase) Additions
included the present value of the service concession fee payable relating to the Connector Project
amounting to P=2.3 billion (see Note 18 - Service Concession Fees Payable to the 2016
Long-term debt current and noncurrent portions (Increase) The Group drew down loans to
support capital expenditures and investments during the year. See Note 19 - Long-term Debt to
the 2016 Consolidated Financial Statements for the details of the loans drawn in 2016.
Deferred tax liabilities (Decrease) Maynilad, with the expiration of its income tax holiday in
December 2015, opted to avail of the OSD for the taxable year 2016. The remeasurement
resulted in the reduction of both the acquisition accounting deferred tax liability and Maynilads
deferred tax asset.
Capital stock and Additional paid-in capital (Increase) Increase in these accounts was due to the
proceeds from (i) GTCHIs subscription to 3.6 billion new common shares of MPIC in May 2016;
(ii) ESOP exercised in 2016; and (iii) MPICs issuance of Class A Voting Shares to MPHI for a
=41.3 million (see Note 22 Equity to the 2016 Audited Consolidated
total consideration of P
Retained earnings (Increase) Attributable to the net income earned for the period, net of
dividends declared in 2016.
Other comprehensive income (OCI) reserves (Increase) Mainly due to share in the OCI of the
equity investees: (i) cumulative translation adjustment from DMT, which functional currency is
the Thai Baht and (ii) actuarial gain of MERALCO.
Non-controlling interest (NCI) (Increase) Increase coming from (i) NCIs share in the net
earnings in majority owned subsidiaries, net of dividends received by them; (ii) NCIs equity
contribution in majority owned subsidiaries, and (iii) NCI recognized in the acquisition of ESTII
and MMI (see Note 22 Equity to the 2016 Audited Consolidated Financial Statements).
57
Liquidity and Capital Resources
The following table shows a summary of the Groups audited statements of cash flows for the years
ended 2016 and 2015 as well as the consolidated capitalization as at December 31, 2016 and 2015:
Increase
Audited (Decrease)
2016 2015 Amount %
(in Php Millions)
Cash Flows
Net cash provided by operating activities 18,918 18,544 374 2
Net cash used in investing activities (37,115) (47,907) (10,792) (23)
Net cash provided by financing activities 17,183 28,107 (10,924) 39
Net increase in cash and cash equivalents (1,014) (1,256) 242 (19)
Capital expenditures 20,293 23,016 (2,723) (12)
Capitalization
Long-term debt net of current portion 93,219 83,433 9,786 12
Current portion of long-term debt 3,797 4,149 (352) (8)
Total 97,016 87,582 9,434 11
Non-controlling interest 36,049 30,955 5,094 16
Total equity attributable to owners of the Parent
Company 152,032 119,822 32,210 27
Cash and cash equivalents 15,455 16,469 (1,014) (6)

Short-term deposits 4,014 7,467 (3,453) (46)
As at December 31, 2016, MPICs consolidated cash and cash equivalents and short-term investments
totaled P
=19,469 million, a decrease of P
=4,467 million from P
=23,936 million as at December 31, 2015.
Operating Activities
MPICs consolidated net operating cash flow in 2016 posted a 2% increase from P
=18,544 million to
=18,918 million with the improvement in operating income dampened by the increase in income tax
P
paid mainly driven by Maynilads income tax holiday expiration in 2015.
A large portion of the Groups cash flow from operating activities is generated by the water utility
which accounted for 45% and 51% of the Groups total revenues in 2016 and 2015, respectively.
Revenues from the toll roads business accounted for 27% in 2016 and 26% in 2015. Hospitals
accounted for 20% in 2016 and 2015. Rail segment contributed 7% and 3% in 2016 and 2015,
respectively. Logistic business making its first contribution of 1% of the total revenues in 2016.
Investing activities
Net cash used in investing activities amounted to P
=37,115 million. Below are the significant
investments during 2016:
Acquisition of additional 25% in Beacon Electric On May 30, 2016, MPIC acquired an
additional 25% of Beacon Electric common and preferred shares from PCEV for an aggregate
consideration of P
=26 billion, bringing effective ownership in Beacon Electric to 75%. MPIC
58
settled P
=17 billion out of the P
=26 billion amount due to PCEV with the remaining balance due
over four years.
Acquisition of the Logistics Business MPIC through MMI acquired logistics businesses and
contracts for a total consideration of P
=2.2 billion.
Acquisition of Subsidiaries. MPWIC acquired 65% of the outstanding capital stock of ESTII
for a total consideration of P
=1.8 billion.
Capital expenditures. The Groups capital expenditures amounted to P =20,293 million during
2016, compared with P =23,016 million in 2015. Capital expenditures for 2016 comprised
additions to service concession assets of Maynilad, MIBWSC and MPTC and continuous
improvements for the Hospitals. See Note 13 - Service Concession Assets to the 2016
Audited Consolidated Financial Statements for the additions to the service concession assets.
Financing Activities
The Companys consolidated net cash inflow from financing activities was P =17,183 million in 2016.
Cash from financing activities decreased in 2016 as compared with 2015. The decrease is attributable
to the following activities. (i) MPIC fully settled the amount due from Beacon Electric for the
acquisition of MERALCO shares in 2015; (ii) MPIC paid out higher dividends in 2016 as compared
to 2015; and (iii) higher dividends paid out by NLEX Corp to its non-controlling shareholders.
Other major financing activities for the year included the following:
Proceeds from long-term debt. Proceeds from long-term debt during the year amounted to
=13.4 billion. See Note 19 Long-term debt to the 2016 Audited Consolidated Financial
P
Statements
Subscription of GTCHI. MPIC entered into a Share Subscription Agreement with GTCHI for
the subscription by GTCHI of 3.6 billion common shares in MPIC for a total consideration of
=22 billion (see Note 22 - Equity to the 2016 Audited Consolidated Financial Statements).
P
Aside from scheduled payment of debt (including interest) and service concession fees of Maynilad,
below are the significant financing activities made during the period:
Dividends Paid to owners of the Parent Company. the BOD approved the declaration of the
following cash dividends:
Rate per Common

Preferred Dividends Record Date Payable Date
Share
P
=0.061 P2.5 million
= 3/30/2016 4/21/2016
P
=0.032 =2.5 million
P 9/1/2016 9/26/2016
Dividends Paid to non-controlling shareholders. Dividends paid to non-controlling

shareholders amounted to P =2,050 million, significant portion of which is attributable to share
in the dividends of the non-controlling shareholders of NLEX Corp and MWHCI.
59
Comparison of Other Financial Years
2015 versus 2014
Increase
Audited Amount %
(in Php Millions)
Cost of Sales and Services 14,026 13,082 944 7
General and administrative expenses 8,047 6,823 1,224 18
Share in net earnings of associates and a joint
venture 5,014 3,167 1,847 58
Interest income 460 385 75 19
Other income - net 1,184 604 580 96
Provision for income tax 1,825 1,208 617 51
Company 9,546 7,940 1,606 20
Other comprehensive loss (355) (76) 279 >100
Total comprehensive income attributable to
owners of the Parent Company 9,220 7,849 1,371 17
Core income 10,346 8,508 1,838 22
Non-recurring income (expense) (800) (568) 232 41
Revenues
performance of the Companys major operating subsidiaries, Maynilad and MPTC plus contribution
from LRMC. Maynilad posted a 4% increase in revenues brought about by 4% billed volume growth
coupled with 4% inflationary tariff increase in the middle of 2015. MPTC likewise posted 12% higher
revenues mainly due to 9% and 8% higher average daily vehicle entries in NLEX and CAVITEX,
respectively. Hospital revenues also increased by 11% mainly driven by increasing number of patients
served at CVHMC and AHI. LRMC contributed P =897 million farebox revenues since September 12,
2015.

Cost of sales and services increased by 7% to P=14,026 million in 2015 due mainly to:
P =477.7 million pertains to the operations of LRMC. LRMC took over the operation of the
LRT 1 on September 12, 2015 and only started generating revenue and incurring related costs
from that date.
P =186.0 million is attributable to the operation of SCTEX. SCTEX was officially turned over
to NLEX Corp on October 27, 2015. Included in the cost of sales and services is the BCDA
fees amounting P =132.1 million. Under the SCTEX concession agreement, NLEX Corp shall
pay BCDA monthly concession fees amounting to 50% of the Audited Gross Toll Revenues
of SCTEX for the relevant month from take-over date to October 30, 2043.
P =359.0 million comes from the increase in amortization of the service concession assets.
Amortization expense increased in relation to the increase in volume sold in Maynilad and
60
traffic volume growth in Tollroads which both uses the UOP method in amortizing its service
concession asset.

General and administrative expenses increased by 18% to P
=8,047 million in 2015 due to increases in
personnel costs and professional fees driven by LRMCs take-over the operation of LRT-1 beginning
September 12, 2015. Annual salary increases and expanded headcount caused further increase in
personnel cost. Advertising and promotion increased as NLEX Corp increase its aggressiveness in
promoting tourism in NLEX.
Interest expense
Interest expense increased by 15% to P =4,925 million in 2015 mainly due to the following:
Increase in long-term debt for loans drawn in 2015. Total increase in interest expense from
long-term debt amounted to P=488.0 million. Not included in the interest expense are
capitalized borrowing costs from loans amounting to P =669.3 million.
Increase of P =285.0 million substantially arising from the accounting interest accretion on the
amount due to Beacon Electric amounting.

Increase in MPICs share in the cumulative net earnings of associates and joint venture in 2015 is due
substantially to the increased effective ownership in MERALCO by 7.5% (2.5% in July 2014 and
additional 5.0% beginning April 2015). The increase in MPICs effective ownership in MERALCO,
the reduced debt at Beacon Electric and the underlying growth at MERALCO, combined to increase
total equity in net earnings in MERALCO and Beacon Electric from P =2,567 million in 2014 to P
=3,974
million in 2015.
The Groups foreign investments in the toll segments also contributed to the increase in the equity in
net earnings:
P =174.0 million of contribution from CII B&R which was acquired in March 2015.
P =268.0 million of increased contribution from DMT due to the combined effect of the
increase in ownership interest (from 7.36% to 29.45% beginning July 2014) and improvement
in traffic.
Interest income
Interest income increased by 19% to P
=460 million in 2015 mainly due to a higher level of placements
with the proceeds from MPIC equity raising undertaken in February 2015.

Other income (net of other expenses) increased to P
=1,184 million with lower provisions and higher
dividend income in 2015 as compared with 2014.

Provision for income tax increased by 51% to P =1,825 million from prior years provision of
=1,208 million. Of the total increase, P
P =362 million came from increase in current provision while
=255 million from increase deferred tax provision. The increase in current provision is in line with
P
the increase in Core EBITDA while the increase in deferred tax provision is attributable to the
reversal of deferred tax asset substantially coming from Maynilad as it approaches the start of a
taxable regime. Maynilads income tax holiday ends December 2015.

The 20% increase from P =7,940 million to P
=9,546 million for the year is attributable mainly to the
strong growth in profit contribution of the major businesses:
increase in Maynilads contribution due mainly to higher billed volume and tariff;
61
increase in effective ownership in MERALCO, MERALCOs own growth and lower
financing cost at Beacon Electric;
increased traffic volume for NLEX and CAVITEX and increased shareholding in NLEX
Corp and DMT; and
increased number of patients served by our hospitals.
Other comprehensive loss

The Company recognized other comprehensive loss of P =355 million in 2015 as compared with the
=76 million in 2014. 2015 includes higher share in cumulative translation adjustment from DMT and
P
MERALCO.

MPICs share in the consolidated core income increased by 22% from P
=10,346 million in 2015 mainly reflecting the following:
P
10% increase in contribution from Maynilad from P=4,376 million in 2014 to P

=4,819 million in
2015 mainly due to increased billed volume and lower personnel costs.
26% increase in contribution from Toll Roads segment from P =2,239 million in 2014 to
=2,828 million in 2015 due to increased shareholdings in NLEX Corp, strong traffic growth
P
on both NLEX and CAVITEX and increase in contribution from DMT driven by 40%
increase in net income and increased effective ownership from 7.4% beginning July 2014 to
29.5% in 2015.
50% increase in contribution from Beacon Electric/MERALCO from P =3,027 million in 2014
to P
=4,543 million in 2015 due to the combined impact of higher core income and increased
effective ownership in MERALCO and reduced debt at Beacon Electric.
2% increase in contribution from Healthcare group from P=465 million in 2014 to

=473 million in 2015. The slow growth was driven by the lower effective ownership with the
P
entry of GIC as investor in MPHHI starting July 2014 largely offsetting strong organic
growth.
These represent MPICs share in the stand-alone core income of the operating companies, net of
consolidation adjustments.
Maynilad, Beacon Electric/ MERALCO, MPTC/DMT and Healthcare accounted for 38%, 36%, 22%
and 4%, respectively of MPICs share of operating income.
Non-recurring expenses amounted to P =800 million of charges, substantially comprising transaction
costs relating to the increased shareholding in MERALCO and project expenses, compared with
=568 million in 2014 which included taxes incurred on the reorganization of the hospital group and
P
one-time separation expense as a result of Maynilads manpower efficiency program.
62
Water
Maynilad Water Services, Inc. 2015 2014 Increase (Decrease)

Audited Amount %
(in Php Millions)
Revenues 19,098 18,363 735 4
Costs and Expenses 7,181 7,414 (233) (3)
Interest expense - net (1,848) (2,082) (234) (11)
Other expense - net (452) (640) (188) (29)
Benefit from (Provision for) income tax (66) 28 (94) (336)
Core Income 9,683 8,777 906 10
Non-recurring expense (132) (522) (390) (75)
Reported Net Income 9,551 8,255 1,296 16
Core EBITDA 13,896 12,857 1,039 8
Core EBITDA margin 73% 70% 3% 4

2015 2014 Amount %
Volume of water supplied (MCM) 698.0 701.0 (3.0) (0)
Non revenue water % (average) 31.0% 33.9% -2.9% (9)
Non revenue water % (period end) 29.3% 32.9% -3.6% (11)
Non-domestic (commercial and industrial) 19.4% 19.9% -0.5% (2)
Maynilad, the biggest water utility in the Philippines, achieved a 4% increase in volume of water sold
in its concession area for 2015. The number of water connections (or billed customers) rose 6% to
1,265,625 by the end of 2015 from 1,190,062 in 2014.
Non-Revenue Water (NRW) fell to 29.3% as at the end of December 2015 from 32.9% in 2014 as the
billed volume grew faster than the marginal increase in water supply. This was the first time that
Maynilad has breached the 30% NRW watermark; Maynilad anticipates that NRW will continue to
diminish, albeit more gradually than before. Just eight years ago, when MPIC first invested in
Maynilad, NRW was at a staggering 68% and millions of customers had inadequate water supply or
even none. Since the start of 2015, Maynilad has repaired 27,435 pipe leaks across its concession
area, making possible the recovery of some 57.7 MLD of water for the use of its customers.
Maynilad was able to install 113 kilometers of water pipes in 2015, expanding its distribution line to
7,571 kilometers. Maynilad will allocate P
=13.6 billion in 2016 for its water and wastewater
63
infrastructure projects. More than half of 2016 capital expenditure, or P
=7.6 billion, will be allocated to
water infrastructure projects and the NRW reduction program. The remainder will be allocated to
wastewater management projects in Central Manila, Cavite, Quezon City and Valenzuela.
Total revenues for 2015 rose 4% to P=19.1 billion from P =18.4 billion in 2014 due to the higher billed
volume and an inflationary increase in tariff on July 1, 2015. Strong cost controls combined with
increased volumes lifted Core Net Income by 10% to P =9.7 billion from P=8.8 billion. By contrast,
Reported Net Income was up 15% to P =9.5 billion from P =8.3 billion in 2014 when it was held back by
one-time separation expenses as a result of a redundancy program.
Consolidated billed volume for Maynilad and its subsidiary PHI increased by 4% to 493.9 million
cubic meters (MCM).
Maynilads arbitration saga continues with the Government non-compliance to-date with Maynilads
arbitration decision. On December 29, 2014, Maynilad received a favorable award in its arbitration of
its 2013-2017 water tariff which the MWSS continues to ignore. Acting in formal accordance with the
provisions of its concession, Maynilad has notified the Republic of the Philippines that it is calling on
the Republics written undertaking to compensate Maynilad for losses arising from delayed
implementation of the new tariff. This was ignored, too, so on March 27, 2015 Maynilad served a
Notice of Arbitration against the Republic. In the fourth quarter of 2015, the Arbitration Tribunal was
constituted. On February 17, 2016, Maynilad again wrote the Republic, through the DOF, to reiterate
its demand against the Undertaking and to update its claim in the amount of P =5.6 billion.
Notwithstanding this struggle to receive its due, Maynilad remains committed to providing clean and
safe water to its customers. Capital expenditure for 2015 stood at P=8.0 billion, of which a significant
portion is for the upgrade and construction of reservoirs and pumping stations, laying of primary
pipelines and construction of wastewater facilities. Three new wastewater treatment plants became
operational in 2015, bringing Maynilads total number of operational wastewater treatment plants to
19, treating up to 541,000 cubic meters per day of sewage for the sake of public health. Maynilad is
building a further seven (7) wastewater treatment facilities and conveyance systems with combined
project cost of P
=15.1 billion that will treat up to 269,000 cubic meters per day of sewage and a further
140,250 cubic meters per day of septage.
MPIC continues to expand its water business outside Metro Manila through its wholly-owned
subsidiary, MPWIC:
On September 29, 2015, the consortium of MPWIC and EPCC through EHI, received Notice
of Award for the bulk supply of water together with operation and management of the
distribution network of the LWD covering the municipalities of Los Banos, Bay, and
Calauan. MPWIC owns 30% of the consortium. Operations and maintenance of the water
supply system with projected capacity of up to 50 MLD of water, commenced on
January 1, 2016.
On December 16, 2015, MPWIC completed the acquisition of 1.96 million common shares
representing 49% ownership of WBSI. WBSI was granted the joint venture contract for the
Maragondon Bulk Water Supply Project in 2011. The project covers the development and
construction of new bulk water facilities with an aggregate capacity of up to 200 MLD of
water.
On November 20, 2015, MPWIC was awarded the Bulk Water Supply Project in Iloilo. The
joint venture between MPWIC and Metro Iloilo Water District will rehabilitate, build, and
operate up to 170 MLD of bulk water treatment facilities in Iloilo Province.
Together, these three (3) projects will contribute a total of 420 MLD of water in addition to
Maynilads 2015 billed volume of 1,319 MLD of water.
64
Revenues
Increase
Audited Amount %
(in Php Millions)
Water Services 15,336 14,645 691 5
Sewer Services 3,367 3,294 73 2
Other Contract & Services 395 424 (29) (7)
Total Revenues 19,098 18,363 735 4
combined effect of the increase in billed volume and inflationary tariff increase. Consolidated billed
volume for Maynilad and its subsidiary PHI was up by 4% to 493.9 MCM. Percentage increases in the
components of Maynilads revenues are set out above.
Costs and Expenses

Despite the increase in revenues, costs and expenses decreased by 3% from P =7,414 million to P
=7,181
million due to savings in personnel cost, utilities and repairs and maintenance. Also contributing to
the decrease in costs and expenses is the reversal of provision for doubtful accounts driven by
improved collection performance.
Personnel costs, one of Maynilads largest cost elements declined 9% to P

=1,848 million from
=2,029 million in 2014, which included P
P =263 million for the Special Opportunity Program (SOP) that
reduced headcount by 326 employees beginning July 2014. The reduction in headcount translates to
efficiencies as ratio of employees per 1,000 connections improved to 1.7 compared with 1.9 before
the program. Utilities decreased due to lower average power rates obtained from retail electricity
contracts. Repairs and maintenance dropped 22% in line with lower leak repairs.
These savings were dampened by the increase in amortization of concession asset due to additional
capital expenditures and increase in billed volume. The service concession asset of Maynilad is
amortized on a unit of production basis which movement is consistent with the growth in billed
volume.
Core income
Maynilads core income increased by 10% to P =9,683 million in 2015 from P
=8,777 million last year
due to revenue growth with the increased billed volume and lower personnel cost.

Non-recurring items in 2015 were significantly lower than 2014 as 2014 included separation expense
from Maynilads SOP. The SOP is a redundancy and right-sizing program aimed at improving
operational efficiency.
Reported Net Income

The increase in Reported Net Income by 16% is higher than the growth in Core Income of 10% with
Maynilad recognizing lower non -recurring expenses in 2015 (as discussed above).
65
Toll Roads
Increase
(in Php Millions)
Net toll revenues 9,691 8,641 1,050 12
Operating expenses 1,109 819 290 35
Interest income (expense) - net (1,232) (1,114) 118 11
Other income (expense) - net 388 270 118 44
Provision for income tax 1,274 952 322 34
Core Income 2,571 2,154 417 19
Non-recurring income (expense) (291) (92) 199 >100
Reported net income 3,073 2,779 294 11
Reported net income attributable to equity
holders of MPTC 2,280 2,062 218 11
Core EBITDA 6,582 5,788 794 14
Capital Expenditure 6,588 2,592 3,996 >100
Increase
2015 2014 Amount %
Average Daily Vehicle Entries - SCTEX 35,510 32,018 3,492 11
Average Kilometers Travelled - NLEX 3,958,628 3,505,833 452,795 13
Average Daily Vehicle Entries - DMT/CII B&R 132,452 124,102 8,350 7
MPTCs Core Net Income of P =2.6 billion for 2015 was 19% higher than the P =2.2 billion recorded in
2014 as a result of strong traffic growth, the full-year impact of its increased shareholding in the
NLEX and contribution from SCTEX and CII B&R. Average daily entries rose 9% on the NLEX
and 8% on the CAVITEX from a year earlier.
MPTC increased its shareholding in NLEX Corp through a 3.9% direct acquisition for P =1.5 billion in
January 2014 and an additional effective shareholding of 4.6% for P
=1.7 billion in July 2014.
Philippines:
Segment 9 of the NLEX Harbour Link was opened to the public on March 19, 2015 while
construction continues on Segment 10. Segment 9, with a project cost of P=1.6 billion, is a highway
spanning 2.42 kilometers linking the 86.7-kilometer NLEX to the MacArthur Highway in
Valenzuela City. Segment 10 with a project cost of P
=10.5 billion will run from Valenzuela City all
the way to C3 in Caloocan City by its expected completion date in the first half of 2017.
66
Construction of NLEX Corps P =2.6 billion Segment 2 and 3 NLEX Road-Widening Project to
accommodate growing traffic numbers is expected to start in the second quarter of this year. The
project will expand the existing two-lane portion of NLEX between Sta. Rita and San Fernando to
three lanes on both the northbound and southbound sides, while the current one-lane stretch between
Dau and Sta. Ines will be expanded to two lanes in each direction.
Conditional Notice to Proceed with the construction of the C5 Link Expressway has been issued by
the TRB. The C-5 Link Expressway, part of the existing CAVITEX network, is a P =10 billion project
spanning 7.6 kilometers to link C-5 Road in Taguig to R-1 (Coastal) Expressway. Construction is
expected to start in 2016 upon approval of the final engineering design.
On February 9, 2015, NLEX Corp received the Notice of Award from the BCDA for the
management, operation and maintenance of the 94-kilometer SCTEX following the results of the
Price Challenge held on January 30, 2015, nearly five years after NLEX Corp was originally
awarded management of the highway. At a consideration of P =3.5 billion upfront cash payment, the
management, operation and maintenance of the SCTEX was officially turned over to NLEX Corp on
October 27, 2015, significantly behind schedule owing to regulatory delay.
On July 10, 2015, MPCALA Holdings, Inc. (MPCALA), a subsidiary of MPTC, signed a
Concession Agreement for the CALAX Project with the DPWH. Under the agreement, MPCALA is
granted the concession to design, finance, construct, operate and maintain the CALAX, including the
right to collect toll fees, over a 35-year concession period. The CALAX is a closed-system tolled
expressway connecting CAVITEX and SLEX. The CALAX Project was awarded to MPCALA
following a competitive public bidding process where MPCALA was declared the highest
complying bidder with its offer to pay concession fees amounting to P=27.3 billion.
In December 2015, MPTC received a Notice of Award from both the City of Cebu and the
Municipality of Cordova for the financing, design, construction, implementation, operation and
maintenance of an 8.3 kilometer tollroad known as the Cebu-Cordova Bridge Project, linking the
island of Mactan to mainland Cebu through the Municipality of Cordova. The estimated construction
and financing costs for this is P
=27.9 billion project will be sourced from a combination of local bank
loans and equity. The construction of the project is targeted to start in 2017 and is estimated to be
completed by 2020.
With regard to NLEX Corps proposal to build an elevated expressway to connect the Northern and
Southern toll road systems (the Connector project), Swiss challenge is expected to be conducted
by March 2016, with NLEX Corp having the right to match the highest bid. The project was
originally proposed in 2010.
Under the current regulatory environment, sizeable pending tariff adjustments have accumulated for
NLEX and CAVITEX through successive failures to raise tariffs since 2012 and are constraining
MPTCs ability to finance road construction necessary for continued economic growth. On August
26, 2015, MPTCs companies filed notice with the TRB and DOTC demanding settlement of past
due tariff increases. The period to reach an amicable settlement has expired. NLEX Corp and
CAVITEX may thereafter pursue compensation through an arbitration tribunal for the overdue tariff
increase for NLEX (an increase of 15%) and for CAVITEX (an increase of 25% for R1 and 16% for
R1 Extension) in accordance with their respective toll operation agreements.
The expansions of NLEX and CAVITEX, construction of CALAX and Cebu-Cordova Bridge as
well as the integration of the SCTEX will cost approximately P =115 billion over the next few years. It
is therefore imperative that overdue tariff increases be implemented to enable these projects to be
appropriately funded.
67
Thailand:
Contribution from the DMT for 2015 rose to P =302 million compared with P
This was driven by: (i) 6% traffic growth; (ii) increased shareholding in DMT to 29.45% compared
with 7.36% a year earlier; and (iii) toll rate increases of 17% and 20% on its Original road and
Northern extension, respectively, on December 22, 2014.
DMT and various Thai Government Ministries are appealing to the Supreme Administrative Court
the decision of the Central Administrative Court on August 18, 2015, voiding the Cabinets approval
that set DMTs original tariffs; a positive resolution is expected.
Vietnam:
MPTC further expanded its regional footprint through an equity investment and financing
transaction with CII of Vietnam. The total investment of P
=4.1 billion effectively provides MPTC a
44.9% minority equity interest in CII B&R. CII B&R has various road and bridge projects in and
around Ho Chi Minh City and its current portfolio includes 68.1 kilometers of roads operating at
approximately 47,000 vehicles per day and roads under pre- or on-going construction covering a
total of 53 kilometers.
Total Vehicles; Total Income

Average daily vehicle entries for all three (3) of our domestic Tollways system (NLEX, CAVITEX,
SCTEX) totaled 367,712; DMT adds a further 85,886 a day; and CII B&R 46,566 a day bringing the
overall total traffic on our roads to 500,000 vehicles per day.
In terms of profitability, aggregate Core Net Income at, the level, and across all, of our Tollways
operating companies in domestic and international reached the equivalent of P =5.4 billion in 2015.
Net Toll Revenues

=9,691 million, 12% higher year-on-year, mainly due to traffic volume
growth in 2015 plus 2 months revenue from SCTEX since turnover date of October 27, 2015.
Average daily traffic grew by 7% and 8% along NLEX and CAVITEX, respectively.

Total cost and expenses increased by 8% to P =4,973 million from P =4,352 million mainly due to 7%
higher toll operation and maintenance costs. Amortization of service concession assets increased in
line with the increase in average daily vehicle entries and from additional capital expenditure during
the year. Increase in advertising expense was driven by the aggressive tourism related advertisements
and campaigns.
Also contributing to the increase in costs of services are the costs incurred for the operations of
SCTEX. SCTEX was officially turned over to NLEX Corp on October 27, 2015. Included in the cost
of sales and services is the BCDA fees amounting P =132.1 million. Under the SCTEX concession
agreement, NLEX Corp shall pay BCDA monthly concession fees amounting to 50% of the Audited
Gross Toll Revenues of SCTEX for the relevant month from take-over date to October 30, 2043.
Core income
Core income increased by 19% to P =2,571 million mainly due to the increased shareholding in NLEX
Corp by 4.6% in July 2014, traffic growth in NLEX and CAVITEX plus contribution from CII B&R
and SCTEX.

Non-recurring expense in 2015 mainly includes deferred tax adjustment and various project
expenses.
68
Growth in Reported Net income is slower than growth in Core Income with MPTC recognizing higher
non-recurring expenses in 2015 as compared with 2014.
Power
2015 2014 Increase (Decrease)

Manila Electric Company Audited Amount %
(in Php Millions)
Revenues 258,399 266,336 (7,937) (3)
Expenses 234,991 240,190 (5,199) (2)
Core Income 18,887 18,128 759 4
of MERALCO 19,098 18,053 1,045 6
Capital Expenditure 11,304 12,582 (1,278) (10)

2015 2014 Amount %
System Loss (12-month moving average) 6.47% 6.49% -0.02% (0)
MERALCOs Core Net Income for 2015 rose 4% to P =18.9 billion compared with 2014 despite lower
distribution tariffs on the strength of a 6% increase in energy sales to 37,124 gigawatt hours (GWh),
higher contributions to Net Income from non-regulated operating subsidiaries and strict management
of operating expenses.
Core Net Income also included the positive impact of MERALCOs compensation for previous net
under-recoveries and carrying costs approved earlier by the ERC.
The rise in MERALCOs consolidated sales volume was largely attributable to strong demand by all
customer classes and a 4% rise in new customer connections to 5.8 million by the end of 2015.
Revenues declined 3% to P =258.4 billion due to the combined effects of: (i) the lower average
distribution tariff; (ii) net lower pass-through generation and other charges as a result of significantly
lower fuel prices and competitively negotiated Power Supply Agreements; and (iii) loss of
contestable supply revenues to other retail electricity suppliers. The implementation of MERALCOs
4th Regulatory Period interim Maximum Average Price of P =1.3810 per kWh beginning July 1, 2015
reduced the average distribution charge for 2015 to P =1.49 per kWh.
Capital expenditures, substantially comprising of electric capital projects, amounted to P

=11.2 billion
for 2015. MERALCO's capex commitment continues to deliver strong returns: the 12-month moving
average system loss fell to just 6.5% at the end of December 2015, 2 percentage points lower than
the regulatory cap of 8.5%.
69
MERALCO through MGen achieved major milestones for its power projects in 2015:
RP Energy, a joint venture of MGen, Therma Luzon, Inc., and Taiwan Cogeneration
International Corporation, continues to work with the National Grid Corporation of the
Philippines for the transmission line requirements of the plant. RP Energy expects to start
construction of its 2 x 300 MW CFB coal-fired power plant this year, six years after the
project was announced.
SBPL, a joint venture between MGen and Thailands New Growth B.V., is developing a 455
MW (net) supercritical coal-fired power plant in Mauban, Quezon. In May 2015, SBPL
secured the ERC approval for its power supply agreement with MERALCO, allowing SBPL
to sell the electricity generated by the plant to the distribution utility. In November 2015,
SBPL signed a P =42.15 billion omnibus loan agreement to fund the project. It is the countrys
biggest all-peso project finance facility to date. Commercial operations are expected to start
in 2019.
Atimonan One Energy, Inc., a wholly owned subsidiary of MGEN, is developing a

supercritical coal-fired power plant in Atimonan, Quezon. Site preparation for the two 600
MW power generation project will begin in the fourth quarter of 2016, aiming to achieve
initial operations by late 2020.
Global Business Power Corporation, in which MERALCO has a 22% interest, operates a
total of 709 MW of dispatchable capacity with another 1 x 150 MW CFB coal-fired power
plant under construction in Iloilo City through Panay Energy Development Corporation.
Commercial operations of the plant are expected in the third quarter of 2016.
The increase in MPICs effective ownership in MERALCO in April 2015 from 27.48% to 32.48%,
the reduced debt at Beacon and the underlying growth at MERALCO, combined to increase this
segments contribution to MPIC for the period by 50% to P
=4.5 billion from P
=3.0 billion.
Revenues
Revenues from electricity represent MERALCOs and Clark Electrics sales of electricity, which
include generation, transmission, distribution charges, taxes and subsidies. MERALCO and Clark
Electric distribute electricity to industrial, commercial and residential customers. For the year ended
December 31, 2015, revenues from electricity sales of P =249,773 million made up 96.7 percent of the
total revenues of MERALCO and declined by 4.6 percent from P =261,740 million in 2014. The
decrease in revenues was attributable to (i) the pronounced drop in fuel prices in the second half of
2015, (ii) the switch of captive sales volume to RES players and (iii) MERALCOs implementation of
the lower distribution rate effective July 2015.
Total energy sold for the year ended December 31, 2015 was 37,124 GigaWatt-hours (GWh) or 5.6
percent higher than the 35,160 GWh in 2014. Sales to industrial customers increased by 3.4 percent
to 11,216 GWh, which is largely attributable to the food and beverage, basic metals and rubber and
plastic products industries. Energy sold to commercial customers registered an increase of 6.1 percent
to 14,654 GWh in 2015. Sales to residential customers increased by 7.3 percent to 11,121 GWh in
2015.
Billed customers steadily grew, with 209 thousand new customers representing an increase of 3.8% to
almost 5.8 million as at December 31, 2015. Residential customers, while consuming 30.0% of the
total energy sold, account for 91.6% of the total 5.8 million customers. Commercial customers
totaling 474 thousand, account for 39.5% of the total energy sold. Approximately 10 thousand
industrial customers account for 30.2% of total energy sold.
70
Generation charge remains the single largest component of the MERALCO bill accounting for 54.3%
of the customer bill in 2015. Transmission charge was at 10.5%, taxes, universal charge and subsidies
were at 12.2%, system loss charge was at 4.5% while distribution charge remained at the 18.1% level.
MERALCO continues to reap the benefits of its institutionalized system loss management programs
resulting in further improvements in performance. The 12-month moving average system loss rate in
2015 was 6.47%, surpassing the record rate of 6.49% in 2014. With the system loss rate below the
regulatory cap of 8.5 percent, a total of P
=4.5 Billion savings in 2015 or a cumulative P
=22.1 billion
over the last 8 years, have been realized and passed on to the customers. Clark Electrics system loss
rate is at 4.16%.
Revenues from sale of services and others pertain mostly to the revenues generated by (i) MERALCO
Industrial Engineering Services Corporation (MIESCOR) Group, which completed several local EPC,
civil works and electro-mechanical engineering projects with revenues amounting to Pesos 5.4 billion,
62% higher compared with 2014; (ii) CIS Bayad Center, Inc. (Bayad Center), whose bills payment
transactions handled grew to 77 million or 12% more than 2014, from a total of 200 billers during the
year, and which ventured into spot billing in 2015 by acquiring the major player in that space; (iii)
MERALCO Energy, Inc. (MServ), whose strategic load-side outsourcing contracts and energy
efficiency services more than doubled to Pesos 2.1 billion compared with 2014; and (iv) Radius
Telecoms, Inc. (Radius) whose fiber-based data connectivity and internet services (offered to
enterprise, channels, and carrier clients) grew over 25% in 2015.
Expenses
Purchased power cost, the biggest component of MERALCOs expenses, pertains to the cost of
electricity supply. MERALCO does not operate its own generation capacity and purchases all of the
power that it distributes from the NPC and its Successor Generating Companies, the Wholesale
Electricity Spot Market and Independent Power Producers.
Net income
MERALCOs net income increased by 5.8% to P =19,189 million for the year ended December 31,
2015 from P =18,131 million in 2014. MERALCOs net income attributable to equity holders of parent
company increased by 5.8% to P =19,098 million for the year ended December 31, 2015 from P =18,053
million in 2014. These results reflect the 5.6% growth in energy sales, resulting from higher energy
sales and customer count.
71
Healthcare
Increase
(in Php Millions)
Gross Revenues 15,273 14,096 1,177 8
Expenses 12,267 11,382 885 8
Core EBITDA 3,415 2,946 469 16
Core Income 1,309 1,007 302 30
Reported Net Income 1,244 1,011 233 23
Increase
2015 2014 Amount %
Occupancy rate (%) - Standard Beds 63% 67% -4% (6)
No. of Accredited Doctors 5,869 5,367 502 9
Aggregate Core Net Income for the Hospital Group rose 30% to P =1.3 billion in 2015 compared with
2014 as a result of increasing patient revenues, gains from completed capital expenditure programs,
lower interest costs and savings from group synergy projects. Contribution to MPICs core net
income slightly increased from P =465 million in 2014 to P=473 million in 2015 reflecting dilution in
effective ownership with the entry of GIC as investor in MPHHI, the hospital investment arm of
MPIC.
On December 28, 2015, MPHHI completed its acquisition of a 20% equity shareholding in MMSI,
owner of MDH, from Metrobank Foundation Inc., the controlling shareholder of MMSI. MDH is a
300-bed tertiary hospital located in the City of Manila with annual revenues of approximately P =2.0
billion. It is in the midst of an expansion program where it is constructing a new 18-storey building
that will house new doctors clinics, patient rooms, outpatient diagnostic services, and additional
parking facilities. The new tower is projected to be finished towards the end of 2016, increasing
MDHs bed capacity to approximately 500 beds.
On December 16, 2015, MPHHI signed an Investment Agreement with SHHM, a 47-year-old Level
Two hospital, a respected institution in the capital city of Bulacan. MPHHI is investing P
=150 million
in SHHM for a 51% ownership, with proceeds funding an increase patient beds and the acquisition
of new medical equipment. MPHHI is expecting to complete the acquisition by first quarter of 2016.
Including both MDH and SHHM, MPHHI grew to eleven (11) hospitals with approximately 2,700
beds throughout the country six in Metro Manila (Makati Medical Center, Cardinal Santos Medical
Center, Our Lady of Lourdes Hospital, Asian Hospital, De Los Santos Medical Center, and Manila
Doctors Hospital) and five in the provinces (Davao Doctors Hospital, Riverside Medical Center in
Bacolod, Central Luzon Doctors Hospital in Tarlac, West Metro Medical Center in Zamboanga, and
Sacred Heart Hospital of Malolos in Bulacan). In addition, MPHHI has also invested in a mall-based
diagnostic and surgical center MegaClinic in SM Megamall, and has indirect ownership in two
healthcare colleges, Davao Doctors College and Riverside College Inc. in Bacolod.
72
Rail
Increase
Rail Audited Amount %
(in Php Millions)
Farebox revenues 897 897
Advertising and rental revenues 17 17
Expenses 812 14 798
Core Income (loss) 80 (9) 89
Reported Net Income (loss ) 87 (8) 95
Increase
2015 2014 Amount %
Average daily ridership 389,478 n/a 389,478
Stored value card (beepTM) usage:
LRT-1 38.0% n/a 38.0%
LRT2 61.1% n/a 61.1%
MRT3 56.7% n/a 56.7%
LRMC, in which MPIC holds an effective stake of 55%, is the operator of LRT Line 1 (LRT-1).
LRMC commenced operating LRT-1 on September 12, 2015 following the signing of a concession
agreement with the Philippine Government for the operation and maintenance of the existing 20.7-
kilometer system and the construction of the 11.7-kilometer Cavite Extension.
LRMC took over a train system that is severely deteriorated. It is the oldest train line in Metro
Manila and maintenance has been a challenge over recent years. Out of the 100 Light Rail Vehicles
(LRVs) committed to be delivered to LRMC upon take-over, only 77 were in safe running condition.
It will take time to fix the fleet and restore the system to optimal operating levels. Since the handover
of the LRT-1, LRMC has worked to prioritize baseline requirements for passenger convenience and
comfort. It has successfully restored 11 LRVs, bringing the total in operation to 88 by January 2016.
To improve the passenger experience, LRMC will gradually replace the rails of the 29-kilometer
track starting in April 2016 and aiming to finish by end-2017. LRMC aims to shorten journey times
and increase train frequencies with a speed increases to 60kph from the current 40kph by end of
2017. Rail replacement will result in less wear and tear on carriages, improved reliability and
increased life span of the whole LRT-1 system. Meanwhile, to enhance passenger safety and
comfort at the stations, all 32 elevators and escalators along LRT-1 will be repaired beginning March
2016. This will complement the two-year station improvement project already underway.
On February 11, 2016, LRMC signed a P =24 billion loan facility and the EPC agreement for the LRT-
1 Cavite Extension. These agreements mark significant milestones on the way towards the
construction of the long-awaited Cavite Extension. P=15.3 billion out of the P
=24 billion loan facility is
allocated for the Cavite Extension and the remaining P=8.7 billion for the rehabilitation of the existing
LRT-1 system.
AFPI, in which MPIC has a 20% shareholding, was granted the rights and obligations to design,
finance, construct, operate, and maintain the Automated Fare Collection System (AFCS) for LRT-1,
LRT2, and MRT3. Through a contactless payments card known as the beep card, AFPI
73
endeavors to create an integrated solution for Metro Manilas commuters with the card currently
available for use at LRT 1, LRT 2, and MRT3, and eventually in various public transport and retail
establishments. Full system acceptance was achieved on December 16, 2015. Approximately 1.3
million beep cards were sold as of December 2015 with the take up of the beepTM cards as at
December 31, 2015 at 61.1%, 56.7% and 38.0% respectively, for LRT2, MRT3 and LRT-1.
2014 versus 2013
Increase
Audited Amount %
(in Php Millions)
Cost of Sales and Services 13,082 11,845 1,237 10
General and administrative expenses 6,823 6,261 562 9
Share in net earnings of associates and a joint 3,167 2,286 881 39
venture
Interest income 385 462 (77) (17)
Provision for income tax 1,208 593 615 >100
Net income attributable to owners of the Parent 7,940 7,209 731 10
Company
Other comprehensive income (loss) (76) 384 (460) (>100)
Total comprehensive income attributable to owners 7,849 7,550 299 4
of the Parent Company
Core income 8,508 7,229 1,279 18
Non-recurring income (expense) (568) (20) (548) >100
Revenues
performance of the Companys major operating subsidiaries, Maynilad and MPTC. Maynilad posted
a 9% increase in revenues brought about by 4% billed volume growth coupled with 4% inflationary
increase in average effective tariff as a result of improved cash collections. MPTC likewise posted 6%
higher revenues mainly due to 7% and 8% higher average daily vehicle entries in NLEX and
CAVITEX, respectively. Hospital revenues also increased by 17% mainly driven by increasing
number of patients served at CVHMC and AHI and consolidation of full year results of DLSMC and
CLDH which were acquired during the 2nd half of 2013.

Cost of sales and services increased by 10% to P
=13,082 million in 2014. Salaries, wages and benefits
increased by 17% due to increase in headcount, inflationary increase in annual salary and full year
effect of the consolidation of DLSMC and CLDH. In addition, operators fee increased by 10% due to
the increase in base rate in accordance with Operation and Maintenance Agreement between NLEX
Corp and TMC. Amortization expense also increased in relation to the increase in volume sold in
Maynilad which uses the UOP method in amortizing its service concession asset.
74
General and administrative expenses increased by 9% to P =6,823 million in 2014 due to increases in
personnel costs, taxes & licenses and depreciation & amortization driven by full year consolidation
impact of DLSMC and CLDH. Annual salary increases and expanded headcount caused the increase
in personnel cost while continuing capital expenditure program caused the increase in depreciation
and amortization cost. Increase in professional fees is due to expenses incurred by Maynilad in
relation to the arbitration proceedings.
Interest expense
=4,301 million in 2014 mainly due to additional loans
Interest expense increased by 7% to P
(a) debt in AIF of THB2.1 billion which was used to partially fund the acquisition of additional
effective interest in DMT and (b) P
=3.3 billion in MPTC which was used to finance acquisition of the
additional 8.5% effective ownership in NLEX Corp.

Increase in MPICs share in the cumulative net earnings of associates and joint venture in 2014 due to
the increase ownership in MERALCO and DMT and increases in operational performance at
MERALCO, TMC, MDI and DDH.
Interest income
Interest income decreased by 17% to P
=385 million in 2014 mainly due to lower average level of
placements in 2014 as compared with 2013.

Other income (net of other expenses) increased by 9% to P
=604 million mainly due to the realized gain
on sale of AFS investment on February 28, 2014.

Provision for income tax increased by 104% to P =1,208 million from prior years provision of
=593 million. The increase in provision for income tax resulted from the decline in the deferred tax
P
benefit recognized by CIC and Maynilad. In 2013, CIC recognized P =201.1 million of deferred tax
benefit from its previously unrecognized benefit from NOLCO of P =670.3 million. Maynilad also
recognized consolidated deferred tax benefit of P =409.5 million in 2013 as compared with current
years benefit of only P
=30.7 million, resulting from the reversal of deferred tax asset arising from
application of IFRIC 12 accounting.

The 10% increase from P =7,209 million to P
=7,940 million for the period is attributable mainly to the
strong growth in profit contribution of the major businesses. In summary: increase in Maynilads
contribution due mainly to higher billed volume and tariff; increased traffic volume for NLEX and
CAVITEX; and increase in effective ownership in DMT and MERALCO. The increase was slightly
dampened by the dilution effect in hospital segment with the entry of GIC as minority investor.
Other comprehensive income (loss)

The Company recognized other comprehensive income of P =384 million in 2013 as compared with the
loss of P
=76 million recognized in 2014. The other comprehensive income in 2013 included
=199 million of unrealized gain from the remeasurement of Available for Sale Financial Assets (AFS)
P
which was recycled to profit or loss when the Company sold its investment in NEPSCC in 2014. The
Company also recognized higher actuarial gain from defined benefit plan of its subsidiaries and equity
method investees at an aggregate of P=506 million in 2013 as compared with current years aggregate
actuarial loss of P
75
MPICs share in the consolidated core income increased by 18% from P
=8,508 million in 2014 mainly reflecting the following:
P
15% increase in contribution from Maynilad from P =3,789 million in 2013 to P

=4,376 million in
2014 due to all-in effective tariff increase of 4% and increase in billed volume of 4%.
19% increase in contribution from Toll Roads segment from P =1,874 million in 2013 to
=2,239 million in 2014 due to strong traffic growth, increase in effective interest in NLEX
P
Corp and contribution from DMT.
30% increase in contribution from Beacon Electric/ MERALCO from P =2,333 million in 2013
to P=3,027 million in 2014 mainly due to the 2.5% increase in effective ownership in
MERALCO coupled with improvement in MERALCOs operating performance with higher
volume sold.
A 20% decrease in contribution from Healthcare group from P=581 million in 2013 to
=465 million in 2014 mainly due to lower effective ownership with the entry of GIC in July
P
2014.
These represent MPICs share in the stand-alone core income of the operating companies, net of
consolidation adjustments.
Maynilad, Beacon Electric/ MERALCO, MPTC/DMT and Healthcare accounted for 43%, 30%, 22%
and 5%, respectively of MPICs share of operating income.
Non-recurring expenses amounted to P =568 million and P
=20 million in 2014 and 2013, respectively.
Non-recurring expenses recognized in 2014 comprise of project expenses, taxes incurred on the
reorganization of the hospital group and one-time separation expenses and arbitration costs at
Maynilad.
76
Water
Increase
Maynilad Water Services, Inc. 2014 2013 (Decrease)
Audited Amount %
(in Php Millions)
Revenues 18,363 16,895 1,468 9
Costs and Expenses 7,414 7,147 267 4
Interest income (expense) - net (2,082) (2,480) (398) (16)
Other income (expense) - net (640) (739) (99) (13)
Benefit from (Provision for) income tax 28 407 (379) (93)
Core Income 8,777 7,530 1,247 17
Reported Net Income 8,255 6,936 1,319 19
Core EBITDA 12,857 11,083 1,774 16
Capital Expenditure 4,345 5,558 (1,213) (22)
Increase
2014 2013 Amount %
Volume of water supplied (MCM) 701.0 724.2 (23.2) (3)
Non revenue water % (average) 33.9% 38.7% (4.8%) (12)
Non revenue water % (period end) 32.9% 35.4% (2.5%) (7)
Non-domestic (commercial and industrial) 19.9% 20.3% (0.3%) (2)
Maynilad, the biggest water utility in the Philippines, achieved a 4% increase in the volume of water
sold in its concession area in 2014 even as it managed to draw 3% less water from the Angat Dam.
The number of water connections (or billed customers) rose 5% to 1,190,062 by the end of December
2014 from 1,129,497 a year earlier.
Selling more water while drawing less was made possible by reductions in leaks and theft, otherwise
known as Non-Revenue Water (NRW), which fell to 32.9% as at the end of December 2014 from
35.4% a year earlier. The improvement was achieved on the strength of Maynilads continuing pipe
replacement program, which saw 36,967 leaks repaired in 2014. It will be recalled that when MPIC
invested in Maynilad in 2007, NRW stood at 68%.
77
Maynilad now delivers 24-hour water supply to 99.89% of its customers, while 99.97% of customers
also receive water pressure of seven pounds per square inch - the minimum pressure necessary to
pump water upstairs from the ground floor. The year earlier percentages were 97.79% and 99.90%,
respectively.
Maynilads capital spending during 2014 stood at P =4.3 billion, down from P
=5.6 billion a year earlier
due to delays in the acquisition of land for building sewage treatment plants and delays in other
planned projects involving the rehabilitation or accelerated replacement of pipes affected by
Department of Public Works and Highways projects.
Maynilad committed rather than expended P =16.2 billion in new CAPEX projects in 2014. This
includes the construction of several sewage and septage treatment plants and conveyance systems in
Muntinlupa, Paranaque, Pasay, and Valenzuela:
In line with Maynilads commitment to improving public health in the West Zone,
P
=10.0 billion was allocated in setting up and rehabilitation of waste water system.
Maynilad is accelerating its wastewater projects to protect the health of its customers and
the environment and to meet its service obligations under the Concession Agreement term
extension plan.
Around P =4.2 billion was allocated for service expansion programs which includes
pipelaying of primary lines in Bacoor and Imus, Cavite and in Las Pias, Muntinlupa and
Pasay and construction; automation of boosters and reservoirs; and rehabiliation of
Maynilad's water network facilities, offices and warehouses.
P =2.0 billion was spent in NRW reduction program through pipe replacement projects,
metered management projects, establishment of smaller District Metered Areas, leak
repairs and diagnostic activities. This resulted in the recovery of over 117.4 million liters
per day of water.
The decision of the Appeals panel to settle Maynilads tariff dispute with the MWSS dated
December 29, 2014, upheld the alternative rebasing adjustment of Maynilad. This would, if
implemented immediately, result in a 9.8% increase in the 2013 average basic water charge of
=31.28/cu.m., inclusive of the P
P =1.00 Currency Exchange Rate Adjustment which the MWSS has now
incorporated into the basic charge (the Award). The Award translates to an average increase of
=3.06/cu.m. While there has been a two (2)-year delay in implementing an adjustment in the average
P
basic water charge - the Concession Agreement between MWSS and Maynilad expressly provides for
a one-time implementation of a positive rebasing adjustment - Maynilad is willing to implement the
increase on a staggered basis in order to mitigate the impact of the Award on its customers in the West
Zone of Metro Manila subject to approval of the MWSS.
The MWSS has not yet acted on the arbitration award and Maynilad has formally reminded them of
the indemnity undertaking of the Republic of the Philippines regarding delays in tariff
implementation.
MPICs wholly owned subsidiary, MetroPac Water Investments Corporation (MPWIC), which
effectively owns 19.9% in Cebu Manila Water Development, Inc. (CMWD) continues exploring
investment opportunities in water distribution. CMWD holds a 20-year concession for the bulk supply
of water to the Metropolitan Cebu Water District with the initial delivery of water made in January
2015.
78
Revenues
Increase
Audited Amount %
(in Php Millions)
Water Services 14,645 13,587 1,058 8
Sewer Services 3,294 2,909 385 13
Other Contract & Services 424 399 25 6
Total Revenues 18,363 16,895 1,468 9
combined effect of the increase in billed volume and reduced provisioning for regularly unpaid bills,
reflecting better collections. Consolidated billed volume for Maynilad and its subsidiary PHI was up
by 4% to 473.4 MCM. Percentage increases in the components of Maynilads revenues are set out
above.
Costs and Expenses

Increased by 4% from P=7,147 million to P
=7,414 million attributable to increases in amortization
expense with the increase in volume sold using UOP method, utilities and repairs and maintenance
due to increased network pumping activities in order to deliver water to new customers in the south
and operation of new sewage treatment plants (STPs) and outside services related to arbitration cost
expense. The increase was offset by lower provisions for doubtful accounts driven by improved
collection.
Core income
Maynilads core income increased by 17% to P =8,777 million in 2014 from P =7,530 million last year
due to increased billed volume and higher average tariff as discussed above.

Non-recurring items in 2014 includes one-time separation expenses and arbitration costs which
together were lower than the refinancing costs incurred in 2013.
Reported Net Income

Slightly higher Reported Net Income growth of 19% in 2014 as compared with core income due to the
impact of lower non-recurring expense in 2014.
79
Toll Roads
Increase
(in Php Millions)
Net toll revenues 8,641 8,154 487 6
Operating expenses 819 730 89 12
Interest income (expense) - net (1,114) (944) 170 18
Provision for income tax 952 731 221 30
Core Income 2,154 1,963 191 10
Non-recurring income (expense) (92) 38 (130) (>100)
Reported net income 2,779 2,784 (5) (0)
Reported net income attributable to equity holders 2,062 2,001 61 3
of MPTC
Core EBITDA 5,788 5,540 248 4
Core EBITDA margin 67% 68% (1%) (1)
Capital Expenditure 2,592 401 2,191 >100
Increase
2014 2013 Amount %
Average Kilometers Travelled - NLEX 3,505,833 3,272,638 233,195 7
Average Daily Vehicle Entries - DMT 80,698 76,842 3,856 5
MPTCs Core Net Income of P =2.2 billion for the period was 10% higher than a year earlier as a result
of strong traffic growth and increased shareholding in the NLEX. Average daily entries rose 7% on
the NLEX and 8% on the CAVITEX from a year earlier.
MPTC increased its shareholding in NLEX Corp through a 3.9% direct acquisition for P =1.5 billion in
January 2014 and additional effective shareholding of 4.6% for P
=1.7 billion in July 2014.
Philippines:
Construction continues on the first stage of the 8-km NLEX Harbour Link connecting the NLEX to
the North Manila Port in two segments (Segments 9 and 10) and is expected to have its first stage
open in first quarter of 2015. However, MPTC continues to await approval of toll rate adjustments on
R1 of CAVITEX (an increase of 19%) which should have been effective from January 1, 2012 and for
NLEX (an increase of 11%) which was to be effective from January 1, 2013. These delays and
additional issues surrounding the tariff regime for the Harbour Link are constraining continued and
needed expenditure on our road construction.
80
The NLEX Harbour Link and Citilink projects, together with expansion of the CAVITEX, would see
MPTC invest approximately P =31 billion over the next few years to complete construction of this vital
road infrastructure. It is therefore important that overdue tariff increases be implemented. MPTC and
MPIC would fund this sum using internal resources and external debt.
With regard to NLEX Corp's proposal to build an elevated expressway to connect the Northern and
Southern toll road systems (the "Connector" project), at the recommendation of the National
Economic and Development Authority, NLEX Corp and Philippine National Construction
Corporation created a joint venture to build the Connector which would serve the public well by
shortening journey times and significantly decongesting the city. However, in July 2014, the
Department of Justice opined that the joint venture approach did not meet the relevant legal tests, and
ordered the project to undergo a competitive challenge. On December 22, 2014, the Investment
Coordination Committee - Cabinet Committee reapproved the Connector back to Department of
Public Works and Highways as an unsolicited proposal subject to NEDA Board confirmation.
In a separate matter, on February 9, 2015, NLEX Corp received the Notice of Award from the BCDA
for the management, operation and maintenance of the 94-kilometer SCTEX subject to compliance
with specific conditions. The Notice of Award was issued by BCDA following the results of the Price
Challenge held last January 30, 2015. NLEX Corp plans to invest P
=400 million to integrate SCTEX
with NLEX to facilitate seamless travel between the two expressways.
In January 2015, MPTC, procured original proponent status for the proposed Cebu-Cordova Bridge
Project from Cebu City and the Municipality of Cordova. Negotiations with both Cebu City and the
Municipality of Cordova are on-going and once done, a Swiss Challenge will have to be conducted
before awarding of the contract. This project spanning 8.3 kilometers will link the island of Mactan to
mainland Cebu through the Municipality of Cordova. The total construction cost of the Cebu-
Cordova Bridge Project is estimated at P
=17.0 billion with completion date by 2020 assuming that
awards and approvals are secured during the first half of 2015.
Thailand:
On July 31, 2014, MPIC acquired its 75% shareholding in FPM Infra from First Pacific for a
consideration of approximately US$101.25 million. FPM Infra became a wholly-owned subsidiary of
MPIC and its sole asset is a 29.45% interest in DMT. DMT is a major toll road operator in Bangkok,
Thailand. The concession for DMT runs until 2034 for the operation of a 21.9-kilometer six-lane
elevated toll road from central Bangkok to Don Muang International Airport and further to the
National Monument in the north of Bangkok. On December 22, 2014 DMT secured tollrate increases
of 17% and 20% on its Original road and Northern extension, respectively.
Vietnam:
On January 14, 2015, MPIC through MPTC further expanded its regional footprint through an equity
investment and financing transaction with Ho Chi Minh City Infrastructure Investment Joint Stock
Co. (CII). The investment of approximately P=4 billion will result in MPTC holding a 45% minority
equity interest in CII Bridges and Roads Investment Joint Stock Co. (CII B&R) and is due to settle in
March 2015 upon completion of the closing conditions and deliverables.
Net Toll Revenues

=8,641 million, 6% higher year-on-year, mainly due to traffic volume
growth in 2014. Average daily traffic grew by 7% and 8% along NLEX and CAVITEX, respectively.

Total cost and expenses increased by 8% to P =4,352 million from P=4,035 million mainly due to higher
Operators fee driven by the increase in base rate in accordance with the Operations and Maintenance
Agreement between NLEX Corp and TMC. Toll operation and maintenance costs increased by P =338
81
million in 2014. The increase in toll O&M costs is partially offset by the decrease in amortization of
service concession assets from P=757 million in 2013 to P
=646 million in 2014. The decrease in
amortization expense resulted from NLEX Corps change in the method of amortizing the service
concession asset from straight-line to UOP method. This change in accounting policy resulted in a
decrease in amortization expense of P=121 million at MPTC's level, for the period ended December 31,
2014.
Interest expense - net

Financing cost increased by 18% or P
=170 million mainly due to the P
=3.3 billion debt drawdown by
MPTDC which was used to finance acquisition of additional 8.5% effective interest in NLEX Corp.
Core income
Core income increased by 10% to P
=2,154 million mainly due to the 8.5% increased shareholding in
NLEX Corp and lower amortization of Concession asset from change in amortization method to units-
of-production dampened by increase in interest expense as discussed above.

Non-recurring expense in 2014 mainly includes project expenses while 2013 non-recurring income
includes forex gain from CIC's dollar loans.

Reported Net income increased by 3% in 2014 mainly due to increase in toll revenues from higher
traffic.
Power
Increase
Manila Electric Company Audited Amount %
(in Php Millions)
Revenues 266,336 298,636 (32,300) (11)
Expenses 240,190 274,846 (34,656) (13)
Core Income 18,128 17,023 1,105 6
of MERALCO 18,053 17,211 842 5
Increase
2014 2013 Amount %
System Loss (12-month moving average) 6.49% 6.92% (0.43%) (6)
MERALCOs Core Net Income for 2014 rose 6% to P =18.1 billion compared with 2013. This was
driven mainly by a 3% increase in energy sales to 35,160 gigawatt hours (GWh) due to higher
demand from the commercial and industrial segments, which both grew by 4%. Revenues also reflect
82
the lower distribution tariff commencing July 2014 with the implementation of the 4th Regulatory
Year Maximum Average Price of P =1.5562 per kilowatt hour.
Capital expenditures for 2014, including those for new load requirements and system reliability,
amounted to P
=12.4 billion up from P=10.2 billion in 2013.
MERALCOs capex commitment continues to deliver strong returns. The 12-month moving average
system loss fell to just 6.5% at the end of December 2014. This level is 2 percentage points lower than
the regulatory cap of 8.5% which translates to savings for MERALCO's customers of P =4.6 billion in
2014.
In May 2014, MERALCO signed a Lease Concession Agreement with the Philippine Economic Zone
Authority (PEZA) to operate, maintain and improve the Cavite Economic Zone (CEZ) distribution
system. CEZ covers 332 hectares of prime distribution area with aggregate consumption of 473 GWh.
In November 2014, the PEZA approved MERALCO's application for registration as an Economic
Zone Utilities Enterprise within PEZA-CEZ.
MPower, MERALCOs Retail Electricity Supply unit, with its customer-centric product and price
offerings, have created significant value for its customers. It is serving 60% of the total 347 qualified
and registered contestable customers.
MERALCO PowerGen Corporation (MGen) is fast-tracking investment in new generation capacity to

avert or mitigate looming power supply gaps notwithstanding earlier legal delays.
San Buenaventura Power Limited (SBPL), in which MGen has a 49% interest with a right to
nominate a preferred investor for an additional 2%, is in advanced stages in developing a new
455 MW (net) supercritical coal-fired power plant in Mauban, Quezon. SBPL, a joint venture with
Electricity Generating Public Company Limited of Thailand, has filed the Power Sales Agreement
with the Electricity Regulatory Commission and is currently awaiting decision to proceed. The plant
is scheduled to begin commercial operation in the second half of 2018.
Following the Supreme Courts clearance to proceed with the project, MGens Redondo Peninsula
Energy, Inc. joint venture aims to complete the 2x300 MW coal-fired powered power plant within
four years.
Global Business Power Corporation, in which MERALCO has a 22% interest, commenced operations
of subsidiary Toledo Power Company's 82 MW coal-fired power plant in December 2014. Another
150 MW coal-fired power plant is being built in Iloilo City through Panay Energy Development
Corporation. Equity in this project has been fully funded and commercial operation is expected to
start in the third quarter of 2016.
With the increase in effective ownership in MERALCO from 24.98% to 27.48% beginning
June 26, 2014 and the benefit of lower interest costs reflecting debt refinancing undertaken last year,
the segments contribution to MPIC for the period rose 30% to 3.0 billion.
83
Healthcare
Increase
(in Php Millions)
Gross Revenues 14,096 12,493 1,603 13
Expenses 11,382 10,144 1,238 12
Core EBITDA 2,946 2,656 290 11
Core Income 1,007 879 128 15
Reported Net Income 1,011 886 125 14
Increase
2014 2013 Amount %
Occupancy rate (%) - Standard Beds 67% 72% (5%) (7)
No. of Accredited Doctors 5,367 5,418 (51) (1)
Aggregate Core Net Income for the Hospital Group rose 15% to P =1.0 billion in 2014 compared with
2013 as a result of increasing patient revenues, gains from completed capital expenditure programs,
savings from group synergy projects and contributions from DLSMC, CLDH and MegaClinic, which
were invested in during the second half of 2013. While the aggregate core net income from the
Hospital Group increased, contribution to MPICs core income decreased from P =581 million in 2013
to P
=465 million this year reflecting dilution in the effective ownership in the hospitals with the entry
of GIC as described below.
On May 16, 2014, MPIC and GIC entered into a partnership agreement to facilitate the further
expansion of the hospital group of MPIC. GIC, through its affiliates, invested P =3.7 billion for a 14.4%
stake in MPICs hospital holding company MPHHI. The partnership with GIC will help the Company
grow not only in hospitals but also in other health-related fields, in the Philippines and possibly
abroad. GIC also advanced to MPIC P =6.5 billion by way of an Exchangeable Bond which will be
exchanged into a 25.5% stake in MPHHI in the future, subject to certain conditions.
The Hospital Group currently consists of eight (8) full-service hospitals with approximately 2,150
beds in total Makati Medical Center, Cardinal Santos Medical Center, Our Lady of Lourdes
Hospital, Asian Hospital & Medical Center and De Los Santos Medical Center in Metro Manila;
Central Luzon Doctors' Hospital in Tarlac; Riverside Medical Center in the Visayas; and Davao
Doctors Hospital in Mindanao MegaClinic, its first mall-based diagnostic and ambulatory care
center located in SM Megamall and 2 healthcare colleges, Riverside College Inc. in the Visayas and
Davao Doctors College in Mindanao. MPIC operates the largest private hospital group in the country,
with hospitals in all three major island groupings of the Philippines.
84
Other matters:
i. Events that will trigger direct or contingent financial obligation that is material to the
company, including any default or acceleration of an obligation
There are various outstanding contingent liabilities which are not reflected in the
accompanying consolidated financial statements. Please refer to Note 32 Contingencies and
Note 33 Significant Contracts, Agreements and Commitments to the 2016 Audited
Consolidated Financial Statements for the updates on the Companys financial obligations.
ii. All material off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the company with unconsolidated entities or other
persons created during the reporting periods
There are various outstanding contingent liabilities which are not reflected in the
accompanying consolidated financial statements. Please refer to Note 32 Contingencies and
Note 33 Significant Contracts, Agreements and Commitments to the 2016 Audited
Consolidated Financial Statements for the updates on the Companys financial obligations.
iii. Description of any material commitments for capital expenditures, general purpose of such
commitments, expected sources of funds for such expenditures
Please refer to Note 33 Significant Contracts, Agreements and Commitments to the 2016
Audited Consolidated Financial Statements.
iv. Any known trends, events or uncertainties that have had or that are reasonably expected to
have a material favorable or unfavorable impact on net sales or revenues or income from
continuing operations
Please refer to Note 32 Contingencies to the 2016 Audited Consolidated Financial

Statements.
v. Any seasonal aspects that had a material effect on the financial condition or results of
operations
The Companys toll road operations are a seasonal business, with comparatively higher
revenues during the period from December to April and comparatively lower revenues during
the period from June to September. The Companys water business is also seasonal, with
comparatively lower revenues during the rainy season in the Philippines. For the power
distribution segment, electricity sales exhibit a degree of quarterly seasonality with the first
quarter having lower than the average electricity sales as this period is characterized by cooler
temperature and softer consumer demand following heightened consumer spending in the last
quarter of the year. The second quarter is marked by higher than average electricity sales.
The fourth quarter performance is about the average of the year.
85
Item 7. Consolidated Financial Statements
Please see Exhibit I - 2016 Audited Consolidated Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosures
Information of Independent Accountant and Other Related Matters
1. External Audit Fees and Services
Below are the fees paid for by the Registrant to its External Auditor:
Type of Service Nature of Service 2016 2015 2014

Audit and Audit Audit of registrants =24,000,000
P =23,640,875
P =23,140,875
P
related fees annual financial
statements and review
of quarterly results
Non-Audit Fees Financial accounting 1,800,000 3,750,000 -

and advisory services
for a bid project
Agreed Upon 100,000
Procedure
Tax Advisory services - 1,700,000 -
The individual audit committees of the registrant and subsidiaries review and approve the
audit plan and scope of work for the above services and ensure that the rates are competitive
as compared to the fees charged by other equally competent external auditors performing
similar nature and volume of activities.
2. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
The auditing firm of SGV & Co. is MPICs independent public accountant since 2006.
Representatives of the said firm are expected to be present at the annual stockholders
meeting and will have the opportunity to make a statement if they desire to do so, and are
expected to be available to respond to appropriate questions.
During the Parent Companys three most recent years or any subsequent interim periods,
there was no instance when the Parent Companys public accountants have resigned or have
indicated that they decline to stand for re-election or have been dismissed or where the Parent
Company had any disagreement with its public accountants or financial disclosure issue.
The 2015 audit of the Company is in compliance with paragraph (3)(b)(ix) of the Securities
Regulation Code Rule 68, as amended, which provides that the external auditor should be
rotated, or the handling partner changed, every five (5) years or earlier.
SGV is willing to stand for re-election as external auditor of MPIC for the ensuing year.
86
PART III CONTROL AND COMPENSATION INFORMATION
Item 9. Directors and Executive Officers of the Issuer
Directors
The following are the names, ages, citizenship and periods of service of the incumbent
directors/independent directors of the Parent Company, all of whom have been nominated for re-
election at the Annual Meeting:
Period during which individual

Name Age Citizenship
has served as such
Manuel V. Pangilinan 70 Filipino March 2006 up to present
Jose Ma. K. Lim 64 Filipino March 2006 up to present
David J. Nicol 57 Australian May 2010 up to present
Edward S. Go* 77 Filipino July 2006 up to present
Augusto P. Palisoc, Jr. 59 Filipino March 2006 up to present
Artemio V. Panganiban* 80 Filipino August 2007 up to present
Ramoncito S. Fernandez 61 Filipino June 2009 up to present
Lydia B. Echauz* 68 Filipino November 2009 up to present
Ray C. Espinosa 59 Filipino November 2009 up to present
Robert C. Nicholson 59 British November 2009 up to present
Washington Z. SyCip* 94 Filipino August 2011 up to present
Alfred V. Ty 48 Filipino November 2015 up to present
Albert F. Del Rosario 77 Filipino May 2016 up to present
Rodrigo E. Franco 57 Filipino May 2016 up to present
Francisco C. Sebastian 62 Filipino June 2016 up to present
Antonio A. Picazo 74 Filipino March 2006 up to May 2016
Edward A Tortorici 76 American November 2009 up to June 2016
Victorico P. Vargas 64 Filipino May 2011 to May 2016
* Independent Directors
Officers and Advisors
The following are the names, ages, positions, citizenship and periods of service of the incumbent
officers and advisors of the Parent Company:
Period during which

individual has served as
Name Age Position Citizenship
such
Manuel V. Pangilinan 70 Chairman Filipino March 2006 up to present
Jose Ma. K. Lim 64 President & CEO Filipino March 2006 up to present
David J. Nicol 57 Chief Finance Officer Australian April 2010 up to present
Joseph J. Lacson 46 Chief Investment Officer Filipino December 2016 up to

present
Edward A. Tortorici 76 Executive Advisor American March 2006 up to present
Augusto P. Palisoc, Jr. 59 Executive Director Filipino March 2006 up to present
87
Period during which
individual has served as
Name Age Position Citizenship
such
Antonio A. Picazo 75 Corporate Secretary Filipino March 2006 up to present
Cristina S. Palma Gil- 48 Assistant Corporate Filipino May 2013 up to present

Fernandez Secretary
Jose Jesus G. Laurel 62 Corporate Governance Filipino May 2016 up to present
Officer
Melody M. del Rosario 51 Vice President PR and Filipino March 2006 up to present
Corporate
Communications
Albert W. L. Pulido 44 Vice President Filipino July 2009 up to December
Investor Relations 2016
Maida B. Bruce 42 Vice President Group Filipino November 2009 up to
Controller present
Karim G. Garcia 48 Vice President Filipino January 2015 to present
Santhea V. delos Santos 38 Assistant Vice President Filipino February 2014 to present
Chief Risk Officer
Loudette Anne M. Zoilo 39 Assistant Vice-President Filipino February 2012 to present
Human Resources
Ricardo M. Pilares III 34 Assistant Vice President Filipino February 2015 to present
Legal
Melanie G. Bendijo 42 Assistant Vice President Filipino February 2015 to present
Treasury
Maricris A. Ysmael 36 Assistant Vice President Filipino February 2016 to present
Investor Relations
Armin T. Uy 36 Assistant Vice President Filipino February 2016 to present
Finance
Business Experience and Other Directorships
The business experience of each of the directors of the Parent Company is as follows:
Manuel V. Pangilinan
Chairman of the Board of Directors
Member, Compensation Committee
Education and Training:

BA Economics Degree, Ateneo De Manila University
MBA Degree, Wharton School of Finance and Commerce University of Pennsylvania
Honorary Doctorate in Humanities, San Beda College/Xavier University/Holy Angel
University/Far Eastern University
Membership in Boards of Listed Companies other than MPIC:

Philippine Long Distance Telephone Company
Manila Electric Company
Philex Mining Corporation
Philex Petroleum Corporation
88
Membership in Boards of Non-Listed Companies:
Beacon Electric Asset Holdings, Inc.
Smart Communications, Inc.
PLDT Communications and Energy Ventures Inc. (formerly Piltel)
Landco Pacific Corporation
Medical Doctors, Inc.
Colinas Verdes Hospital Managers Corporation
Davao Doctors Inc.
Asian Hospital, Inc.
Maynilad Water Services Corporation
Mediaquest, Inc.
Associated Broadcasting, Corporation (TV5)
Manila North Tollways Corporation
MERALCO Powergen Corporation
Metro Pacific Hospital Holdings, Inc.
MetroPac Movers, Inc.
MetroPac Logistics Company Inc.
MetroPac Water Investments Corporation
Cardinal Medical Charities Foundation, Inc.
East Manila Hospital Managers Corporation
Ideaspace Foundation, Inc.
Light Rail Manila Holdings, Inc.
Metro Pacific Light Rail Corporation
Metro Pacific Investments Foundation, Inc.
Porrovia Corporation
Other Information:
Mr. Pangilinan worked in Manila for Philippine Investment Management Consultants Inc. (the
PHINMA Group) and in Hong Kong with Bancom International Limited and American Express
Bank, and thereafter with First Pacific Company Limited.
Mr Pangilinan founded First Pacific in 1981 and serves as its Managing Director and Chief
Executive Officer. Within the First Pacific Group, he holds the positions of President
Commissioner of P.T. Indofood Sukses Makmur, the largest food company in Indonesia.
In the Philippines, he is the President and CEO of Philippine Long Distance Telephone
Company (PLDT), the country's dominant telecom company and Smart Communications
Incorporated - the largest mobile phone operator in the Philippines, after serving as their
Chairman until December 2015.
He is currently the Chairman of the Board of Trustees of the San Beda College. On February
5, 2007, Mr. Pangilinan was named the President of the Samahang Basketbol Ng Pilipinas
(SBP), the national sport association for basketball. Effective January 2009, MVP assumed
the Chairman of the Amateur Boxing Association of the Philippines (ABAP), a governing
body of amateur boxers in the country. In October 2009, Mr. Pangilinan was appointed
Chairman of the Philippine Disaster Recovery Foundation, Incorporated (PDRF), a non-profit
foundation established to formulate and implement a reconstruction strategy to rehabilitate
areas devastated by floods and other calamities. Mr. Pangilinan is Chairman of Philippine
Business for Social Progress (PBSP), the largest private sector social action organization
made up of the country's largest corporations. In June 2012, he was appointed as Co-
Chairman of the US-Philippines Business Society, a non-profit society which seeks to
89
broaden the relationship between the United States and the Philippines in the areas of trade,
investment, education, foreign and security policies and culture.
Jose Ma. K. Lim

President and Chief Executive Officer
Executive Director
Non-Voting Member, Nominations Committee

BA Philosophy Degree, Ateneo De Manila University
MBA Degree, Asian Institute of Management


Beacon Electric Asset Holdings, Inc.
Indra Philippines
Metro Pacific Tollways Corporation
Tollways Management Corporation
Davao Doctors Inc.
Maynilad Water Services, Inc.
Indra Philippines, Inc.
Our Lady of Lourdes Hospital
MetroPac Movers, Inc.
MetroPac Iloilo Holding Corporation
MetroPac Logistics Company, Inc.
Riverside Medical Center, Inc.
Riverside College Inc.
Metro Pacific Investments Foundation Inc.
Metro Strategic Infrastructure Holdings
MERALCO PowerGen Corporation
DMCI-MPIC Water Company, Inc.
Cardinal Santos Medical Center
Pacific Global Aviation Inc.
Neo Oracle Holdings Inc.
Light Rail Manila Corporation
AIF Tollroads Holdings
AF Payments Inc.
AHI Hospital Holdings Corporation
90
Other Information:
Mr. Lim worked as a senior officer for various local and foreign banking institutions from 1988
to 1995. He was Director for Investment Banking of the First National Bank of Boston from
1994 to 1995, and prior to that, Vice President of Equitable Banking Corporation.
In 1995, Mr. Lim joined Fort Bonifacio Development Corporation (FBDC) as Treasury Vice
President and eventually was appointed Chief Finance Officer in 2000.
In 2001, Mr. Lim assumed the position of Group Vice President and Chief Finance Officer of
FBDCs parent company, Metro Pacific Corporation (MPC) on a concurrent basis. He was
then elected President and CEO of MPC in June 2003.
In 2006, MPC was reorganized into Metro Pacific Investments Corporation (MPIC), where he
continues to serve as President and CEO. Aside from MPIC he is also currently a Director in
the following MPIC subsidiaries and affiliate companies: Beacon Electric Asset Holdings Inc.;
Manila Electric Company; Metro Pacific Tollways Corporation; Manila North Tollways
Corporation; Tollways Management Corporation; Maynilad Water Services, Inc.; Light Rail
Manila Corporation; AF Payments Inc; MetroPac Water Investments Inc. Indra Philippines;
Global Business Power Corporation.; Medical Doctors, Inc. (owner and operator of Makati
Medical Center); Cardinal Santos Medical Center (Colinas Verdes Hospital Managers
Corporation); Asian Hospital: Our Lady of Lourdes Hospital; Manila Doctors Hospital Inc; He
is also a Director of the Ateneo Graduate of School of Business and a Trustee of the Asian
Institute of Management. Mr. Lim serves as Chairman of Indra Philippines.
He is a founding member of the Shareholders Association of the Philippines and an active

member in various business organizations.
He was awarded by the Corporate Governance Asia as the Best CEO for Investors Relations
for five (5) consecutive years from 2012-2016.
David J. Nicol
Chief Finance Officer
Executive Director

B. Sc. Management Sciences, University of Lancaster, England
ACA Institute of Chartered Accountants in England and Wales

Don Muang Tollways Public Company Limited

AF Payments, Inc.
Other Information:
Accomplished and versatile business leader having successfully held CEO and CFO positions
in a wide range of industries in Europe and Asia. Voted by Institutional Investor as the top
91
Conglomerate CFO all Asia in 2012 and 2013 and by Finance Asia as the top CFO in the
Philippines in 2016.
Mr. Nicol began his career with PricewaterhouseCoopers where he served for 10 years in
London, New York and Hong Kong. He joined First Pacific Company Limited in 1991 and in
1994 moved to their Thai affiliate Berli Jucker PCL where he served as CFO until 1998 and
then as Group CEO until 2002 when First Pacific exited Thailand.
From 2002 until 2010 when Mr. Nicol joined MPIC, he held positions as CEO Europe and
Asia for SIRVA, Inc., CEO of Pinnacle Regeneration group and as a director of Reconomy
Limited in the UKs waste and recycling sector. He has a consistent record of building
shareholder value through operational improvement, restructuring, mergers and acquisitions
and entering new markets.
Robert C. Nicholson
Member, Nominations Committee
Non-Executive Director

Business Administration, University of Kent

Philex Mining Corporation
Philex Petroleum Corporation

Pacific Basin Shipping Limited
Lifestyle Properties Development Limited
Other Information:
Mr. Nicholson is qualified as a solicitor in England and Wales and in Hong Kong. He is a
Chairman of Goodman Fielder Pty Limited (since March 2015),and a Commissioner of PT
Indofood Sukses Makmur Tbk and a Director of Philex Mining Corporation, PXP Energy
Corporation, Pacific Light Power Pte. Ltd. and Forum Energy Limited, all of which are First
Pacific Group subsidiaries, associates or joint venture. Mr. Nicholson is also an Independent
Non- Executive Director of Pacific Basin Shipping Limited and Lifestyle Properties
Development Limited. Previously, he was a senior partner of Reed Smith Richards Butler
from 1985 to 2001 where he established the corporate and commercial department, and was
also a senior advisor to the board of directors of PCCW Limited between August 2001 and
September 2003. Mr. Nicholson has wide experience in corporate finance and cross-border
transactions, including mergers and acquisitions, regional telecommunications, debt and
equity capital markets, corporate reorganizations and privatization in China. Mr. Nicholson
joined First Pacifics Board in 2003.
Augusto P. Palisoc Jr.


BA Economics, De La Salle University
Masters in Business Management, Asian Institute of Management

NIL
92
Davao Doctors Inc.
Riverside College, Inc.
AHI Hospital Holdings Corporation
Central Luzon Doctors Hospital, Inc.
Colinas Healthcare Inc.
De Los Santos Medical Center, Inc.
Medigo Corporation
Metro Pacific Investments Foundation, Inc.
Metro Pacific Zamboanga Hospital Corporation
The Megaclinic, Inc.
Marikina Valley Medical Center, Inc.
Delgado Clinic, Inc.
Sacred Heart Hospital, Inc.
Other Information:
Augusto P. Palisoc Jr. has been with the First Pacific group of companies for 34 years. He is
currently an Executive Director of MPIC and is the President & Chief Executive Officer and
Director of Metro Pacific Hospital Holdings Inc, which is the groups holding company for all
hospital and healthcare investments.
He is Chairman of the Board of Asian Hospital Inc., De Los Santos Medical Center, Marikina
Valley Medical Center, East Manila Hospital Managers Corporation (owner and operator of the
Our Lady of Lourdes Hospital), Delgado Clinic Inc. (owner and operator of the Dr. Jesus C.
Delgado Memorial Hospital), Davao Doctors Hospital (Clinica Hilario Inc.), Riverside Medical
Center Inc. and Riverside College Inc. in Bacolod, Central Luzon Doctors Hospital in Tarlac,
Sacred Heart Hospital of Malolos Bulacan, Metro Pacific Zamboanga Hospital Corporation,
Metro Sanitas Corporation, and Megaclinic Inc,. He is also a Director of Medical Doctors, Inc.
(owner and operator of the Makati Medical Center), Colinas Verdes Hospital Managers
Corporation (owner and operator of Cardinal Santos Medical Center), Manila Medical Services
Inc. (owner and operator of Manila Doctors Hospital), and Davao Doctors College Inc.
Prior to joining MPIC, he was the Executive Vice President of Berli Jucker Public Company
Limited in Thailand from 1998 to 2001. Mr. Palisoc served as President and CEO of Steniel
Manufacturing Corporation in the Philippines from 1997 to 1998. He has held various
positions within the First Pacific group as Group Vice President for Corporate Development
of First Pacific Company Limited in Hong Kong, and Group Managing Director of FP
Marketing (Malaysia) Sdn. Bhd. in Malaysia. Before he joined First Pacific in 1983, he was
Vice President of Monte Real Investors, Inc. in the Philippines.
93
Ramoncito S. Fernandez

BS Degree in Industrial Management Engineering, De La Salle University
Masters in Business Management, Asian Institute of Management
Advanced Management Program of IESE (Spain) , University of Asia and the Pacific

NIL

Maynilad Water Services, Inc.
Cavitex Infrastructure Corporation
PLDT Subic Telecom, Inc.
PLDT Clark Telecom, Inc.
Metro Iloilo Holdings Corporation
MetroPac Cagayan de Oro, Inc.
Pacific Global One Aviation Company, Inc.
Tahanan Mutual Building and Loan Association, Inc.
Other Information:
Ramoncito S. Fernandez is the current President and Chief Executive Officer of Maynilad
Water Services, Inc., MPWIC and some subsidiaries of the group including Pacific Global One
Aviation Company, Inc., and Tahanan Mutual Building and Loan Association, Inc. (TIMBLA).
He is the 2009 PISM GAWAD SINOP Awardee, the highest award conferred by the Foundation
of the Society of Fellows in Supply Management and the Philippine Institute for Supply
Management to outstanding achievers in the field of supply management.
Mr. Fernandez was head of the Tollroad business of the group from 2008 to 2015; growing its
portfolio inside and outside the Philippines. He is an advocate of customer satisfaction,
operating efficiency and innovation. Mr. Fernandez has been with the MVP Group since 1994,
first under the packaging business and later to the Telecoms Group before moving to MPIC.
Ray C. Espinosa

BS General Studies, University of Santo Tomas
Bachelor of Laws, Ateneo de Manila University
Master of Laws, University of Michigan Law School

Lepanto Consolidated Mining Corporation
Roxas Holdings Inc.

Beacon Electric Asset Holdings, Inc.Business World Publising Corporation
Cignal TV, Inc.
94
Digitel Crossing, Inc.
Excel Pacific Holdings Corporation
First Pacific Company Limited
Kalilayan Power, Inc.
Med Vision Resources, Inc.
Mediaquest Holdings, Inc.
Media5 Marketing Corporation
MERALCO PowerGen Corporation
Metro Pacific Assets Holdings, Inc.
Metro Pacific Resources, Inc.
Pacific Global One Aviation Company, Inc.
PhilStar Daily, Inc.
Philippine Telecommunications Investment Corporation
Pilipinas Pacific Enterprise Holdings, Inc.
Pilipino Star Ngayon Inc.
Studio5 Inc.
The Philippines Home Cable Holdings, Inc.
Telemedia Business Ventures, Inc.
TV5 Network Inc.
Wolfpac Mobile Inc.
Other Information:
He was a partner of SyCip Salazar Hernandez & Gatmaitan from 1982 to 2000, a foreign
associate at Covington and Burling (Washington, D.C., USA) from 1987 to 1988, and a law
lecturer at the Ateneo de Manila School of Law from 1983 to 1985 and 1989. He ranked first
in the 1982 Philippine Bar examination.
He is a director of PLDT, Meralco, Roxas Holdings Incorporated, Meralco PowerGen

Corporation, Mediaquest Holdings Incorporated, TV5 Network Incorporated, Mediascape
Incorporated (Cignal TV) and also an independent director of Lepanto Consolidated Mining
Company (Lepanto). He is the chairman of the Philstar Daily Incorporated and
BusinessWorld Publishing Corporation, chairman of the Finance Committee of Meralco, and
chairman of the Audit Committee of Lepanto. He is also the General Counsel of Meralco,
Head of PLDTs Regulatory Affairs and Policy Office and a trustee of the Beneficial Trust
Fund of PLDT. Mr. Espinosa joined First Pacific in June 2013. He is First Pacific Groups
Head of Government and Regulatory Affairs and Head of Communications Bureau for the
Philippines.
Edward S. Go (Independent Director)

Independent Director
Chairman, Audit Committee
Chairman, Risk Management Committee
Chairman, Nominations Committee
Member, Corporate Governance Committee

Bachelor of Arts, Ateneo de Manila University
Post Graduate Studies, Ateneo de Manila University
Doctor of Philosophy in Corporate Management (Honoris Causa), University of Baguio.
95
Trans-Asia Petroleum Corporation.
Filipino Fund Inc.

PLDT Communications and Energy Ventures, Inc.
Hyundai Asia Resources, Inc
Negros Navigation Co., Inc.
ASA Philippines Foundation
Filipino Fund Inc.
BTF Holdings Inc
Mediaquest Holdings, Inc.
TV5 Network, Inc.
Cignal TV, Inc.
BusinessWorld Publishing Corporation
PhilSTAR Daily, Inc.
AB Capital Investment Corporation
Vicsal Investment Corporation
Union Galvasteel Corporation
Other Information:
Mr. Go has over 40 years of management experience in banking and finance, starting as
Executive Trainee with Citibank N.A. and became President of Philippine Bank of
Communications in 1974 and Chairman and Chief Executive Officer of Chinabank in 1985.
Mr. Go is also Chairman of the Audit Committee of MPIC and PCEV.
Artemio V. Panganiban (Independent Director)

Chairman, Corporate Governance Committee

Associate Arts Degree, Far Eastern University
Bachelor of Laws, Far Eastern University
Doctor of Laws (Honoris Causa), University of Iloilo/Far Eastern University/ University of
Cebu/ Angeles University/ Bulacan State University

Asian Terminals, Inc.
GMA Holdings, Inc.
GMA Network Inc.
Jollibee Foods Corporation
Petron Corporation
Robinsons Land Corporation
First Philippines Holdings Corporation

TeaM Energy Corporation
Metrobank Foundation
96
First Philippine Holdings Corporation
Pan Philippine Resources Corp. and Peecee Realty, Inc.
Foundation for Liberty and Prosperity
Philippine Judges Foundation
Manila Cathedral-Basilica Foundation
Claudio Teehankee Foundation
Tan Yan Kee Foundation
Adviser of the following Companies:

Metropolitan Bank and Trust Company
Bank of the Philippine Islands
Double Dragon Properties Corp.
Other Information:
A consistent scholar, retired Chief Justice Panganiban obtained his Associate in Arts With
Highest Honors and later his Bachelor of Laws with Cum Laude and Most Outstanding
Student honors. He placed sixth among 4,200 candidates who took the 1960 bar examinations.
A well-known campus leader, he founded and headed the National Union of Students of the
Philippines. He is also the recipient of several honorary doctoral degrees.
In 1995, he was appointed Justice of the Supreme Court, and in 2005, Chief Justice of the
Philippines. Aside from being a prodigious decision writer, he also authored eleven books while
serving on the highest court of the land. His judicial philosophy is Liberty and Prosperity
Under the Rule of Law. He believes that the legal profession and the judiciary must not only
safeguard the liberty of our people but must also nurture their prosperity and economic well-
being. To him, justice and jobs, ethics and economics, democracy and development, nay, liberty
and prosperity must always go together; one is useless without the other. On his retirement on
7 December 2006, his colleagues acclaimed him unanimously as the Renaissance Jurist of the
21st Century.
Prior to entering public service, Chief Justice Panganiban was a prominent practicing lawyer,
law professor, business entrepreneur, civic leader and Catholic lay worker. He was the only
Filipino appointed by the late Pope John Paul II to be a member of the Vatican-based
Pontifical Council for the Laity for the 1996-2001 term. At present, he is a much sought-after
independent director and adviser of business firms, and writes a column in the Philippine
Daily Inquirer.
Lydia Balatbat-Echauz (Independent Director)

Chairman, Compensation Committee
Member, Audit Committee
Member, Risk Management Committee
Member, Nominations Committee

Bachelor of Arts Degree Major in Economics, St. Theresas College
Master of Business Administration, Ateneo de Manila University
Doctor of Business Administration, De La Salle University
97
NIL

PLDT Beneficial Trust Fund
Philstar Group
Global Business Power Corporation
FERN Realty Corporation
Riverside College Inc.
Development Bank of the Philippines
DBP Provident Fund
DBP Brokerage Insurance, Inc.
DBP Data Center, Inc.
Henry Sy Foundation, Inc.
Felicidad Sy Foundation, Inc.
SM Foundation, Inc.
MCO Foundation, Inc
Laudibus, Inc.
Other Information:
Lydia Echauz is retired from academe. She was for ten years President of Far Eastern
University and its three other affiliate schools. Prior to joining FEU in 2002, she served as
Dean of De La Salle University Graduate School of Business, Associate Director of the MBA
program of the Ateneo de Manila University Graduate School of Business, and Associate
Professor of the University of the East, College of Business Administration. She is currently a
member of the Board of a few organizations, life member and former governor of the
Management Association of the Philippines, and past President of the Association of
Southeast Asian Institutions of Higher Learning, RP Council. She has been awarded most
outstanding Filipino and most distinguished alumna of ADMU, DLSU, and St. Theresa's
College.
Washington Z. SyCip (Independent Director)


Bachelor of Science in Commerce, University of Santo Tomas
Master of Science in Commerce, Columbia University

Belle Corporation
Cityland Development Corporation
MacroAsia Corporation
Lopez Holdings Corporation
LT Group, Inc.
PAL Holdings, Inc
Philippine National Bank

ABS-CBN Lingkod Kapamilya Foundation, Inc.
Cityland Development Corporation
98
Global Business Holdings, Inc.
Highlands Prime Inc.
Philippine American Life and General Insurance Company, Inc.
Philequity Management Inc.
Philippine Investment Management, Inc.
Philippine National Bank
Other Information:
Mr. Washington SyCip is the Founder of the SGV Group. He is Chairman Emeritus of the
Board of Trustees and Board of Governors of the Asian Institute of Management, Philippines.
He is a member of the Board of Overseers of the Columbia University Graduate School of
Business, Vice Chairman of the Board of Trustees of The Conference Board (2000-2004),
member of the International Advisory Board of the Council on Foreign Relations (1995-
2010), and an Honorary Life Trustee of The Asia Society, all in New York. He is a member
of the Board of Directors of a number of major corporations in the Philippines and other parts
of the world.
Alfred V. Ty
Member, Risk Management Committee
Member, Corporate Governance Committee

Bachelor of Science in Business Administration, University of Southern California

Metropolitan Bank & Trust Company
GT Capital Holdings, Inc

Toyota Motor Philippines Corporation
Lexus Manila, Inc.
Federal Land Group of Companies
Property Company of Friends, Inc.
Global Business Power Corporation
Albert F. Del Rosario


Bachelor of Science Degree in Economics, New York University

NIL

NIL
Other Information:
Mr. Del Rosario served as Secretary of Foreign Affairs of the Philippines from February 2011
to March 2016 and as Philippine Ambassador to the United States of America from October
2011 to August 2006. Prior to entering public service, Amb. del Rosario was on the Board of
99
Directors of over 50 firms. His business career for over four decades has spanned the insurance,
banking, real estate, shipping, telecommunications, advertising, consumer products, retail,
pharmaceutical and food industries. He also headed the development of Pacific Plaza Towers.
He is Co- founder of Gotuaco del Rosario Insurance Brokers Inc., Chairman of Philippine
Stratbase ADR Institute, Inc. and a Director of First Pacific Company, Indra Philippines, Inc.
PLDT Inc., Metro Pacific Tollways Corporation, Cavitex Infrastructure Corporation, and
Sarimonde Foods Corporation.
Amb. del Rosario was conferred the Order of Sikatuna, Rank of Datu, Order of Lakandula with
a Rank of Grand Cross (Bayani) and was recipient of EDSA II Presidential Heroes Award. He
was granted the 2013 Professional Chair for Public Service and Governance by Ateneo School
of Government and the Metrobank Foundation, 2014 Management Man of the Year by
Management Association of the Philippines, 2016 Outstanding Government National Official,
2016 Asia CEO Awards as Life Contributor, and Manuel L. Quezon Gawad Parangal as Quezon
Citys Most Outstanding Citizens for 2016. He was also elevated to the Xavier Hall of Fame
in New York City in 2006 and received the AIM Washington Sycip Distinguished Management
Leadership Award in 2011. He was conferred Doctor of Laws (Honoris Causa) for principled
commitment to democracy, integrity and the rule of law by the College of Mount Saint Vincent,
New York City in 2015. He received the Rotary Club Makati Wests first Albert del Rosario
Award in 2016, the Outstanding Leadership in Diplomatic Service award by Miriam College
Department of International Studies and Philippine Tatlers Diamond Award.
Rodrigo E. Franco

BS Management Engineering, Ateneo de Manila University
Masters of Business Administration, Ateneo Graduate School of Business

NIL

Other Information:
Mr. Franco played a key role in the NLEX project. He was initially primarily responsible for
managing MNTCs project finance facilities from multilateral and commercial banking
sources. He was also involved in identifying and mitigating risk exposure of the company,
managing relationship with the shareholders and other stakeholders, and developing solutions
for Finance-related issues. In 2009, he eventually became the President and CEO of MNTC.
He now leads MNTC which has become a premier private sector infrastructure developer in the
country.
Before joining MNTC in April 2003, Rod spent 20 years with JPMorgan Chase Bank. He was
Vice President for Investment Banking when he left the Manila branch of JPMorgan Chase by
the end of 2002. While in JPMorgan Chase, he assisted several Philippine companies raise
funds from the international loan and capital markets, and had been involved in originating and
executing a number of mergers and acquisitions, equity capital markets and loan and bond
restructuring transactions.
100
Francisco C. Sebastian
Member, Audit Committee

AB Degree in Economics, Ateneo de Manila University

GT Capital Holdings, Inc.
Metropolitan Bank & Trust Company
Other Information:
Mr. Sebastian is concurrently the Chairman of First Metro Investment Corporation, Vice
Chairman of Metropolitan Bank & Trust Company and Chairman of GT Capital Holdings Inc.
He joined the Metrobank Group in 1997 when he was appointed as President of First Metro
Investment Corporation, a position which he held for 13 years until 2011 when he became
Chairman.
Mr Sebastian joined the Ayala Group in 1975, and was seconded in 1977 to Hong Kong by
Ayala Investment and Development Corporation. He worked as an investment banker in Ayala
International Finance Limited and then Filinvest Finance (HK) Ltd. until 1984. He then started
his own corporate and financial advisory firm based in Hong Kong, Integrated Financial
Services Ltd., which he managed until he returned after 20 years to the Philippines to join the
Metrobank Group in 1997.
Mr. Sebastian graduated Magna Cum Laude with an AB degree in Economics Honors from the
Ateneo de Manila University in 1975.
All of the incumbent Directors named above have a one year term of office.
Officers
The business experience of each of the officers and executives of the Parent Company is as follows:
Joseph Lacson
Mr. Lacson joined Metro Pacific as Chief Investment Officer in December 2016 after having
lived and worked in the United States, Norway and Singapore in the previous 22 years. Mr.
Lacson has had executive leadership roles in a number of leading multi-national companies as
well as privately-held family conglomerates in industries as diverse as consumer goods,
technology, infrastructure development, shipping, oil and gas, and real estate. Joining P&G after
college, Joseph rose to become brand manager of Rejoice Shampoo. Mr. Lacson began his post-
MBA career working directly for Steve Ballmer at Microsoft. From there, Mr. Lacson took on
increasingly progressive roles in the technology industry including Product Planner at Slate.com,
General Manager at Exodus / Cable and Wireless, and CFO of MSNBC Interactive. Mr. Lacson
joined FAST Search, at that time the largest listed Norwegian technology company, as Head of
Strategy and Business Development, before moving up to the CFO role where he oversaw a
turnaround and successful sale to Microsoft for USD 1.3 Billion. Moving back to Asia, Mr.
Lacson became Commercial Director (Head of Sales, Business Development and Marketing) at
the RGE Group, a leading SE Asian privately held conglomerate with over USD 15B in
assets, where he was responsible specifically for the multi-billion pulp and paper business . He
was also a Partner and the Chief Investment Officer at Frontier Investments and Development
101
Partners where he put together deals in IndoChina and Mongolia. Before returning to the
Philippines, Mr. Lacson was the Group CFO of IMC Pan Asia Alliance, a leading private
company spearheaded by the Tsao family, engaged in shipping, industrial supply chain solutions,
real estate and lifestyle. Mr. Lacson earned an MBA with High Distinction (Baker Scholar) from
the Harvard Business School and has taken further post-graduate studies at Wharton, the
University of Pennsylvania.
Maida B. Bruce
Ms. Bruce joined MPIC in November 2009 and is responsible for strengthening and overseeing
the Financial Reporting, Budgeting & Forecasting and System enhancements processes. Prior to
joining MPIC, Maida held a CFO role with the top real estate company in the Philippines. She
was responsible for overseeing the financials of Ayala Landss Strategic Landbank Management
Group including its other subsidiaries. She has more than thirteen years of extensive experience in
the banking industry under Citigroup Australia and Manila. She was VP for Special Purpose
Vehicles under the Financial Control Department of Citigroup Australia and has handled several
roles and responsibilities also in Citibank Manila. She was part of a pioneer team that
implemented, supported and continuously upgraded a proprietary global financial reporting
system to multiple countries in the Asia-Pacific region.
Melody M. del Rosario

Ms. Del Rosario has been with the Metro Pacific Group since 1993, and has over 21 years of
experience heading MPICs public and media relations, corporate communications, advertising
and corporate social responsibility (CSR). In these various capacities, Ms. del Rosario is in charge
of strengthening the credibility and corporate public image of MPIC by planning and overseeing
the implementation of strategic corporate communication programs, handling reputation and crisis
management, as well as working closely with the corporate communication teams and CSR heads
of the group. Ms. del Rosario is also the Corporate Information Officer of MPIC for the
Philippine Stock Exchange and is a Trustee of the MPIC Foundation where she actively
implements institutional programs on education, economic empowerment and environmental
awareness.
Albert W. L. Pulido
Mr. Pulido has managed the Investor Relations function at Metro Pacific Investments Corporation
since the middle of 2009. In that span of time he and his team have managed the transition from
an IR perspective - to a truly public company via a public share re-launch in September 2009,
increased the number of analysts covering the stock from 3 to 16, managed updates to investors
on a primary share issuance of US$200 million in July 2011, US$150 million in January 2013 and
US$200 million in February 2015, and coordinated over 500 investor meetings over the past two
years. Prior to MPIC, Albert was with the NY offices of Lehman Brothers (now Barclays
Capital) from 2003 to 2008 in various capacities including: Creditor Relations, Financial Planning
& Analysis, Rating Agency Relationships and Consumer Deposit Platform Development. Before
this, he served as a business development officer for a couple of Philippine banks originating
corporate clients. He has an MBA from Erasmus University and is a graduate of De La Salle
University with a Bachelor of Science degree.
Karim G. Garcia
Mr. Garcia is responsible for new business expansion and integration into MPICs businesses. His
mandate is to increase shareholder value, by actively searching new business ventures, and
executing the development of PPP, Greenfield and M&A transactions, especially those with
synergies to existing business. Within the energy industry, Karim has over a decade worth of
experience. Initially, he was an oil trader for one of the largest independent fuel oil bunker service
companies. He then moved to Houston, Texas where he managed several international power
development projects, with a combined generation capacity of a 1000MW, from concept to
102
financial close. In addition, he also executed energy venture capital M&A deals in South East
Asia. Prior to joining MPIC, Karim was Vice President for Strategic Planning for Trans Asia Oil
and Energy Development Corporation, a Phinma Company, where he was responsible for the
development of power projects, and the acquisition of energy assets. In 2015, Karim was
instrumental in MPICs takeover of the LRT-1 system. Currently, he is leading our foray into
airports, and the development of additional rail projects, as well as other deregulated and scalable
infrastructure projects. He holds a Bachelors of Science in Business Administration, from the
Questrom School of Business at Boston University, and obtained a Masters of Business
Administration from the Marshall School of Business at the University of Southern California.
Santhea V. delos Santos

Ms. Delos Santos has over 18 years of extensive experience in finance, audit and Enterprise Risk
Management (ERM) combined. She joined MPIC in February 2007. As one of the early members
of MPIC Finance team, she set up the Companys processes in financial and management
reporting, planning, and budget. In 2014, she assumed the role of MPICs Chief Risk Officer. In
this position, she is responsible for the implementation of the ERM program of the holding
company and advocates adoption of the same across the Group. She has contributed in crafting
investment and funding strategies and in assessing key enterprise risks for the Group. The early
years in her career were spent at SGV & Co. where she gained her audit experience. She is a
Certified Public Accountant, a Certified Financial Consultant and a Certified Risk Manager.
Loudette M. Zoilo
Ms. Maliksi-Zoilo joined MPIC in September 2009. She currently heads MPIC HR and has been
instrumental in managing and improving the MPIC organizations People related Organizational
Strategies. She brings with her 18 years of Human Resources experience, gained from
PricewaterhouseCoopers where she was a Manager of the Global Human Resources Solutions
team, an HR Consulting team of the firm which services a vast array of industries including but
not limited to, Utilities, Consumer, Banking, Government, NGOs and others. Her project
exposure included HR Consulting, Risk Management and Process Improvement projects. She was
also part of the management team of Corporate Human Resources Group of Philamlife who
oversaw the HR function of almost 21 affiliates where she instituted improvements in policies and
procedures of the group. Prior to joining MPIC, she was the HR Head of Jollibee Worldwide
Services, a shared-service organization of the Jollibee Group of Companies.
Ricardo M. Pilares III

Mr. Pilares graduated Valedictorian from the Ateneo Law School in 2006 and passed the
Philippine Bar Examinations in 2007 with the second highest ranking. Before joining Metro
Pacific Investments Corporation in 2010, Mr. Pilares was an associate in ACCRA Law Offices,
and subsequently in Puno and Puno Law Offices, where he handled litigation cases and special
corporate projects for various clients. He also acts as legal counsel of the various subsidiaries of
MPIC. He is also a member of the faculty of the Ateneo Law School.
Melanie G. Bendijo
Ms. Bendijo has been with Metro Pacific Group since 2004 and has over 14 years of experience in
the field of Treasury and Fund Management. She is responsible for the Companys overall
Treasury Operations and Controls. She has been instrumental in various fund raising activities of
the Companys major investments, including securing a foreign loan to support our Don Muang
Tollway investment.
Armin F. Tulio-Uy
Ms. Tulio-Uy is responsible for the Companys overall accounting operations and financial
reporting compliance. She graduated cum laude from the University of the Philippines Diliman in
2000 and was a CPA board topnotcher in 2001. Before joining Metro Pacific Investments
103
Corporation in 2013, she was a Senior Director in SGV&Co. where she gained over 10 years of
experience in external audit. Aside from external audits, she was one of the team leaders of
SGVs Capital Markets Group responsible for assisting clients in cross border capital market
transactions and local initial public offerings. As a member of SGVs Accounting Standards
Group, she was a lead trainer for local and regional IFRS and US GAAP workshops. She has had
international assignments with Ernst & Young Hong Kong, Ernst & Young US and Shell Shared
Services India.
Maricris C. Aldover-Ysmael
Ms. Aldover Ysmael joined MPICs Investor Relations team in 2010. She is responsible for
developing and maintaining the financial models used in determining the Companys internal net
asset valuation. She has been an integral part of the IR function and directly assists the Head of
IR in investor conferences and meetings. These functions are designed to keep investors and
analysts updated on Company developments, growth opportunities, risks and challenges. Prior to
MPIC, Ms. Aldover Ysmael was an Associate Director in SGV&Co. specializing in Assurance
and Business Advisory Services. She has over 12 years of combined experience in investor
relations, finance and external audit. She holds a Bachelor of Science degree in Accountancy, a
Bachelor of Arts degree in Philosophy from De La Salle University Manila and is a Certified
Public Accountant.
Edward A. Tortorici
Mr. Tortorici has served in a variety of senior and executive management positions, including
Corporate Vice President for Crocker Bank and Managing Director positions at Olivetti
Corporation of America and Fairchild Semiconductor Corporation.
Mr. Tortorici subsequently founded EA Edwards Associates, an international management and

consulting firm specializing in strategy formulation and productivity improvement with offices in
USA, Europe and Middle East. In 1987, Mr. Tortorici joined First Pacific as an Executive
Director for strategic planning and corporate restructuring, and launched the Groups entry into
the telecommunications and technology sectors. Presently, he oversees corporate strategy for First
Pacific and guides the Groups strategic planning and corporate development activities. Mr.
Tortorici serves as a Commissioner of PT Indofood Sukses Makmur Tbk and as Director of Metro
Pacific Investments Corporation, Philex Mining Corporation, Maynilad Water Services, Inc., FEC
Resources Inc. of Canada and AIM-listed Forum Energy Plc.
Mr. Tortorici serves as a Trustee of the Asia Society Philippines and is on the Board of Advisors
of the Southeast Asia Division of the Center for Strategic and International Studies, a Washington
D.C. non-partisan think tank. He also served as a Commissioner of the U.S. ASEAN Strategy
Commission.
Antonio A. Picazo
Antonio A. Picazo is currently a Senior Partner of Picazo Buyco Tan Fider & Santos Law Offices.
He serves as a Director and/or Corporate Secretary of several large Philippine corporations,
including Metro Pacific Investments Corporation, a position he has held since 2006. He is
currently also a member of the Board of the PGH Medical Foundation, Haribon Foundation and
the Gerry Roxas Foundation.
Cristina S. Palma Gil-Fernandez

Cristina S. Palma Gil-Fernandez was appointed to the position of Assistant Corporate Secretary of
MPIC in May 2013. Atty. Palma Gil-Fernandez graduated with a Bachelor of Arts degree, Major
in History (Honors) from the University of San Francisco in 1989, and with a Juris Doctor degree,
second honors, from the Ateneo de Manila University in 1995. She is a Partner at Picazo Buyco
Tan Fider & Santos Law Offices and has over 20 years of experience in corporate and commercial
104
law, with emphasis on the practice areas of banking, securities and capital markets (equity and
debt), corporate reorganizations and restructurings and real estate. She currently serves as a
Corporate Secretary of several large Philippine corporations, including three (3) other publicly-
listed Philippine corporations.
Atty. Jose Jesus G. Laurel

Atty. Jose Jesus G. Laurel is currently the Corporate Governance Officer of MPIC following his
retirement as VP-Legal of the Company from 2010 to 2016. Prior to joining MPIC, Atty. Laurel
was Vice President for Legal and External Affairs, General Counsel and Corporate Secretary for
Petron Corporation and concurrently President of Petron Foundation. Before working for Petron,
he was Vice President for Corporate Services of Energy Development Corporation (EDC) where
he headed Legal, HR, Purchasing, Planning and Finance. Prior to EDC, he served at the Securities
and Exchange Commission (SEC) for 9 years as securities analyst, prosecutor, hearing officer and
as deputy executive director (General Counsel). Concurrent with the above positions, he also
served as Law Dean of Lyceum of the Philippines and law professor for 27 years at Ateneo de
Manila Law School. He graduated from Ateneo de Manila with degrees in A.B. Economics and
Law. He placed 6th in the 1981 bar. He also has a Master of Laws from Yale University.
The Company has no other significant employee other than its Executive Officers. None of the
aforementioned Directors or Executive Officers or persons nominated or chosen by the Company to
become Directors or Executive Officers is related to the others by consanguinity or affinity within the
fourth civil degree.
No Director has resigned or declined to stand for re-election to the Board of Directors since the date
of the last annual stockholders meeting due to disagreement with the Company on any matter relating
to the Companys operations, policies or practices.
None of the aforementioned Directors or Executive Officers is or has been involved in any criminal or
bankruptcy proceeding, or is or has been subject to any judgment of a competent court barring or
otherwise limiting his involvement in any type of business, or has been found to have violated any
securities laws during the past five (5) years and up to the latest date.
Item 10. Executive Compensation
The aggregate compensation paid in 2015 and 2016 and estimated to be paid in 2017, to the officers
of the Parent Company is set out below:
Names Position Year Salary Bonus Others

Manuel V. Pangilinan Chairman
Jose Ma. K. Lim President & CEO
David J. Nicol Chief Finance Officer
Maida B. Bruce VP Controller
Albert William L. Pulido* VP Investor Relations
Aggregate for above-named 2015 83,272,252 73,153,663 27,533,217
officers 2016 92,725,318 70,219,126 308,048,856
2017 (est.) 104,946,720 69,964,480 9,000,000
All Other Directors and 2015 78,550,519 87,167,959 -
Officers as a group excluding 2016 41,857,221 20,712,383 143,238,144
the above-named officers 2017 (est.) 42,000,000 24,000,000 1,200,000
*Transferred to MMI beginning January 1, 2017
The above executive officers are covered by standard employment contracts and employees
retirement plan and can be terminated upon appropriate notice.
105
Non-executive Directors are entitled to a per diem allowance of P
=50,000 for each attendance in
MPICs Regular Board meetings and P =30,000 for each attendance in MPICs Committee meetings.
The Parent Companys By Laws provide that, additionally, an amount equivalent to 1 percent of net
profit after tax shall be allocated and distributed amongst the directors of the Parent Company who are
not officers of MPIC or its subsidiaries and affiliates, in such manner as the Board may deem proper.
The amount paid to the directors in 2015 and estimated amount to be paid in the ensuing year are
included in the above tabulation. There are no other special arrangements pursuant to which any
director was compensated.
The aggregate number of options awarded to the Directors and Executive Officers are set out below:
Names Position Amount of Date of Exercise Market Expiration Date
Options Grant of the Price Price on
Options the Date
of Grant
Manuel V. Pangilinan Chairman
Jose Ma. K. Lim President/CEO
David J. Nicol CFO / Director
Edward A. Tortorici Executive Advisor
Augusto P. Palisoc, Jr. Executive Director
Ramoncito S. Fernandez Executive Director
Victorico P. Vargas Executive Director
Antonio A. Picazo Director/Corp. Sec.
Edward S. Go Ind Director
Artemio V. Panganiban Ind Director
Lydia B. Echauz Ind Director
Washington Z. SyCip Ind Director
Robert C. Nicholson Director
Ray C. Espinosa Director
Jose Noel C. dela Paz Vice President
Maida B. Bruce Vice President
Melody M. del Rosario Vice President
Albert L. Pulido Vice President
Jose Jesus G. Laurel Corporate
Governance Officer
Ferdinand G. Inacay Vice President
Reymundo S. Cochangco Vice President
Santhea V. delos Santos Asst. Vice President
Loudette M. Zoilo Asst. Vice President
Ricardo M. Pilares III Asst. Vice President
Melanie G. Bendijo Asst. Vice President
Armin F. Tulio-Uy Asst. Vice President
Maricris C. Aldover-Ysmael Asst. Vice President
Aggregate for above named 43,500,000 12/09/08 P2.12
= P2.10
= Jan. 2, 2013
directors/officers 43,500,000 03/10/09 =2.73
P =2.70
P March 10, 2013
59,500,000 07/02/10 =2.73
P =2.65
P July 2, 2015
10,000,000 12/21/10 =3.50
P =3.47
P Dec. 21, 2015
3,000,000 04/12/11 =3.66
P =3.70
P April 14, 2016
109,500,000 10/14/14 =4.60
P =4.59
P October 14, 2018
Others 17,500,000 12/09/08 =2.12
P =2.10
P Jan. 2, 2013
19,425,245 03/10/09 =2.73
P =2.70
P March 10, 2013
34,800,000 07/02/10 =2.73
P =2.65
P July 2, 2015
1,000,000 03/08/11 =3.53
P =3.53
P March 8, 2016
2,500,000 10/14/14 =4.60
P =4.59
P October 14, 2018
106
Under the terms of the first grant, fifty percent (50%) of the first tranche granted (61,000,000 option
shares) vested on January 2, 2009 and the remaining fifty percent (50%) of said first tranche vested
on the first (1st ) anniversary of the initial vesting date for such tranche or January 2, 2010. On the
other hand, fifty percent (50%) of the second tranche granted (62,925,245 option shares) vested on
March 10, 2009 and the remaining fifty percent (50%) of said second tranche likewise vested on the
first (1st ) anniversary of the initial vesting date for such tranche or March 10, 2010. Grantees of said
options may exercise in whole or in part their respective options at any time after vesting but prior to
the expiration of three (3) years after all of the option shares for such tranche have vested.
A second grant was issued on July 2, 2010 covering a total of 94,300,000 options, of which
62,500,000 options were granted to MPIC directors and officers while 31,800,000 were granted to
certain key personnel of MPICs subsidiaries and affiliates. Of the 62,500,000 options granted, 50%
vested on January 1, 2011 and the remaining 50% vested on January 1, 2012. Of the 31,800,000
granted, 30% vested on July 2, 2011, 35% will vest on July 2, 2012 and the remaining 35% will vest
on July 2, 2013. Options granted under this grant may be exercised at any time after vesting but prior
to expiration on July 2, 2015.
A third grant was subsequently issued on the following dates: (a) 10,000,000 option shares was
granted to an executive officer of an MPIC subsidiary of which 30% vested on August 1, 2011, 35%
will vest on August 1, 2012 and 35% will vest on August 1, 2013; (b) 1,000,000 option shares was
granted to senior management of an MPIC subsidiary of which 30% vested on March 8, 2012, 35%
will vest on March 8, 2013 and 35% will vest on March 8, 2014; and (c) 3,000,000 option shares was
granted to an MPIC officer of which 50% will vest on April 14, 2012 and the remaining 50% will vest
on April14, 2013. Options granted under this tranche may be exercised at any time after vesting but
prior to expiration of a period of five years from grant date.
A fourth grant was issued on October 14, 2013 covering a total of 112,000,000 options were granted
to MPIC directors and officers and certain key personnel of MPICs subsidiaries and affiliates. Of the
total 112,000,000 options granted, 50% will vest on October 14, 2014 and the remaining 50% will
vest on October 14, 2015. Options granted under this grant may be exercised at any time after vesting
but prior to expiration on October 14, 2018.
The foregoing options were granted pursuant to, and subject to the terms and conditions provided in,
the Executive Stock Option Plan of the Parent Company, as amended (the Plan). The procedure for
the exercise of such options is as set forth in the Plan.
Long-term Incentive Plan (LTIP)
Certain of the Companys employees are eligible for long-term employee benefits under a long-term
incentive plan. The liability recognized on the LTIP comprises the present value of the defined
benefit obligation and was determined using the projected unit credit method. Each LTIP
performance cycle generally covers 3 years (e.g., 2016 to 2018 for MPICs LTIP, 2016 to 2018 for
Maynilad's LTIP and 2015 to 2017 for MPTCs LTIP) with payment intended to be made at the end
of the each cycle (without interim payments) and is contingent upon the achievement of an approved
target core income of the Company by the end of the performance cycle. Each LTIP performance
cycle, upon endorsement of the Compensation Committee, is approved by the respective board of
directors of the entities of the Company.
On October 7, 2011, MPIC entered into an IMA with a Trustee Bank to fund the 2010-2012 LTIP
program. The LTIP fund will be expected to continue accumulating for the LTIP target payout. The
investment portfolio of IMA is limited to the following: securities issued, directly or indirectly, or
guaranteed by the government; and time deposit and money market placements issued by any of the
top 10 banks in the Philippines. As at December 31, 2016, the LTIP fund balance for the 2016-2018
107
LTIP program amounted to P
=46 million.
LTIP expense for the years ended December 31, 2016, 2015 and 2014 amounted to P =533 million,
=568 million and P
P =440 million, respectively, and presented as Personnel costs under General and
administrative expenses in the accompanying consolidated statements of comprehensive income.
LTIP liability as at December 31, 2016 and 2015 amounted to P =763 million and P=1,184 million,
respectively, and is presented under Accounts payable and other current liabilities and Other long-
term liabilities account in the accompanying consolidated statements of financial position.
Please see Notes 25 in the 2016 Audited Consolidated Financial Statements.
Restricted Stock Unit Plan (RSUP)
On July 14, 2016, the Compensation Committee of MPIC approved the RSUP as part of MPICs
LTIP. The RSUP, which has a validity period of ten (10) years, replaced the Parent Companys
ESOP, which will expire in 2018.
The RSUP is designed, among others, to reward the Directors and certain key officers of MPIC who
contribute to its growth to stay with MPIC for the long term. Under the RSUP, which shall have a
cycle of three (3) years starting 2016, MPIC, at its cost will reacquire MPIC common shares to be
held as treasury shares and reserved to be transferred to the Directors and key officers determined by
the Committee to be eligible to participate under the RSUP. Vested shares will be transferred in the
name of the eligible participants on full vesting date, at no cost as provided under the RSUP.
The RSUP also limits the aggregate number of shares that may be subject to award to no more than
three percent (3%) of the outstanding common shares of MPIC. For the first 3-year cycle (i.e., 2016 to
2018), MPIC will acquire up to 27.4 million common shares at such time and under such terms and
conditions as the Committee may determine.
A total of 27,400,000 shares (Share Award) under the RSUP were granted for the LTIP cycle 2016 to
2018. Fair value of the Share Award was determined using the market closing price of P =7.15 per
share on date of grant. One third (or 33.33%) of the share award vests every 31st of December
beginning 2016 until fully vested by December 31, 2018.
Total Share Award expense for the year ended December 31, 2016 amounted to P =67 million included
in Personnel costs under General and administrative expenses account in the consolidated
statements of comprehensive income.
Item 11. Security Ownership of Certain Record and Beneficial Owners and Management
Security Ownership of Record and Beneficial Owners of at least 5% of the Parent Companys
Securities as at March 31, 2017.
Name and address of Name of Beneficial

Type of record owner and Owner & No. of Shares Percent
Citizenship
Class relationship with Relationship with Held of class
Issuer Record Owner
Common Metro Pacific Holdings, Filipino MPHI is both record 13,222,948,170 41.94%
Shares Inc. and beneficial owner.
17/F Liberty Centre Mr. Manuel V.
Bldg. 104 H.V. dela Pangilinan is usually
Costa, Salcedo Vill., designated as its
Makati City representative, with
108
Name and address of Name of Beneficial
Type of record owner and Owner & No. of Shares Percent
Citizenship
Class relationship with Relationship with Held of class
Issuer Record Owner
authority to vote its
shares, at meetings of
shareholders.
Common PCD Nominee Foreign Public ownership 8,610,967,695 27.31%
Corporation*
Common PCD Nominee Filipino Public ownership 8,323,962,335 26.40%
Corporation*
Common GT Capital Holdings, Filipino GT Capital Holdings, 4,900,000,000 15.54%
Inc. ** Inc. is both record and
43/F GT Tower beneficial owner.
International, Ayala
Avenue cor. H.V. Dela
Costa Street, Makati
City
Class "A" Metro Pacific Holdings, Filipino MPHI is both record 9,128,105,319 100%
Preferred Inc. and beneficial owner.
Shares 17/F Liberty Centre Mr. Manuel V.
Bldg. 104 H.V. dela Pangilinan is usually
Costa, Salcedo Vill., designated as its
Makati City representative, with
authority to vote its
shares, at meetings of
shareholders.
*PCD Nominee Corporation is the registered owner of shares beneficially owned by participants in the Philippine Central Depositary, Inc.
(PCD), a private company organized to implement an automated book entry system of handling securities transactions in the Philippines.
Under the PCD procedures, when an issuer of a PCD-eligible issue will hold a stockholders meeting, the PCD shall execute a pro-forma
proxy in favor of its participants for the total number of shares in their respective principal securities account as well as for the total number
of shares in their client securities account. For the shares held in the principal securities account, the participant concerned is appointed as
proxy with full voting rights and powers as registered owner of such shares. For the shares held in the client securities account, the participant
concerned is appointed as proxy, with the obligation to constitute a sub-proxy in favor of its clients with full voting and other rights for the
number of shares beneficially owned by such clients. As at 31 March 2017, Deutsche Bank Manila Clients Acct., The Hongkong and
Shanghai Banking Corp. Ltd. Clients Acct. and China Banking Corporation Trust Group, participants of PCD, beneficially own
4,402,459,840 or 13.96%, 2,902,499,991 or 9.21% and 1,968,513,458 or 6.24%, respectively, of the Companys total outstanding shares.
** The total number of shares owned by GT Capital is 4,900,000,000 consisting of the 1,300,000,000 common shares directly owned by GT
Capital and the 3,600,000,000 common shares lodged with PCD and are beneficially owned by GT Capital.
Other than the abovementioned, MPIC has no knowledge of any person who, as at March 31, 2017,
was directly or indirectly the beneficial owner of, or who has voting power or investment power
(pursuant to a voting trust or other similar agreement) with respect to, shares comprising more than
five percent (5%) of MPICs outstanding common shares of stock.
109
Security Ownership of Management as at March 31, 2017
Amount and
Type nature of Percent
Name and Address of Owner Citizenship
of Class Beneficial of class
ownership
Manuel V. Pangilinan
Common 7/F Ramon Cojuangco Bldg. 4,250,001 Filipino 0.01%
Makati Avenue, Makati City
Jose Ma. K. Lim
Common 10/F MGO Bldg., Legazpi corner dela Rosa Streets, 18,500,001 Filipino 0.04%
Legazpi Village, Makati
David J. Nicol
Common 10/F MGO Bldg., Legazpi corner dela Rosa Streets, 8,250,001 Australian 0.03%
Augusto P. Palisoc, Jr.
Rodrigo E. Franco
Common Unit 10D Symphony Tower, 6 Sgt. Esguerra Street, 1 Filipino 0.00%
South Triangle, Quezon City
Edward S. Go
Unit 16-A Pacific Plaza Tower
Common 700,000 Filipino 0.00%
Fort Bonifacio, Bonifacio Global City
Taguig, Metro Manila
Lydia B. Echauz
Common Far Eastern University 30,000 Filipino 0.00%
N. Reyes St., Sampaloc, Manila
Artemio V. Panganiban
Common 1203 Acacia, Dasmarinas Village, 150,001 Filipino 0.00%
Makati City
Antonio A. Picazo
19/F Liberty Center
Common 1,001 Filipino 0.00%
104 H.V. dela Costa Street
Salcedo Village, Makati City
Alfred V. Ty
Common 20/F GT Tower Ayala Avenue, 1 Filipino 0.00%
Makati City
Ray C. Espinosa
Common 5/F Locsin Building, Ayala Avenue 5,000,001 Filipino 0.02%
Cor Makati Avenue, Makati City
Ramoncito S. Fernandez
Robert C. Nicholson
Common 24/F Two Exchange Square, 8 Connaught Place 1 British 0.00%
Central, Hong Kong
Francisco C. Sebastian
Common 454 Ma. Cristina St., Ayala Alabang Village, 100 Filipino 0.00%
Muntinlupa City
Albert F. Del Rosario
Common 116 Valero cor. Rufino Street, Salcedo Village, 12,966,624 Filipino 0.05%
Makati City, Metro Manila 1227
Washington Z. SyCip Filipino-
Common 1 0.00%
6760 Ayala Avenue, 1226 Makati City American
Aggregate for above named officers and directors 67,545,736
110
Changes in Control
MPIC is not aware of any voting trust agreements or any other similar agreements which may result in
a change in control of the Parent Company. No change in control of the Parent Company has
occurred since the beginning of last year.
Item 12. Certain Relationships and Related Party Transactions
Refer to Note 21 in the 2016 Audited Consolidated Financial Statements.
PART IV CORPORATE GOVERNANCE
Item 13. Part IV - Corporate Governance portion of the Annual Report
The Manual on Corporate Governance (MOCG) of the Parent Company details the standards by
which it conducts sound corporate governance that are coherent and consistent with relevant laws and
regulatory rules, and constantly strives to create value for its shareholders.
(A) Evaluation
In compliance with the MOCGs standard, evaluation is delegated to the Parent Companys
Corporate Governance Officer and Compliance Officer who are members of the Companys
senior management. The Corporate Governance Officer and the Compliance Officer are jointly
tasked with the monitoring of the Parent Companys compliance with its Code of Corporate
Governance and impositions of regulatory agencies. Atty. Jose Jesus G. Laurel, holds the
position of Corporate Governance Officer, while Atty. Ricardo M. Pilares III, AVP-Legal,
holds the position of Compliance Officer.
Ultimate responsibility for the Parent Companys adherence to its MOCG rests with its Board
of Directors, who also maintain five (5) committees, each charged with oversight into specific
areas of the Parent Companys business activities:
The Audit Committee (AC) is responsible for recommending the external auditor and
ensuring that non audit work does not compromise their independence. The AC also
approves the Internal Audit function and scope of work.
The Risk Management Committee (RMC) assists the Board in fulfilling its oversight
responsibilities over the Companys enterprise risk management policy and execution
of risk management strategies and practices including regulatory and ethical
compliance monitoring. The Committee investigates the risk exposures of the
Company and evaluates the steps the management is taking in managing and
controlling such exposures.
The Nominations Committee is charged with ensuring that membership to the Parent
Companys Board of Directors is filled by qualified members. The Nomination
Committee also ensures fair representation of independent members on the Board of
Directors by formulating screening policies to effectively review the qualification of
nominees for independent directors. On April 19, 2016, the Nomination Committee
and Corporate Governance Committee jointly approved the MPICs Guidelines on the
Search, Screening and Selection of Directors. The same was thereafter approved by the
Board on May 4, 2016.
The Compensation and Remuneration committee is tasked to ensure fair compensation
practices are adhered to throughout the organization.
111
The Corporate Governance Committee is tasked to ensure that the Parent Company
conducts its business following sound corporate governance principles and in
accordance with relevant laws and regulatory rules.
The Parent Companys AC has three (3) members, consisting of Mr. Edward S. Go, Ms. Lydia
B. Echauz and Mr. Alfred V. Ty. Mr. Edward S. Go, the Chairman of the AC, and Ms. Lydia
B. Echauz, are independent directors. Alfred V. Ty is a non-executive director.
The Parent Companys Nominations Committee has three (3) voting members consisting of
Mr. Edward S. Go (Chairperson), Ms. Lydia B. Echauz and Mr. Robert C. Nicholson. The
Corporations President and Chief Executive Officer, Mr. Jose Ma. K. Lim, sits as a non-voting
member of the Nominations Committee.
The Parent Companys Compensation Committee has three (3) members consisting of Ms.
Lydia B. Echauz (Chairperson), Mr. Albert F. Del Rosario and Mr. Manuel V. Pangilinan.
Finally, the Parent Company's Corporate Governance Committee has three (3) members
consisting of Justice Artemio V. Panganiban (Chairperson), Mr. Edward S. Go and Mr. Alfred
V. Ty.
Each of the five committees adopted its own Charter to guide the Committee members in the
performance of their functions and to formalize the applicable procedural mechanisms and
oversight function of each committee. All of the Charters were presented to and approved by
the Board.
(B) Measures Taken to Comply with Adopted Leading Practices on Good Corporate
Governance
Since its incorporation in 2016, the Board of Directors of the Parent Company held regular
meetings, each with a quorum. The Board committees regularly meet to ensure fair corporate
governance standards were being applied throughout the organization.
The Parent Companys Corporate Governance Manual, which was adopted by its Board of
Directors on September 6, 2006, was revised and amended on March 3, 2011 taking into
consideration the Revised Manual on Corporate Governance under Securities and Exchange
Commission (SEC) Memorandum Circular No. 6, Series of 2009. The same was likewise
amended on June 4, 2016 to substantially adopt the provisions of the SEC Memorandum
Circular No. 19, Series of 2016 (the Code of Corporate Governance for Publicly Listed
Companies.)
(C) Any Deviation from the Parent Companys Manual of Corporate Governance
The Parent Company is committed to fostering good corporate governance practices including
a clear understanding by directors of the Parent Companys strategic objectives, structures to
ensure that the objectives are being met, systems to ensure the effective management of risks,
and the mechanisms to ensure that the Parent Companys obligations are identified and
discharged in all aspects of its business. Each January, the Companys Compliance Officer
certifies to the SEC and the PSE that the Parent Company has fulfilled its corporate
governance obligations.
112
(D) Any Plan to Improve the Parent Companys Corporate Governance
The Parent Company continues to evaluate and review its Corporate Governance Manual to ensure
that the leading practices on good corporate governance are being adopted.
113
PART V EXHIBITS AND SCHEDULES
Item 14. Exhibits and Reports on SEC Form 17-C (Current Reports)
MPIC reported the following items on SEC Form 17-C for the year 2015:
Items Reported Date Filed

1 Notice of Award for Cebu Cordova Bridge Project January 05
2 LRMC signs P24B loan facility, EPC for LRT 1 Cavite Extension February 12
3 NLEX-SLEX Connector Road Project April 01
4 NLEX Corp issues Notice of Arbitration and Statement of Claim April 05
5 Issuance of Notice of Arbitration and Statement of Claim by Cavitex Infrastructure
April 15
Corporation
6 Signing of Joint Venture Agreement with Metro Iloilo Water District May 06
7 Completion of the acquisition by MetroPac Movers, Inc. (MMI), a subsidiary of
Metro Pacific Investments Corporation of the assets and key contracts of Basic
Logistics Corporation, A1Move Logistics, Inc., Philflash Logistics, Inc. and May 19
BasicLog Trading and Marketing Enterprises (Sellers), all of which are involved
in the logistics business.
8 MPIC forms strategic alliance with the GT Capital Group; and deepens
participation in the power sector with initial investment in Global Business Power - May 27
the leading power generator in Visayas
9 Execution of agreements for the issuance by Metro Pacific Investments Corporation
(MPI) of 3.6 Billion Common Shares to GT Capital Holdings, Inc. (GTCHI) May 27
and 4.1 Billion Class A Voting Preferred Shares to Metro Pacific Holdings, Inc.
10 Acquisition by Beacon PowerGen Holdings, Inc. (BPHI) from GT Capital
Holdings, Inc. (GTCHI) of common shares of stock in Global Business Power May 27
Corporation (GBPC).
11 MPIC acquires additional 25% interest in Beacon Electric thereby increasing its
May 30
overall economic interest in MERALCO to 41.2% and GBPC to 42%
12 Approval of the Restricted Stock Unit Plan as part of Metro Pacific Investments
July 14
Corporations Long Term Incentive Plan
13 No Comparative Proposals Submitted for the NLEx-SLEx Connector Road Project July 26
14 Completion of the acquisition of shares in Marikina Valley Medical Center, Inc.
July 29
(MVMC)
15 Clarification re Disclosure on the approval by the Securities and Exchange
August 12
Commission of the increase in authorized capital stock of MPIC
16 Purchase of MPI shares by Metro Pacific Investments Corporation September 02
17 Receipt by Metro Pacific Tollways Development Corporation and Manila North
Tollways Corporation of the Notice of Award from the Department of Public September 19
Works and Highways for the NLEX-SLEX Connector Road Project
18 Metro Pacific and DPWH fast track implementation of NLEX-SLEX Connector
September 27
Project.
19 Approval by the Board of Directors of Manila North Tollways Corporation
(NLEX Corporation ") of its merger with Tollways Management Corporation October 25
(TMC"), with NLEX Corporation as the surviving corporation.
20 Signing of the Concession Agreement for the NLEX-SLEX Connector Road by the
Republic of the Philippines and Manila North Tollways Corporation (NLEX November 24
Corporation).
21 Signing of a Joint Venture Agreement between Maynilad Water Services, Inc.
November 24
(Maynilad) and PT Moya Indonesia (Moya Indonesia).
22 Acquisition by Metro Pacific Tollways Development Corporation (MPTDC) of
December 28
additional shares of stock in Tollways Management Corporation (TMC).
114
INDEX TO FINANCIAL
STATEMENTS AND
SUPPLEMENTARY SCHEDULES
Item 16. Index to Financial Statements and Supplementary Schedules

i. Exhibit I - 2016 Audited Financial Statements
ii. Exhibit II - Supplementary Schedules
116
METRO PACIFIC INVESTMENTS CORPORATION
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY
SCHEDULES
FORM 17-A, Item 16
CONTENTS
Exhibit I - Audited Financial Statements
Statement of Management Responsibility for Financial Statements

Report of Independent Auditors
Consolidated Statements of Financial Position as at
December 31, 2016 and 2015
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2016, 2015, and 2014
Consolidated Statements of Changes in Equity for the years ended
December 31, 2016, 2015, and 2014
Consolidated Statements of Cash Flows for the years ended
December 31, 2016, 2015, and 2014
Notes to Consolidated Financial Statements
Exhibit II - Supplementary Schedules
Report of Independent Auditors on Supplementary Schedules

Schedule I. List of Philippine Financial Reporting Standards (PFRSs) effective as at
December 31, 2016 and List of New and Amended Standards and Interpretations and
Improvements to PFRS that became effective as at January 1, 2017
Schedule II. Financial Soundness Indicators
Schedule III. Retained Earnings Available for Dividend Declaration *
Schedule IV. Supplementary Schedules Required by Paragraph 6D, Part II
Under SRC Rule 68, As Amended (2011)
A. Financial Assets
B. Amounts Receivable from Directors, Officers, Employees, Related Parties
and Principal stockholders (Other than Related Parties)
C. Amounts Receivable from Related Parties which are Eliminated during the
Consolidation of Financial Statements
D. Intangible Assets- Other Assets
E. Long-term Debt
F. Indebtedness to Related Parties (Long-term Loans
from Related Companies)
G. Guarantees of Securities of Other Issuers
H. Capital Stock
Schedule V. MPIC Group Structure as of December 31, 2016
SEC Form 17- A 2016 Index to Financial Statements and Supplementary Schedules
EXHIBIT I
2016 AUDITED FINANCIAL

STATEMENTS
Metro Pacific Investments
Corporation and Subsidiaries
Consolidated Financial Statements

and Years Ended December 31, 2016, 2015
and 2014
and
Independent Auditors Report

SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 819 0872 December 14, 2015, valid until December 31, 2018
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-4 (Group A),
Philippines November 10, 2015, valid until November 9, 2018
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders

Metro Pacific Investments Corporation
Opinion
We have audited the consolidated financial statements of Metro Pacific Investments Corporation and its
subsidiaries (the Company), which comprise the consolidated statements of financial position as at
December 31, 2016 and 2015, and the consolidated statements of comprehensive income, consolidated
statements of changes in equity and consolidated statements of cash flows for each of the three years in
the period ended December 31, 2016, and notes to the consolidated financial statements, including a
summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Company as at December 31, 2016 and 2015, and its
consolidated financial performance and its consolidated cash flows for each of the three years in the
period ended December 31, 2016 in accordance with Philippine Financial Reporting Standards (PFRSs).
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditors Responsibilities for the Audit
of the Consolidated Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics)
together with the ethical requirements that are relevant to our audit of the consolidated financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
*SGVFS021831*
A member firm of Ernst & Young Global Limited
-2-
We have fulfilled the responsibilities described in the Auditors Responsibilities for the Audit of the
Consolidated Financial Statements section of our report, including in relation to these matters.
Accordingly, our audit included the performance of procedures designed to respond to our assessment of
the risks of material misstatement of the consolidated financial statements. The results of our audit
procedures, including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying consolidated financial statements.
Recoverability of goodwill and service concession assets (SCAs) not yet available for use
The Companys goodwill, mainly arising from its acquisition of long term investments in water and
tollways business, amounted to P =21.0 billion and this is allocated to different cash generating units
(CGUs). In addition, the Company has entered into several service concession agreements with the
Philippine Government and/or its agencies or instrumentalities, of which P =34.5 billion of these SCAs are
not yet available for use. Under Philippine Accounting Standard (PAS) 36, Impairment of Assets, the
Company is required to perform annual impairment test on the amount of goodwill and the SCAs not yet
available for use. These annual impairment tests are significant to our audit because the amounts are
material to the consolidated financial statements. In addition, the determination of the recoverable
amounts of the CGUs to which the goodwill belong or as it relates to the SCAs , involves significant
assumptions about the future results of business such as revenue growth and discount rates which are
applied to the cash flow forecasts. The assumptions on revenue growth mainly relates to the expected
volume of traffic for the toll roads, ridership for the rail, and billed water volume for the water
concession.
Refer to Note 12 to the consolidated financial statements for the details on goodwill and SCAs and the
assumptions used in the forecasts.
Audit response
We obtained an understanding of the Companys impairment assessment process and the related controls.
We also involved our internal specialist in evaluating the methodologies and the assumptions used. These
assumptions include the expected volume of traffic for the toll roads, ridership for the rail, billed water
volume for the water concession, growth rate and discount rates. We compared the forecast revenue
growth against the historical data of the CGUs and inquired from management and operations personnel
about the plans to support the forecast revenues. We also compared the Companys key assumptions such
as traffic volume, rail ridership and water volume against historical data and against available studies by
independent parties that were commissioned by the respective subsidiaries. We reviewed the weighted
average cost of capital (WACC) used in the impairment test by comparing it with WACC of other
comparable companies in the regions. Furthermore, we reviewed the Companys disclosures about those
assumptions to which the outcome of the impairment test is most sensitive, specifically those that have
the most significant effect on determining the recoverable amounts of the goodwill and SCAs not yet
available for use.
*SGVFS021831*
-3-
Amortization of SCAs using the units of production (UOP) method
The SCAs related to the toll roads and water concession agreements of the Company are being amortized
using the UOP method. For the toll roads concession assets, amortization is based on the ratio of the
actual traffic volume to the total expected traffic volume of the underlying toll expressways over the
remaining period of the concession agreement. On the other hand, the Company amortizes the water-
related concession asset based on the actual billed volume over the estimated billable water volume for
remaining period of the concession agreement. The UOP amortization method is a key audit matter as the
method involves significant management judgment and estimates, particularly in determining the total
expected traffic volume and the total estimated volume of billable water over the remaining periods of the
concession agreements. The Company reviews annually the total expected traffic volume with reference
to traffic projection reports and billable water volume with reference to water volume forecasts. It
considers different factors such as population growth, supply and consumption, and service coverage
including ongoing and future expansions.
Refer to Note 13 to the consolidated financial statements for the details of SCAs and Note 3 for the
discussion of management estimate relating to amortization of SCAs.
Audit response
We obtained an understanding of managements processes and controls in the estimation of billable water
and traffic volume. We evaluated the competence, capabilities, and objectivity of managements
specialists who estimated the forecasted volumes. We also reviewed the report of the managements
specialists and gained an understanding of the methodology and the basis of computing the forecasted
volumes. Furthermore, we compared the billable water volume and traffic volume during the year against
the data generated from the billing system for water and from the toll collection system for tollways. We
recalculated the amortization expense for the year and the SCAs as of year-end based on the established
billable water volume and traffic volume.
Accounting for acquisitions of a new associate and a group of logistics assets
In 2016, the Company, through the joint venture Beacon Electric Asset Holdings, Inc., acquired a
majority interest in Global Business Power Corporation (GBPC) for = P22.0 billion. In addition, the
Company, through its subsidiary MetroPac Movers, Inc., also acquired a group of logistics assets from
various sellers for P=2.2 billion. The Company accounted for these acquisitions as business acquisitions.
The provisional goodwill arising from these business acquisitions amounted to P =3.9 billion for the
interest in GBPC and = P1.1 billion for the logistics assets. The goodwill on the acquisition of GBPC is
subsumed under the investment account. These transactions are significant to our audit as these are new
and major acquisitions during the year and the amounts are material to the consolidated financial
statements. In addition, accounting for these acquisitions required significant management judgment and
estimates. These include determining whether the transaction is an acquisition of a business or an
acquisition of assets, and allocating the purchase consideration to the assets acquired and liabilities
assumed based on fair values and the Companys share in the net fair value of the investees identifiable
assets and liabilities.
Refer to Notes 4 and 11 to the consolidated financial statements for details of the acquisitions and Note 3
for the discussion of management judgment relating to the acquisitions.
*SGVFS021831*
-4-
Audit response
We evaluated managements judgment on whether these acquisitions qualify as businesses or assets by

reference to the purchase agreements and documents related to these acquisitions. We reviewed the
identification of the underlying assets and liabilities of the investees based on our understanding of the
businesses and existing customers contracts. Where the Company used its specialists to perform the
purchase price allocation and involved them in the valuation of customer contracts, or engaged
independent appraisers to value the property and equipment, we assessed the competence, capabilities,
and objectivity of such Company specialists and the independent appraisers. We also involved our
internal specialists in reviewing the valuation methodology and key inputs, such as revenue growth,
margins and discount rates related to the valuation of customer contracts. We compared the revenue
growth and margins to the historical performance of the investees. We tested the parameters used in the
determination of the discount rate against market data. We also reviewed the disclosures in the notes to
the consolidated financial statements.
Provisions and contingencies
The Company is involved in certain proceedings for which the Company has recognized provisions for
probable costs and/or expenses, which may be incurred, and/or has disclosed relevant information about
such contingencies. This matter is significant to the audit because the assessment of potential outcome or
liability involves significant management judgment and estimation. Notes 17 and 32 to the consolidated
financial statements provide the relevant disclosures related to this matter.
Audit response
Our audit procedures included understanding the Company's processes and controls over the
identification and evaluation of regulatory proceedings. We involved our internal specialist in evaluating
managements assessment on whether provisions on the contingencies should be recognized, and the
estimation of such amount. We also discussed with management the status of the regulatory proceedings
and dispute arbitration. In addition, we obtained correspondences with the relevant government agencies,
including tax authorities, replies from third party legal counsels, and any relevant historical and recent
judgments issued by the courts/tax authorities on similar matters.
West Service Area water and sewerage service revenue recognition
About 45% of the Companys consolidated revenues comprises water and sewerage service revenues
from the Metropolitan Waterworks and Sewerage System (MWSS) West Service Area. The recognition
of water and sewerage service revenues involves processing large volumes of data from multiple
locations. Different rates apply to different customers that are classified as residential, semi-business,
commercial or industrial. The billing rates for each class of customers depend on the customer type and
are determined using the formula provided in the service concession agreement and regulated by the
MWSS Regulatory Office. This matter is significant to our audit because water and sewerage service
revenues depend on the completeness of data captured during monthly meter readings, which occur on
different billing cut-off dates for different customers; the propriety of the application of rates to billable
consumption; and the reliability of the systems involved in processing bills and recording revenues.
*SGVFS021831*
-5-
Audit response
We obtained an understanding of the water and sewerage service revenue process, which includes
maintaining the customer database, capturing billable water consumption, uploading captured billable
water consumption to the billing system, calculating billable amounts based on MWSS approved rates,
and uploading data from the billing system to the financial reporting system. We also evaluated the design
of and tested the relevant controls over this process. In addition, we performed test recalculation of the
billed amounts using the MWSS approved rates and formulae, and compared them with the amounts
reflected in the billing statements. Moreover, we involved our internal specialist in performing the
aforementioned procedures on the automated aspects of this process.
Investment in a significant associate
The Company has an investment in Manila Electric Company (Meralco) that is accounted for under the
equity method. For the year ended December 31, 2016, the Companys effective share in the net income
of Meralco amounted to = P5.4 billion and accounts for 32% of the Companys consolidated net income.
The Companys share in Meralcos net income is significantly affected by Meralcos revenue from the
sale of electricity which arise from its service contracts with a large number of customers who are
classified as either commercial, industrial or residential customers. Note 32 provides relevant disclosures
related to the rate-making regulations and regulatory policies of the Energy Regulatory Commission
(ERC). The revenue recognized depends on (a) the complete capture of electric consumption based on the
meter readings over the franchise area taken on various dates; (b) the propriety of rates computed and
applied across customer classes; and (c) the reliability of the information technology (IT) systems
involved in processing the billing transaction.
In addition, the Companys share in Meralcos net income is also significantly affected by Meralcos
recognition of provisions for probable costs and/or expenses. The assessment of the potential outcome or
liability involves significant management judgment and estimation. Note 32 to the consolidated financial
statements provides the relevant disclosures related to this matter.
Audit response
We obtained the consolidated financial information of Meralco for the year ended December 31, 2016
and performed recomputation of the Companys equity in net earnings of Meralco. We obtained an
understanding of and evaluated the design and tested the controls over the customer master file
maintenance, accumulation and processing of meter data, and interface of data from the billing system to
the financial reporting system. In addition, we performed test recalculation of the billed amounts using
the ERC approved rates and formulae, actual costs incurred, and compared them with the amounts
reflected in the billing statements. We involved our internal specialist in understanding the IT processes
and in understanding and testing of the IT general controls over the IT systems supporting the revenue
process.
*SGVFS021831*
-6-
We evaluated managements assessment of the possible outcomes and the related estimates of the
probable costs and/or expenses that are recognized. In addition, we evaluated the input data supporting
the assumptions used, such as tariffs, tax rates, historical experience, regulatory rulings and other
developments, against Meralcos internal and external data, and performed recalculations and inspection
of relevant supporting documents.
Other Information
Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report
for the year ended December 31, 2016, but does not include the consolidated financial statements and our
auditors report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and
Annual Report for the year ended December 31, 2016 are expected to be made available to us after the
date of this auditors report.
Our opinion on the consolidated financial statements does not cover the other information and we will not
express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the other
information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audits, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with PFRSs, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
*SGVFS021831*
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As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Companys ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditors
report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditors report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the audit. We
remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
*SGVFS021831*
-8-
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditors report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors report is Marydith C. Miguel.
SYCIP GORRES VELAYO & CO.
Marydith C. Miguel
Partner
CPA Certificate No. 65556
SEC Accreditation No. 0087-AR-4 (Group A),
May 1, 2016, valid until May 1, 2019
Tax Identification No. 102-092-270
BIR Accreditation No. 08-001998-55-2015,
February 27, 2015, valid until February 26, 2018
PTR No. 5908731, January 3, 2017, Makati City
March 1, 2017
*SGVFS021831*
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December 31
2016 2015
Noncurrent Liabilities
Noncurrent portion of:
Provisions (Note 17) P
=239 =263
P
Service concession fees payable (Notes 18, 35 and 36) 28,000 25,188
Long-term debt (Notes 19, 35 and 36) 93,219 83,433
Due to related parties (Notes 21, 35 and 36) 6,726
Deferred tax liabilities (Note 29) 3,925 4,610
Other long-term liabilities (Notes 20, 35 and 36) 4,368 3,996
Total Noncurrent Liabilities 136,477 117,490
Total Liabilities 163,521 151,403
Equity (Note 22)

Owners of the Parent Company:
Capital stock 31,619 27,935
Additional paid-in capital 68,438 49,980
Treasury shares (167)
Equity reserves 6,282 6,248
Retained earnings 43,889 35,149
Other comprehensive income reserve 1,971 510
Total equity attributable to owners of the Parent Company 152,032 119,822
Non-controlling interest 36,049 30,955
Total Equity 188,081 150,777
P
=351,602 =
P302,180
See accompanying Notes to Consolidated Financial Statements.
*SGVFS021831*
METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Millions, Except Earnings Per Share Figures)
Years Ended December 31

2016 2015 2014
OPERATING REVENUES
Water and sewerage services revenue P
=20,280 =19,098
P =18,363
P
Toll fees 11,902 9,691 8,641
Hospital revenue 8,967 7,553 6,828
Rail revenue 3,016 897
Logistics and other revenue 655
44,820 37,239 33,832
COST OF SALES AND SERVICES (Note 23) (18,370) (14,026) (13,082)
GROSS PROFIT 26,450 23,213 20,750
General and administrative expenses (Note 24) (9,062) (8,047) (6,823)
Interest expense (Note 26) (5,328) (4,925) (4,301)
Share in net earnings of equity method investees (Note 11) 6,808 5,014 3,167
Interest income (Note 26) 417 460 385
Construction revenue and other income (Note 27) 20,670 14,606 8,491
Construction costs and other expenses (Note 27) (19,018) (13,422) (7,887)
INCOME BEFORE INCOME TAX 20,937 16,899 13,782
PROVISION FOR INCOME TAX (Note 29)
Current 4,091 1,522 1,160
Deferred 67 303 48
4,158 1,825 1,208
NET INCOME 16,779 15,074 12,574
OTHER COMPREHENSIVE INCOME (OCI) (Note 28)
Net OCI to be reclassified to profit or loss
in subsequent periods 444 (222) (24)
Net OCI not to be reclassified to profit or loss
in subsequent periods 1,024 (133) (52)
1,468 (355) (76)
TOTAL COMPREHENSIVE INCOME P
=18,247 =
P14,719 =
P12,498
Net income attributable to:
Owners of the Parent Company P
=11,456 =9,546
P =7,940
P
Non-controlling interest 5,323 5,528 4,634
P
=16,779 =15,074
P =12,574
P
Total comprehensive income attributable to:
=12,917 =9,220
P =7,849
P
Non-controlling interest 5,330 5,499 4,649
P
=18,247 =14,719
P =12,498
P
EARNINGS PER SHARE (Note 30)
Basic Earnings Per Common Share, Attributable
to Owners of the Parent Company P
=0.3810 =
P0.3447 =
P0.3047
Diluted Earnings Per Common Share, Attributable
to Owners of the Parent Company P
=0.3806 =
P0.3445 =
P0.3044
*SGVFS021831*
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
(Amounts in Millions)
Year Ended December 31, 2016

Attributable to Owners of the Parent Company
Other
Additional Comprehensive Non-
Paid-in Treasury Equity Retained Income controlling
Capital Stock Capital Shares Reserves Earnings Reserve Interest (NCI) Total
(Note 22) (Note 22) (Note 22) (Note 22) (Note 22) (Note 22) Total (Note 22) Equity
At January 1, 2016 P
=27,935 P
=49,980 P
= P=6,248 P
=35,149 P
=510 P
=119,822 P
=30,955 P
=150,777
Total comprehensive income for the year:
Net income 11,456 11,456 5,323 16,779
Other comprehensive income (Note 28) 1,461 1,461 7 1,468
Issuance of shares
Common shares 3,600 18,360 21,960 21,960
Preferred shares 41 41 41
Transaction costs on issuance of shares (84) (84) (84)
Executive Stock Option Plan (Note 31) 43 182 (33) 192 192
Restricted Stock Unit Plan (Note 31) 67 67 67
Treasury shares (167) (167) (167)
Cash dividends declared (Note 22) (2,716) (2,716) (2,716)
Business combinations and other movements in NCI (Note 4) 1,401 1,401
Dividends declared to non-controlling stockholders (Note 6) (1,637) (1,637)
At December 31, 2016 P
=31,619 P
=68,438 (P
= 167) P
=6,282 P
=43,889 P
=1,971 P
=152,032 P
=36,049 P
=188,081
*SGVFS021831*
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Additional Other
Paid-in Equity Retained Comprehensive Non-controlling
Capital Stock Capital Reserves Earnings Income Reserve Interest (NCI)
(Note 22) (Note 22) (Note 22) (Note 22) (Note 22) Total (Note 22) Total Equity
At January 1, 2015 =
P26,096 =
P42,993 =
P6,245 =
P27,525 =
P836 =
P103,695 =
P25,877 =
P129,572
Net income 9,546 9,546 5,528 15,074
Other comprehensive income (Note 28) (326) (326) (29) (355)
Executive Stock Option Plan (ESOP) (Note 31):
Exercise of stock option 27 78 (30) 75 75
Cost of ESOP 21 21 21
Expiration of ESOP 10 (15) 5
Equity raising (Note 22) 1,812 6,899 8,711 8,711
Additional investment from NCI 1,125 1,125
Gain on acquisition of NCI and others (Notes 4 and 22) 27 27 47 74
At December 31, 2015 =
P27,935 =
P49,980 =
P6,248 =
P35,149 =
P510 =
P119,822 =
P30,955 =
P150,777
*SGVFS021831*
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Additional Other
Paid-in Equity Retained Comprehensive Non-controlling
Capital Stock Capital Reserves Earnings Income Reserve Interest (NCI)
(Note 22) (Note 22) (Note 22) (Note 22) (Note 22) Total (Note 22) Total Equity
At January 1, 2014 =
P26,076 =
P42,933 =
P2,643 =
P21,882 =
P927 =
P94,461 =
P18,819 =
P113,280
Net income 7,940 7,940 4,634 12,574
Other comprehensive income (Note 28) (91) (91) 15 (76)
Total comprehensive income 7,940 (91) 7,849 4,649 12,498
Executive Stock Option Plan (ESOP) (Note 31):
Exercise of stock option 20 60 (21) 59 59
Cost of ESOP 64 64 64
Gain on sale to NCI (Note 22) 5,967 5,967 3,509 9,476
Acquisition of NCI (Note 22) (2,408) (2,408) (787) (3,195)
Other changes in NCI (Note 33) 732 732
At December 31, 2014 =
P26,096 =
P42,993 =
P6,245 =
P27,525 =
P836 =
P103,695 =
P25,877 =
P129,572
*SGVFS021831*
CONSOLIDATED STATEMENTS OF CASH FLOWS

2016 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P
=20,937 =16,899
P =13,782
P
Adjustments for:
Interest expense (Note 26) 5,328 4,925 4,301
Amortization of service concession assets (Note 23) 3,679 3,317 2,958
Depreciation and amortization
(Notes 14, 15, 23 and 24) 1,334 1,076 1,049
Share in net earnings of equity method investees
(Note 11) (6,808) (5,014) (3,167)
Dividend income (Note 27) (1,353) (580) (471)
Interest income (Note 26) (417) (460) (385)
Unrealized foreign exchange loss (gain) - net 2 149 (230)
Gain on sale of AFS financial asset (Note 27) (222)
Others 368 724 472
Operating income before working capital changes 23,070 21,036 18,087
Increase in:
Restricted cash (18) (47) (540)
Receivables (694) (574) (934)
Due from related parties and other current assets (604) (1,309) (223)
Increase (decrease) in:
Accounts payable and other current liabilities 729 699 (1,532)
Provisions and accrued retirement cost 48 (348) 890
Net cash generated from operations 22,531 19,457 15,748
Income taxes paid (4,042) (1,359) (1,166)
Interest received 429 446 603
Net cash from operating activities 18,918 18,544 15,185
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received from:
Equity method investees (Note 11) 5,679 2,283 533
AFS financial asset (Note 10) 136 121 66
Beacon Electrics preferred shares (Note 11) 405 405
Collection of or proceeds from sale/disposal of:
Available-for-sale financial assets (Note 10) 14,679 21,618 1,320
Property and equipment (Note 14) 21 7 21
Notes receivable (Note 8) 118
Acquisition of subsidiaries, net of cash acquired
(Note 4) (4,812)
(Forward)
*SGVFS021831*
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2016 2015 2014
Additions to/issuance of:
Investments in equity method investees (Note 11) (P
=21,587) (P
=28,194) (P
=6,329)
Service concession assets (Note 13) (17,757) (21,448) (6,678)
Available-for-sale financial assets (Note 10) (13,823) (17,801) (4,351)
Property and equipment (Note 14) (2,536) (1,568) (1,508)
Deferred project cost (Note 15) (125) (129) (1,869)
Decrease (increase) in short-term deposits 3,048 (3,095) 633
Increase in other noncurrent assets (38) (224) (1,270)
Net cash used in investing activities (37,115) (47,907) (19,027)
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt of or proceeds from:
Issuance of shares (Notes 22 and 31) 22,193 8,954 61
Long-term debt (Note 19) 13,415 33,476 13,905
Contribution from non-controlling stockholders
and other movements (Notes 4 and 33) 777 1,125 698
Sale to non-controlling stockholders (Note 22) 10,108
Payments of/for:
Due to related parties (4,243) (12)
Interest and other financing charges (4,155) (3,799) (3,215)
Long-term debt (Note 19) (4,030) (6,757) (3,677)
Dividends paid to owners of the Parent Company
(Note 22) (2,716) (1,927) (2,297)
Dividends paid to non-controlling stockholders
(Notes 6 and 22) (2,050) (1,468) (1,178)
Service concession fees payable (Note 18) (1,209) (1,094) (1,184)
Debt issuance cost (Note 19) (516) (178) (162)
Treasury shares (Note 22) (167)
Transaction costs on issuance of shares (84) (168)
Acquisition of non-controlling interests (Note 4) (32) (57) (3,116)
Net cash from financing activities 17,183 28,107 9,931
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,014) (1,256) 6,089
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR (Note 7) 16,469 17,725 11,636
CASH AND CASH EQUIVALENTS
AT END OF YEAR (Note 7) P
=15,455 =
P16,469 =
P17,725
*SGVFS021831*
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
General
Metro Pacific Investments Corporation (the Parent Company or MPIC) was incorporated in the
Philippines and registered with the Philippines Securities and Exchange Commission (SEC) on
March 20, 2006 as an investment holding company. MPICs common shares of stock are listed in
and traded through the Philippine Stock Exchange (PSE). On August 6, 2012, MPIC launched
Sponsored Level 1 American Depositary Receipt (ADR) Program with Deutsche Bank as the
appointed depositary bank in line with the Parent Companys thrust to widen the availability of its
shares to investors in the United States.
The principal activities of the Parent Companys subsidiaries and equity method investees are
described below (see below Companys Operating Segments) and in Notes 11 and 42. The Parent
Company and its subsidiaries are collectively referred to as the Company.
Metro Pacific Holdings, Inc. (MPHI) owns 41.9% of the total issued common shares (or 42.0% of
the total outstanding common shares) and 52.1% of the total issued and outstanding common
shares of MPIC as at December 31, 2016 and 2015, respectively. The reduction in the ownership
interest resulted from GT Capital Holdings, Inc.s (GTCHI) acquisition of 1.3 billion MPIC
common shares from MPHI on May 27, 2016. On the same date, MPIC entered into a Share
Subscription Agreement with GTCHI for the subscription by GTCHI of 3.6 billion common
shares in MPIC. As sole holder of the voting Class A Preferred Shares, MPHIs combined voting
interest as a result of all of its shareholdings is estimated at 55.0% as at December 31, 2016
(see Note 22).
MPHI is a Philippine corporation whose stockholders are Enterprise Investment Holdings, Inc.
(EIH; 60.0% interest), Intalink B.V. (26.7% interest) and First Pacific International Limited (FPIL;
13.3% interest). First Pacific Company Limited (FPC), a company incorporated in Bermuda and
listed in Hong Kong, through its subsidiaries, Intalink B.V. and FPIL, holds 40.0% equity interest
in EIH and investment financing which under Hong Kong Generally Accepted Accounting
Principles, require FPC to account for the results and assets and liabilities of EIH and its
subsidiaries as part of FPC group of companies in Hong Kong.
The registered office address of the Parent Company is 10th Floor, MGO Building, Legaspi corner
Dela Rosa Streets, Legaspi Village, Makati City.
The accompanying consolidated financial statements as at December 31, 2016 and 2015 and for
each of the three years in the period ended December 31, 2016 were approved and authorized for
issuance by the Board of Directors (BOD) on March 1, 2017.
Companys Operating Segments

services and products:
Water, which relates to the provision of water and sewerage services by Maynilad Water
Holding Company, Inc. (MWHC) and its subsidiaries Maynilad Water Services, Inc.
(Maynilad) and Philippine Hydro, Inc. (PHI), and other water-related services by MetroPac
Water Investments Corporation (MPWIC) (see below Concession Arrangements).
*SGVFS021831*
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Toll operations, which primarily relate to operations and maintenance of toll facilities by
Metro Pacific Tollways Corporation (MPTC) and its subsidiaries NLEX Corporation (NLEX
Corp; formerly Manila North Tollways Corporation) and Cavitex Infrastructure Corporation
(CIC), and associates, Tollways Management Corporation (TMC), CII Bridges and Roads
Investment Joint Stock Company (CII B&R) and Don Muang Tollway Public Ltd (DMT).
Certain toll projects are either under pre-construction or on-going construction as at
March 1, 2017 (see below Concession Arrangements).
Power, which primarily relates to the operations of Manila Electric Company (MERALCO) in
relation to the distribution, supply and generation of electricity and Global Business Power
Corporation (GBPC) in relation to power generation. The investment in MERALCO is held
both directly and indirectly through Beacon Electric Asset Holdings, Inc. (Beacon Electric)
while the investment in GBPC held through Beacon Electrics wholly-owned entity, Beacon
PowerGen Holdings Inc. (BPHI) (see Note 11).
Healthcare, which primarily relates to operations and management of hospitals and nursing
colleges and such other enterprises that have similar undertakings by Metro Pacific Hospital
Holdings, Inc. (MPHHI).
Rail, which primarily relates to Metro Pacific Light Rail Corporation (MPLRC) and its
subsidiary, Light Rail Manila Corporation (LRMC), the concessionaire for the operations and
maintenance of the Light Rail Transit (LRT) and construction of the LRT-1 south extension
(see below Concession Arrangements).
Logistics, which primarily relates to the Companys logistics business through MetroPac
Logistics Company, Inc. (MPLC) and its subsidiary, MetroPac Movers, Inc. (MMI).
Others, which represent holding companies and operations of subsidiaries and other investees
involved in real estate and provision of services.
See Note 42 for the complete list of the Companys subsidiaries. The list of the Companys
associates and joint ventures are disclosed in Note 11.
Concession Arrangements
MPICs subsidiaries have the following concession arrangements with the Philippine Government:
Concession Arrangements - Water

Maynilad. In February 1997, Maynilad entered into a concession agreement with Metropolitan
Water Sewerage System (MWSS), with respect to the MWSS West Service Area. Under the
concession agreement, MWSS grants Maynilad, the sole right to manage, operate, repair,
decommission and refurbish all fixed and movable assets required to provide water and sewerage
services in the West Service Area for 25 years ending in 2022. In September 2009, MWSS
approved an extension of its concession agreement with Maynilad for another 15 years to 2037
(the expiration date). The legal title to all property, plant and equipment contributed to the
existing MWSS system by Maynilad during the concession period remains with Maynilad until the
expiration date at which time, all rights, titles and interests in such assets will automatically vest to
MWSS. Under the concession agreement, Maynilad is entitled to charge its customers a Basic
Standard tariff which is calculated to enable Maynilad to recover all expenditures efficiently and
prudently incurred, including Philippines business taxes and concession fees while also providing
Maynilad a real rate of return on the net cash sum invested in the concession from time to time.
This tariff is subject to periodic changes due principally to (a) an annual standard rate adjustment
*SGVFS021831*
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to compensate for changes in the consumer price index (CPI) subject to a rate adjustment limit;
(b) an extraordinary price adjustment to account for the financial consequences of the occurrence
of certain unforeseen events subject to grounds stipulated in the concession agreement; and
(c) a rate rebasing mechanism which allows rates to be adjusted every five years. The rate rebasing
adjustment allows for updates to estimates for expenditures and demand forecasts while also
resetting the real rate of return awarded to Maynilad in light of changes to costs of funding. Under
Maynilads concession agreement with the Philippine Government, any rate adjustment requires
approval by MWSS and the Regulatory Office (RO).
The Republic of the Philippines (ROP) also issued in favor of Maynilad on July 31, 1997 and
March 17, 2010 an undertaking which provides, among other things, that the ROP shall indemnify
Maynilad in respect of any loss that is occasioned by a delay caused by the ROP or any
government-owned agency in implementing any increase in the standard rates beyond the date for
its implementation in accordance with the concession agreement (the Undertaking).
Other material commitments under Maynilads concession agreement are disclosed in Note 33.
PHI. In August 2012, Maynilad acquired a 100% interest in PHI, which engages in water
distribution business in certain areas in central and southern Luzon. PHI is granted the sole right
to distribute water in these areas under certain concession agreements granted by the Philippine
government for 25 years to 2035.
Metro Iloilo Bulk Water Supply Corporation (MIBWSC). On July 4, 2016, pursuant to a Joint
Venture Agreement between MetroPac Iloilo Holdings Corporation (MILO; a wholly owned
subsidiary of MPWIC), and Metro Iloilo Water District (MIWD), created and established
MIBWSC, to implement the 170 Million Liters per Day (MLD) Bulk Water Supply Project (BWS
Project). The BWS Project covers the (i) rehabilitation and upgrading of MIWDs existing 55
MLD water facilities, (ii) the expansion and construction of new water facilities to increase
production to up to 115 MLD; and (iii) delivery of contracted water demand to MIWD in
accordance with the bulk water supply agreement. The BWS Project covers a period from the
later of the Target Initial Delivery Date and the Initial Delivery Date and ending on the 25th
anniversary thereof and shall be extended for an additional 25 years counted from completion of
the agreed upon expansion obligation, but in no event shall exceed an aggregate of 50 years. As at
March 1, 2017, the parties have yet to agree on the Target Initial Delivery Date.
MIWD retains ownership of the existing facilities subject to the right of MIBWSC to access and
use. MIBWSC in turn retains ownership of the new facilities but is required to handback the
Project, including transfer of the full ownership of the new facilities, at the end of the contract
period.
On July 5, 2016, MIBWSC officially took over operations from the MIWD.
Concession Arrangements Toll Operations
NLEX Corp Supplemental Toll Operation Agreement (STOA) for the North Luzon Expressway
(NLEX). In August 1995, First Philippine Infrastructure Development Corporation, the then
parent company of NLEX Corp, entered into a joint venture agreement with Philippine National
Construction Corporation (PNCC), in which PNCC assigned its rights, interests and privileges
under its franchise to construct, operate and maintain toll facilities in the NLEX and its extensions,
stretches, linkages and diversions in favor of NLEX Corp, including the design, funding,
construction, rehabilitation, refurbishing and modernization and selection and installation of an
appropriate toll collection system therein during the concession period subject to prior approval by
the President of the Philippines. In April 1998, the Philippine government, acting by and through
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the Toll Regulatory Board (TRB) as the grantor, PNCC as the franchisee and NLEX Corp as the
concessionaire, executed a STOA whereby the Philippine government recognized and accepted the
assignment by PNCC of its usufructuary rights, interests and privileges under its franchise in favor
of NLEX Corp as approved by the President of the Philippines and granted NLEX Corp
concession rights, obligations and privileges including the authority to finance, design, construct,
operate and maintain the NLEX project roads as toll roads commencing upon the date the STOA
comes into effect until December 31, 2030 or 30 years after the issuance of the Toll Operation
Permit for the last completed phase, whichever is earlier. In October 2008, the concession
agreement was extended for another seven years to 2037.
The concession agreement establishes a toll rate formula and adjustment procedure for setting the
appropriate toll rate. Pursuant to the STOA, NLEX Corp is required to pay franchise fees to
PNCC (see Notes 23 and 33) and to pay for the governments project overhead expenses based on
certain percentages of construction costs and maintenance works on the project roads. Upon
expiry of the concession period, NLEX Corp shall hand over the project roads to the Philippine
Government without cost, free from any and all liens and encumbrances and fully operational and
in good working condition, including any and all existing land required, works, toll road facilities
and equipment found therein directly related to and in connection with the operation of the toll
road facilities.
The Manila-North Expressway Project (MNEP) consists of three (3) phases as follows:
Status/
Phase Description Date of Operation
Phase I Expansion and i. 84 kilometers (km) of the existing NLEX February 5, 2005
(Segments 1, 2, 3 and 7) rehabilitation ii. 8.8-km stretch of a Greenfield
expressway
Phase II Construction i. 17-km circumferential road C-5 which Segment 8.1
(Segments 8.1, 8.2, 9 and 10) connects the current C-5 expressway to June 5, 2010
the NLEX
ii. 5.85-km road from McArthur to Letre Segments 9
March 9, 2015
Segment 10
Ongoing
construction
Segment 8.2 Pre
construction
Phase III Construction i. 57-km Subic arm of the NLEX to Subic Not started
(Segments 4, 5 and 6) Expressway
NLEX Corp Toll Operation Agreement (TOA) for the Subic-Clark-Tarlac Expressway (SCTEX).
On February 9, 2015, NLEX Corp received the Notice of Award from the Bases Conversion and
Development Authority (BCDA) for the management, operation and maintenance of the 94-
kilometer SCTEX subject to compliance with specific conditions. On February 26, 2015, NLEX
Corp and BCDA entered into a Business Agreement involving the assignment of BCDAs rights
and obligations relating to the management, operation and maintenance of SCTEX as provided in
the SCTEX concession. The assignment includes the exclusive right to use the SCTEX toll road
facilities and the right to collect tolls until October 30, 2043. On May 22, 2015, the TOA was
executed by and among the Philippine Government and BCDA and NLEX Corp. At the end of
the contract term, the SCTEX, as well as the as-built plans, specification and operation/repair/
maintenance manuals relating to the same shall be turned over to the BCDA or its successor-in-
interest.
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At a consideration of =
P3.5 billion upfront cash payment, the operation and management of the
SCTEX was officially turned over to NLEX Corp on October 27, 2015. NLEX Corp shall also
pay BCDA monthly concession fees amounting to 50% of the Audited Gross Toll Revenues of the
SCTEX for the relevant month from effective date to October 30, 2043 (see Note 23).
NLEX Corp Concession Agreement for the NLEX-SLEX Connector Road Project (Connector
Road). The Connector Road is a four (4) lane toll expressway structure with a length of eight (8)
kilometers all passing through and above the right of way of the Philippine National Railways (PNR)
starting NLEX Segment 10 in C3 Road Caloocan City and seamlessly connecting to South Luzon
Expressway (SLEX) through Metro Manila Skyway Stage 3 Project. On November 23, 2016, NLEX
Corp and the Republic of the Philippines (ROP) acting through the Department of Public Works and
Highways (DPWH), signed the Concession Agreement for the design, financing, construction,
operation and maintenance of the NLEX-SLEX Connector Road. The concession period shall
commence on the commencement date and shall end on its thirty-seventh (37th) anniversary, unless
otherwise extended or terminated in accordance with the Concession Agreement. The Connector
Project, with an estimated project cost of P
=21.8 billion, is expected to commence construction in 2018
and to complete by 2021.
Under the Concession Agreement, NLEX Corp will pay the DPWH periodic payments as
consideration for the grant of the Right of Way for the project (see Note 18). Other material
commitments under the Connector Roads concession agreement are disclosed in Note 33.
CIC Toll Operation Agreement (TOA) for the Manila - Cavite Expressway (CAVITEX). CIC is
exclusively responsible for the design, financing and construction of the CAVITEX, pursuant to a
TOA dated July 26, 1996 entered into with the Philippine Reclamation Authority (PRA) and the
Government, acting through the TRB. Responsibility for the supervision of the operation and
maintenance of the toll road, initially undertaken by the PRA, was also transferred to CIC pursuant
to an Operations and Maintenance Agreement dated November 14, 2006 and a voting trust
agreement dated November 16, 2006. The concession for CAVITEX extends to 2033 for the
originally built road and to 2046 for a subsequent extension. Upon expiry of the concession
period, CIC shall hand over the project to the Philippine Government.
The concession agreement establishes a toll rate formula and adjustment procedure for setting the
appropriate toll rate.
Pursuant to the TOA, PRA established PEA Tollways Corporation (PEATC), its wholly owned
subsidiary, to undertake the O&M obligations of the PRA under the TOA (see Note 33).
Under the amended Joint Venture Agreement with PRA, each of the following expressways shall
be constructed in segments:
Status/
Phase Description Date of Operation
Phase I Design and improvement i. 6.5 km R-1 Expressway which connects May 1998
the Airport Road to Zapote
ii. Extension of the 7 km R-1 Expressway May 2011
which connects the existing R-1
Expressway at Zapote to Noveleta
Phase II Design and construction i. Extension of the C-5 Link Expressway Pre construction
which connects the R-1 Expressway to
the South Luzon Expressway (SLEX)
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MPCALA Holdings, Inc. (MPCALA) Concession Agreement for the Cavite Laguna Expressway
(CALAX). On July 10, 2015, MPCALA signed the Concession Agreement for the CALAX Project
with the DPWH. Under the Concession Agreement, MPCALA is granted the concession to
design, finance, construct, operate and maintain the CALAX, including the right to collect toll
fees, over a 35-year concession period. The CALAX is a closed-system tolled expressway
connecting the CAVITEX and the SLEX. The CALAX Project was awarded to MPCALA
following a competitive public bidding process where MPCALA was declared as the highest
complying bidder with its offer to pay the government concession fees amounting to P=27.3 billion
payable over 9 years from signing of the Concession Agreement (see Note 18). Construction is
expected to commence in 2017 with expected completion by 2020.
Cebu Cordova Link Expressway Corporations (CCLEC) Cebu Cordova Link Expressway
(CCLEX). On October 3, 2016, CCLEC, Cebu City and Municipality of Cordova (as grantors)
signed the concession agreement for the CCLEX. CCLEX, consists of the main alignment starting
from the Cebu South Coastal Road and ending at the Mactan Circumferential Road, inclusive of
interchange ramps aligning the Guadalupe River, the main span bridge, approaches, viaducts,
causeways, low-height bridges, at-grade road, toll plazas and toll operations center.
Under the concession agreement, CCLEC is granted the concession to design, finance, construct,
operate and maintain the CCLEX, including the right to collect toll fees over a 35-year concession
period. CCLEX is estimated to cost = P27.9 billion with the construction of the project to start in
2017 and is estimated to be completed by 2020. No upfront payments or concession fees are to be
paid but the grantors shall share 2% of the projects revenue.
The various toll road concession described above each include provision for periodic changes in
the tariffs charged to the public in accordance with changes in CPI.
Concession Arrangements Rail
LRMCs LRT-1 Project. On October 2, 2014, LRMC signed together with the Department of
Transportation and Communications (DOTC) and the Light Rail Transit Authority (LRTA) (together
with DOTC as Grantors) the Concession Agreement for the Light Rail Transit Line 1 Cavite
Extension and Operations & Maintenance Project (LRT-1 Project). The DOTC and LRTA formally
awarded the Project to LRMC on September 15, 2014. Under the Concession Agreement, LRMC
will operate and maintain the existing LRT-1 and construct an 11.7-km extension from the present
end-point at Baclaran to the Niog area in Bacoor, Cavite. A total of eight new stations will be built
along the extension, which traverses the cities of Paraaque and Las Pias up to Bacoor, Cavite. The
Concession Agreement is for a period of thirty-two (32) years commencing from September 12, 2015
(the Effective Date).
LRMC has the right to apply for an adjustment of the fare based on the specific fare adjustment
formula under LRMCs concession agreement with the Philippine Government. This formula
specifies an initial boarding and per-kilometer fare with 10.25% increases over these initial fares
every two years beginning in August 2016, subject to inflation rebasing if inflation falls outside an
acceptable band. If the approved fare is different from the formula specified on the concession
agreement, both the Philippine Government and LRMC are obligated to substantially keep the other
party whole, depending on whether the actual fares represent a deficit or a surplus.
As at March 1, 2017, the rehabilitation phase is on-going while for the extension, the right of way has
yet to be delivered.
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2. Basis of Preparation, Consolidation and Statement of Compliance
Basis of Preparation
The consolidated financial statements are prepared on a historical cost basis, except for certain
available-for-sale (AFS) financial assets that are measured at fair value. The consolidated
financial statements are presented in Philippine Peso, which is MPICs functional and presentation
currency, and all values are rounded to the nearest million peso (P=000,000), except when
otherwise indicated.
The consolidated financial statements provide comparative information with respect to the
previous periods.
Basis of Consolidation
The consolidated financial statements of the Company include the accounts of the Parent
Company and its subsidiaries.
Subsidiaries are all entities (including structured entities) over which the Company has control.
The Company controls an entity when the Company is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Company. They are deconsolidated from the date that control
ceases.
The acquisition method of accounting is used to account for business combinations by the
Company.
Intercompany transactions, balances and unrealized gains on transactions between companies are
eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Company.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, statement of comprehensive income, statement of changes
in equity and statement of financial position respectively.
A complete list of the Companys subsidiaries is provided for in Note 42.
Statement of Compliance
The consolidated financial statements are prepared in compliance with Philippine Financial
Reporting Standards (PFRS). The Companys significant accounting policies are disclosed in
Note 40.
3. Managements Use of Judgments and Estimates
The preparation of the consolidated financial statements in compliance with PFRS requires
management to make judgments and estimates that affect the reported amounts of revenues,
expenses, assets and liabilities, the disclosure of contingent liabilities and other significant
disclosures. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.
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Judgments
In the process of applying the Companys 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.
Consolidation of CIC. While presently not owning any of CICs common voting shares, the
Company, through MPTC, considers that it controls CIC by virtue of the Management Letter
Agreement (MLA). Under the MLA, MPTC has the power to solely direct the entire operations,
including the capital expenditure and expansion plans of CIC. MPTC shall then receive all the
financial benefits from CICs operations and all losses incurred by CIC are to be borne by MPTC.
Dilution in interest in a subsidiary as equity transaction. On July 2, 2014, GIC Private Limited
(GIC), through Arran Investment Private Limited, invested P =3.7 billion for a 14.4% stake in
MPICs subsidiary, MPHHI, and paid P =6.5 billion as consideration for an Exchangeable Bond
which can be exchanged into a 25.5% stake in MPHHI in the future. The Exchangeable Bond is
an instrument that, at a certain time in the future, converts into a fixed number of shares of
MPHHI. Moreover, the principal of Exchangeable Bond is in Philippine Peso, the same currency
as the functional currency of MPIC as the issuing entity. Thus, the Exchangeable Bond qualifies
as an equity instrument such that the proceeds from the Exchangeable Bond together with the
share subscription of GIC in MPHHI, were considered as equity transactions with a
non-controlling shareholder (see Note 22). Interest accruing on the Exchangeable Bond is
recorded as interest payable recognized at its present value (see Note 20).
Majority ownership interest without control. Where the Company holds more than 50% of voting
rights in an investee, there is a presumption that the Company has the power to exercise control
and such investment is treated as a subsidiary. However, in applying the control provisions in
relation to the Companys participation in the investees decision making and other relevant
activities, the Company has made certain judgment which determined the accounting and
classification of the following investments:
TMC. In December 2016, MPTC increased its ownership interest in TMC from 46% to 60%.
Despite ownership interest of 60%, investment in TMC remains to be accounted for as an
associate as another significant shareholder holds significant veto rights related to changes to
operating and dividend policies that affects investors returns (see Note 11).
Costa de Madera Corporation (Costa de Madera). Despite ownership interest of 62%, this is
accounted for as an associate because control and management rest with the other shareholders
(see Note 11).
Interests in Landco Pacific Corporation (Landco). Following the restructuring plan of Landco in
preparation for a sale, management classified and presented its interests in Landco, including the
receivables from Landco and AB Holdings Corporation (ABHC) as Assets held for sale starting
2014. However, the expected disposal did not happen in 2015 nor in 2016 and as such, the
investment no longer meets the held for sale criteria. Investment in Landco common shares
ceased to be classified as held of sale and starting December 31, 2016, has been classified as
investment in joint venture (see Note 11). Despite this change in accounting classification, the
BOD of the Parent Company has not changed its earlier resolution to seek a buyer for Landco.
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Investments in Beacon Electric. The Company has investments in Beacon Electrics common
shares and preferred shares and made the following judgments with respect to these investments:
Investments in Beacon Electrics common shares. For all joint arrangements structured in
separate vehicles, the Company must assess the substance of the joint arrangement in
determining whether it is classified as a joint venture or joint operation. This assessment
requires the Company to consider whether it has rights to the joint arrangements net assets (in
which case it is classified as a joint venture), or rights to and obligations for specific assets,
liabilities, expenses, and revenues (in which case it is classified as a joint operation). Factors
the Company considers include: structure, legal form, contractual agreement, and other facts
and circumstances. Upon consideration of these factors, the Company has determined that its
joint arrangement, structured through Beacon Electric as a separate vehicle, gives it rights to
the net assets of Beacon Electric, and therefore classified its investment in Beacon Electrics
common shares, as a joint venture. The Company has 75% and 50% ownership interest in
Beacon Electric through the common shares as at December 31, 2016 and 2015, respectively.
The other 25% and 50% as at December 31, 2016 and 2015, respectively, is held by PLDT
Communications and Energy Ventures, Inc. (PCEV). Despite ownership of 75% of the
common shares of Beacon Electric, the Company accounts for its investment in Beacon
Electrics common shares as investment in a joint venture because MPIC and PCEV retains
50/50 voting arrangement for as long as: (i) PCEV owns at least 20% of the outstanding
capital stock of Beacon Electric, or (ii) the purchase price for the Beacon Electric shares
acquired in May 2016 has not been fully paid by MPIC (see Note 11).
Investment in Beacon Electrics preferred shares. In determining the appropriate accounting

policy for the Companys investment in financial instruments, factors that the Company
consider include the following: contractual characteristics of the financial instrument; the
purpose for which the instrument is held, for example, trading or long-term investment; and
the accounting policy choice of the reporting entity. In applying the factors, the Company has
made a judgment that PAS 39, Financial Instruments: Recognition and Measurement is the
appropriate accounting for its investment in preferred shares of Beacon Electric because: the
preferred shares are non-voting and as such, would not provide the Company with control,
joint control or significant influence over Beacon Electric; the Company intends to hold the
investment indefinitely; and the Company may decide to sell the instruments anytime at its
discretion.
Investments in MERALCO and GBPC through Beacon Electric. Beacon Electric has a
34.96% interest in MERALCO as at December 31, 2016 and 2015 and 56% in GBPC as at
December 31, 2016. In addition, MPIC has a 15% direct interest in MERALCO. Beacon
Electric, PCEV and MPIC have agreed, under an Omnibus Investment Agreement, on certain
corporate governance matters, including Board composition, election of officers, shareholders
action, representation to the respective BODs of MERALCO and GBPC, nomination of the
MERALCO and GBPC Board Committees and nomination of MERALCO and GBPC
officers. In substance, Beacon Electric is a special purpose vehicle which PCEV and MPIC
created for the main purpose of holding and investing in MERALCO and GBPC using the
same MERALCO and GBPC shares as collateral for funding such investment. In applying
PFRS 10, Consolidated Financial Statements, the Company has made a judgment that the
decision making power of Beacon Electric over the MERALCO and GBPC shares is
effectively delegated to the shareholders, PCEV and MPIC, and that Beacon Electric does not
exercise any discretion over the vote to be taken in respect of the MERALCO and GBPC
shares but is obligated to vote the MERALCO and GBPC shares strictly in accordance with
*SGVFS021831*
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the instructions of the two shareholders (see Note 11). Thus, MPIC has significant influence
over MERALCO and GBPC and accounts for its interests in MERALCO and GBPC through
Beacon Electric using the equity method.
Acquisition of a Group of Assets Qualified as a Business Combination. In applying the

requirements of PFRS 3, Business Combinations, an entity or an asset being acquired has to be
assessed whether it constitutes a business. In the assessment, it requires identification of inputs
and processes applied to these inputs to generate outputs or economic benefits. The group of
logistics assets acquired as discussed in Note 4 is considered a business; hence, accounted for as a
business combination.
Service Concession Arrangements. In applying Philippine Interpretation IFRIC 12, Service

Concession Arrangements, the Company has made a judgment that the service concession
arrangements of the Companys water, tollway and rail businesses (see Note 1) qualify under the
intangible asset model as these companies receive the right to charge users of public service.
Details of the Companys accounting policy in respect of the service concession arrangements are
set out in Note 40 to the consolidated financial statements. Other significant judgment and
estimates made in relation to concession arrangements are as follows:
Service Concession Assets. The methods of amortization that the Company use depends on
which method best reflect the pattern of consumption of the concession assets. The straight-
line method is currently being used to amortize the rail concession asset while Unit of
Production (UOP) method is being used for the toll and water concession assets (NLEX Corp,
CIC and Maynilad). The Company annually reviews the billable water volume, in the case of
the water concession, and the traffic volume/kilometers travelled, in the case of the toll
concession, based on factors that include market conditions such as population growth and
consumption of water/usage of the toll facility, and the status of the Companys projects. It is
possible that future results of operations could be materially affected by changes in the
Companys estimates brought about by changes in the aforementioned factors.
The total carrying values of service concession assets amounted to P

=152,693.3 million and
P
=135,759.7 million and as at December 31, 2016 and 2015, respectively (see Note 13).
Service Concession Asset as Qualifying Assets and Capitalization of Borrowing Costs. The
Company has made a judgment to apply PAS 23, Borrowing Costs, in classifying the service
concession assets components undergoing rehabilitation (in the case of the existing LRT-1)
and pre/on-going construction (in the case of the construction of the LRT-1 extension, the
Connector Road and CALAX) as qualifying assets. The existing LRT-1 is severely
deteriorated when turned over to LRMC and the intention of management to bring it at par
with the standard for rail system played a key factor in the designation of the rehabilitation of
the existing LRT-1 system as a qualifying asset.
The Company capitalizes borrowing costs that are directly attributable to the acquisition or
construction of the qualifying asset as part of the cost of that asset using the specific
borrowing approach, as the Company uses specific borrowings to finance its qualifying assets.
Capitalized borrowing costs for the years ended December 31, 2016 and 2015 amounted to
P
=2,344.1 million and =P1,114.0 million, respectively (see Note 13). Capitalization of
borrowing costs ceases when substantially all the activities necessary to prepare the
components of the Service concession asset for its intended use or sale are complete.
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Construction revenue and costs. The Company recognizes construction revenues and costs in
accordance with PAS 11, Construction Contracts. Given that the rehabilitation and
construction works have been subcontracted to outside contractors (excluding the cost of some
materials for some contractors), the recognized construction revenue substantially
approximates the related construction cost. Construction revenue recognized in the
consolidated statements of comprehensive income amounted to P =16,799.0 million,
P
=12,130.0 million and =P6,669.6 million for the years ended December 31, 2016, 2015 and
2014, respectively. Construction costs recognized in the consolidated statements of
comprehensive income amounted to P =16,799.0 million, P
=12,130.0 million and
P
=6,500.5 million for the years ended December 31, 2016, 2015 and 2014, respectively
(see Note 27).
Provision for heavy maintenance. The Company also recognizes its contractual obligations to
restore the toll roads to a specified level of serviceability. NLEX Corp and CIC recognize
provision following PAS 37, Provisions, Contingent Liabilities and Contingent Assets as the
obligation arises which is a consequence of the use of the toll roads and therefore it is
proportional to the number of vehicles using the roads and increasing in measurable annual
increments. Provision for heavy maintenance amounted to = P433.0 million and P
=354.4 million
as at December 31, 2016 and 2015, respectively (see Note 17).
Lease Agreement Qualifying as Business Combination. The Company has assessed that the
hospital lease agreements entered into by Colinas Verdes Hospital Managers Corp. (CVHMC),
East Manila Hospital Managers Corp. (EMHMC) and Metro Pacific Zamboanga Hospital Corp.
(MPZHC) meet the definition of a business combination, particularly since CVHMHC, EMHMC
and MPZHC have obtained control over the operations and management of hospitals; hence, these
lease agreements qualify as acquisitions of businesses and were accounted for in accordance with
PFRS 3, Business Combinations, resulting in the recognition of property use rights (see Notes 14
and 33).
Claims from the Grantor/s. Sizeable pending claims have accumulated for the Companys water, toll
and rail businesses:
Maynilad. Maynilad wrote the Philippine Government through the Department of Finance
(DOF), to call on the undertaking after the MWSS and the ROs delayed implementation of the
decision of the Arbitral Award (see Note 32). Maynilad demanded that it be paid = P3.4 billion in
revenue losses that it had sustained as a direct result of the MWSS and the ROs refusal to
implement the correct Rebasing Adjustment from January 1, 2013 (the commencement of the 4th
Rate Rebasing Period) to February 28, 2015. As at December 31, 2016, Maynilads revenue
losses due to delayed implementation of Arbitral Award is estimated at P =8.2 billion.
NLEX Corp and CIC. In August 2015, for failure to implement toll rate adjustments, NLEX
Corp and CIC filed notice with the TRB and DOTC demanding settlement of the past due tariff
increases amounting to P =2.4 billion and =
P719.0 million based on the overdue toll rate adjustments
as at July 31, 2015 for the NLEX and CAVITEX, respectively. As at December 31, 2016,
revenue losses due to delayed tariff increases is estimated at P
=4.4 billion (VAT-exclusive) for the
NLEX and = P1.1 billion (VAT-exclusive and net of PRAs share) for the CAVITEX
(see Note 32).
LRMC. On various dates in 2015 through 2016, LRMC submitted letters to the DOTC
representing its claim for costs incurred in relation to Existing System Requirement (ESR) and
Light Rail Vehicle (LRV) shortfall on the premise of the Grantors obligation in relation to the
condition of the Existing System prior or as at the Effective Date, September 12, 2015, fare
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deficit, and contractor and other additional costs incurred less Key Performance Indicator (KPI)
charges (see Notes 32 and 33). LRMC has submitted its sixth balancing payment on
January 30, 2017.
As at December 31, 2016 and 2015, the consolidated financial statements do not include any
adjustments for the abovementioned claims pending outcome of the decision of the Arbitration Panel
(for Maynilads claims) and the discussions with the Grantor/s (for claims of NLEX Corp, CIC and
LRMC).
Estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, are described below. The Company based its
assumptions and estimates on parameters available when the consolidated financial statements were
prepared. Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.
Determination of Fair Value of Financial Instruments. The Company initially records all
financial instruments at fair value and subsequently carries certain financial assets and financial
liabilities at fair value, which requires extensive use of accounting estimates and judgment.
Valuation techniques are used particularly for financial assets and financial liabilities that are not
quoted in an active market. Where valuation techniques are used to determine fair values
(e.g., discounted cash flow and option pricing models), they are periodically reviewed by qualified
personnel who are independent of the persons that initiated the transactions. All models are
calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent
practicable, models use only observable data as valuation inputs. However, other inputs such as
credit risk (whether that of the Company or the counterparties), forward prices, volatilities and
correlations, require management to develop estimates or make adjustments to observable data of
comparable instruments. The amount of changes in fair values would differ if the Company uses
different valuation assumptions or other acceptable methodologies. Any change in fair value of
these financial instruments would affect either the consolidated statement of comprehensive
income or consolidated statement of changes in equity.
Fair values of financial assets and financial liabilities are presented in Note 37.
Purchase Price Allocation in Business Combinations and Acquisition of Associate and Goodwill.
The Company accounts for the acquired businesses, and in part in an acquisition of associates,
using the acquisition method which requires extensive use of accounting judgments and estimates
to allocate the purchase price to the fair market values of the acquirees identifiable assets and
liabilities and contingent liabilities, if any, at the acquisition date. Any difference in the purchase
price and the fair values of the net assets acquired is recorded as either goodwill, a separate
account in the consolidated statement of financial position (or subsumed in the investment for
acquisition of an associate), or gain on bargain purchase in profit or loss. Thus, the numerous
judgments made in estimating the fair value to be assigned to the acquirees assets and liabilities
can materially affect the Companys financial position and performance.
The Companys acquisitions of certain subsidiaries have resulted in recognition of goodwill.

The carrying value of goodwill amounted to P =21,003.6 million and P=18,308.2 million as at
December 31, 2016 and 2015, respectively (see Note 12). The acquisition of GBPC, an indirect
associate through Beacon Electric, resulted in a provisional goodwill of P=3,919.0 million
(see Note 11).
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Impairment of Receivables. The Company estimates the allowance for doubtful accounts related to
receivables using a combination of specific and collective assessments. The amounts calculated in
each level of impairment assessment are combined to determine the total amount of allowance for
doubtful accounts. First, the Company evaluates specific accounts that are considered individually
significant for any objective evidence that certain customers are unable to meet their financial
obligations. In these cases, the Company uses judgment, based on the best available facts and
circumstances, including but not limited to, the length of its relationship with the customer and the
customers current credit status based on third party credit reports and known market factors.
The allowance provided is based on the difference between the present value of cash flows of the
receivable that the Company expects to collect, discounted at the receivables original effective
interest rate, and the carrying amount of the receivable. These specific allowances are re-evaluated
and adjusted as additional information received affects the amounts estimated. If no impairment loss
is determined for an individually assessed receivable, the receivable is included in a group of
receivables with similar credit risk characteristics and is collectively assessed for impairment. The
provision under collective assessment is based on historical collection and write-off experience and
change in customer payment terms. Impairment assessment is performed on a continuous basis
throughout the year.
The carrying values of receivables, net of allowance for doubtful accounts, amounted to
P
=5,227.0 million and =P4,586.2 million as at December 31, 2016 and 2015, respectively. Allowance
for doubtful accounts amounted to P=854.0 million and P=848.2 million as at December 31, 2016 and
2015, respectively (see Notes 8 and 36).
Impairment of AFS Financial Assets. The Company treats an AFS equity financial asset as
impaired when there had been a significant or prolonged decline in the fair value below its
acquisition cost or where other objective evidence of impairment exists. The determination of
what is significant or prolonged requires judgment. The Company treats significant
generally as 20.0% or more and prolonged as greater than 12 months for quoted equity
securities. In addition, the Company evaluates other factors, including normal volatility in share
price for quoted equities and the future cash flows and the discount factors for unquoted equities.
For debt instruments classified as AFS financial assets, the Company considers loss events that
has an impact on the estimated future cash flows of the financial asset, among others, the issuer is
experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganization. Other
observable data may indicate that there is a measurable decrease in the estimated future cash
flows, such as changes in arrears or economic conditions that correlate with defaults.
Impairment loss recognized for AFS financial asset amounted to to P=56.0 million, nil and
P
=100.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. The
carrying value of AFS financial assets, including Unit Investment Trust Fund (UITF) classified as
short-term deposits and investments in Beacon Electric preferred shares, amounted to
P
=23,458.1 million and =P15,204.5 million as at December 31, 2016 and 2015, respectively
(see Notes 9, 10, 11 and 36).
Recoverability of Goodwill and Service Concession Assets not yet Available for Use. Goodwill
and service concession assets not yet available for use are subject to annual impairment test. This
requires an estimation of the value in use of CGUs to which the goodwill is allocated or to which
the service concession assets belong. Estimating the value in use requires the Company to
estimate the expected future cash flows from the CGU and to choose an appropriate discount rate
in order to calculate the present value of those cash flows. No impairment of goodwill and service
concession assets not yet available for use was recognized for each of the three years in the period
ended December 31, 2016. The carrying values of goodwill amounted to P =21,003.6 million and
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- 14 -
P
=18,308.2 million as at December 31, 2016 and 2015, respectively (see Note 12). The aggregate
carrying value of service concession assets not yet available for use amounted to
P
=34,466.9 million and =P27,783.2 million as at December 31, 2016 and 2015, respectively
(see Note 12).
Impairment of Nonfinancial Assets. Impairment review is performed when certain impairment

indicators are present. Determining the fair value of assets requires the estimation of cash flows
expected to be generated from the continued use and ultimate disposition of such assets.
While it is believed that the assumptions used in the estimation of fair values reflected in the
consolidated financial statements are appropriate and reasonable, significant changes in these
assumptions may materially affect the assessment of recoverable values and any resulting
impairment loss could have a material adverse impact on the results of operations.
The carrying values of non-financial assets subject to impairment review when impairment indicators
are present are as follows:
2016 2015
(In Millions)
Service concession assets (see Note 13) P
=152,693 =135,760
P
Equity method investees (see Note 11) 104,814 83,873
Property and equipment (see Note 14) 10,480 8,016
Intangible assets arising from business combination
(see Note 15) 1,171
Deferred project costs (see Note 15) 858 873
Property use rights (see Note 14) 554 596
Except for the impairment loss of P=774.0 million recognized on an equity method investee in 2016
(see Note 11), there were no impairment losses recognized on other non-financial assets for each of
the three years in the period ended December 31, 2016.
Estimated Useful Lives of Property and Equipment, Property Use Rights and Intangible assets arising
from business combination. The useful lives of each of the item of the Companys property and
equipment, property use rights and intangible assets arising from business combination are estimated
based on the period over which the asset is expected to be available for use. 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 at each financial year-end 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 these items would increase the recorded depreciation and amortization
expense and decrease the carrying values of these assets.
There were no change in the estimated useful lives of these assets for all the periods presented.
Taxes. Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax
laws, and the amount and timing of future taxable income. Given the diversity of the Companys
businesses and the long-term nature and complexity of existing contractual agreements or the nature
of the business itself, changes in differences arising between the actual results and the assumptions
made, or future changes to such assumptions, could necessitate future adjustments to tax income and
expense already recorded. The Company establishes provisions, based on reasonable estimates, for
*SGVFS021831*
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possible consequences of audits by the tax authorities under which the Company operates. The
amount of such provisions is based on various factors, such as experience of previous tax audits and
differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences in interpretation may arise for a wide variety of issues depending on the conditions
prevailing in the respective domicile or to the operations of the Company.
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilized. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognized, based upon the likely
timing and the level of future taxable profits together with future tax planning strategies. The carrying
amount of deferred tax assets is reviewed at each end of the reporting period and reduced to the extent
that it is no longer probable that sufficient taxable income will be available to allow all or part of the
deferred tax assets to be utilized. The Company performs an annual evaluation of the realizability of
deferred income tax assets in determining the portion of deferred tax assets which should be
recognized. The Companys assessment on the recognition of deferred income tax assets on
deductible temporary differences is based on the forecasted taxable income of the following periods.
This forecast is based on the Companys past results and future expectations on revenue and
expenses.
Certain of the Companys subsidiaries are entitled to income tax holiday period. The Company
recognized deferred tax assets on deductible temporary differences expected to reverse after the
income tax holiday period, while deferred taxes on deductible temporary differences expected to
reverse during the income tax holiday and to items where doubt exists as to the tax benefits they will
bring in the future, are not recognized (see Note 29).
Deferred tax assets amounted to =
P466.7 million and P
=1,241.6 million as at December 31, 2016 and
2015, respectively. The Companys deductible temporary difference, including unused NOLCO and
MCIT, for which no deferred tax assets have been recognized amounted to = P7,552.0 million and
P
=7,975.4 million as at December 31, 2016 and 2015, respectively (see Notes 15 and 29).
Long-Term Incentives Plan (LTIP). The LTIP for key executives of MPIC and certain subsidiaries
was approved by the Compensation Committee and the BOD and is based on profit targets for the
covered performance cycle. The cost of LTIP is determined using the projected unit credit method
based on prevailing discount rates and profit targets. While managements assumptions are
believed to be reasonable and appropriate, significant differences in actual results or changes in
assumptions may materially affect the Companys other long-term incentive benefits.
LTIP expense for the years ended December 31, 2016, 2015 and 2014 amounted to
P
=533.0 million, P
=567.8 million and = P440.2 million, respectively, and presented as Personnel
costs and employee benefits under General and administrative expenses in the consolidated
statements of comprehensive income. LTIP payable as at December 31, 2016 and 2015 amounted
to =
P703.2 million and =P1,184.3 million, respectively, and is presented under Accounts payable
and other current liabilities for the current portion and Other long-term liabilities account for
the noncurrent portion in the consolidated statements of financial position (see Notes 16, 20
and 25).
Provisions. The Company recognizes provisions based on estimates of whether it is probable that
an outflow of resources will be required to settle an obligation. Where the final outcome of these
matters is different from the amounts that were initially recognized, such differences will impact
the financial performance in the current period in which such determination is made.
*SGVFS021831*
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Provisions mainly consist of provision for estimated expenses related to the concluded and ongoing
debt settlement negotiations and certain warranties and guarantees, claims and potential claims
against the Company, and provision for heavy maintenance. The provisions for the heavy
maintenance requires an estimation of the periodic cost, generally estimated to be every five to seven
years or the expected heavy maintenance dates, to restore the assets to a level of serviceability during
the concession term and in good condition before turnover to the Grantor. This is based on the best
estimate of management to be the amount expected to be incurred to settle the obligation at every
heavy maintenance dates discounted using a pre-tax rate that reflects the current market assessment of
the time value of money and the risk specific to the liability.
Additional provisions, excluding accretion, for the years ended December 31, 2016, 2015 and 2014
amounted to = P732.5 million, P
=569.0 million and =P1,392.0 million, respectively. Cumulative
provisions amounted to =P5,467.7 million and P=5,737.9 million as at December 31, 2016 and 2015,
respectively (see Note 17).
Contingencies. Certain subsidiaries of the Parent Company are parties to certain lawsuits or
claims arising from the ordinary course of business. However, the Companys management and
legal counsel believe that the eventual liabilities under these lawsuits or claims, if any, will not
have a material effect on the consolidated financial statements (see Note 32).
4. Business Combinations and Acquisition of Non-controlling Interests
The Companys intention is to maintain and continue to develop a diverse set of infrastructure
assets through its investments in water, toll roads, power distribution, health care services, rail and
other businesses that complement the current infrastructure business of the Company. The
Company is therefore committed to investing through acquisitions and strategic partnerships in
prime infrastructure assets with the potential to provide synergies with its existing operations.
Accordingly, the following acquisitions were made in 2016 and 2015.
Acquisitions in 2016
Acquisition of Hospitals
On December 16, 2015, MPHHI signed an Investment Agreement with Sacred Heart Hospital of
Malolos Inc. (SHHM), located in the capital city of Bulacan. Under the Agreement, MPHHI is
investing =
P150.0 million in SHHM, for a 51% ownership. Proceeds of the investment will fund
the expansion of SHHMs infrastructure to increase patient beds and to acquire various medical
equipment. This investment transaction was completed on March 7, 2016.
On July 29, 2016, MPHHI completed acquisition of 469,077 shares, representing approximately a
93% stake in Marikina Valley Medical Center, Inc. (MVMC) for P =2,117.80 per share. MVMC is
a prominent tertiary hospital along Sumulong Highway in Marikina. On the same date, MPHHI
paid the sellers the amount representing approximately 80% of the purchase price and the balance
thereof was deposited in an Escrow Account which shall be released to the sellers in accordance
with the terms of the Escrow Agreement. As of March 1, 2017, the conditions required for the
release of the balance have not been met.
MPHHI acquired SHHM and MVMC as part of its strategy to grow its portfolio and increase the
Companys total bed capacity and to be the largest private hospital group in the Philippines. The
acquisitions were accounted for using the acquisition method.
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The provisional fair values of the identifiable assets and liabilities as at the date of acquisition:
SHHM MVMC
(In Millions)
Assets
Cash and cash equivalents =165
P P35
=
Receivables 31 129
Other current assets 14 21
Property and equipment 135 320
Other noncurrent assets 10 7
355 512
Liabilities
Accounts payable and accrued expenses 46 74
Other current liabilities 9 78
Other noncurrent liabilities 6 4
61 156
Total identifiable net assets at fair value 294 356
Non-controlling interest (144) (25)
Goodwill arising on acquisition 662
Consideration transferred =150
P =993
P
Net cash outflow on acquisition is as follows:

SHHM MVMC
(In Millions)
Cash acquired with the subsidiary(a) P165
= =35
P
Total cash paid on acquisition (150) (993)
Net cash inflow (outflow) =15
P (P
=958)
(a)Cash acquired with the subsidiary is included in cash flows from investing activities.
The fair value of the property and equipment is provisional pending receipt of the final valuations
for those assets. The fair value and gross amount of SHHMs trade receivables amounted to
P
=31.0 million and = P36.0 million, respectively. The fair value and gross amount of MVMCs trade
receivables amounted to = P44.0 million and =P57.0 million, respectively. The difference between
the fair value and the gross amount of the receivables represents the portion expected to be
uncollectible.
The goodwill arising from the acquisition of MVMC is primarily attributed to the expected
synergies and other benefits from combining the assets and activities of MVMC with those of the
hospitals of the Company. The goodwill is not deductible for income tax purposes.
The non-controlling interests were recognized as a proportion of net assets acquired.
From the date of acquisition, SHHM and MVMC have contributed P =196.7 million and
P
=260.3 million, respectively, to the consolidated revenue and P =11.4 million and P=43.9 million,
respectively, to the consolidated net income. If the combination had taken place at the beginning
of the year, contributions to the consolidated revenue and consolidated net income would have
been =P232.1 million of revenue and = P16.4 million of net profit for SHHM and P =588.0 million of
revenue and = P56.4 million of net profit for MVMC for the year ended December 31, 2016. Total
combined transaction costs for these acquisitions, amounting to P =3.4 million, have been expensed
and are included in the General and administrative expenses in the consolidated statement of
comprehensive income and are part of operating cash flows for the year ended
December 31, 2016.
*SGVFS021831*
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MetroPac Movers, Inc.s (MMI) acquisition of assets. On May 19, 2016, MMI completed the
purchase of the businesses and assets (including certain contracts) of Basic Logistics Inc.,
A1Move Logistics, Inc., Philflash Logistics, Inc. and BasicLog Trade and Marketing Enterprises
(Sellers), all of which are involved in the logistics business.
The transaction involves the acquisition by MMI of the logistics business and assets (including
certain contracts) of the Sellers for a total purchase price consideration of P
=2,168.3 million,
inclusive of applicable value-added taxes. After the completion of the transaction, a separate
company that will be designated by the Sellers will acquire twenty four percent (24%) of the
outstanding capital stock of MMI with target equity contribution of P =728.4 million. The
acquisition of logistics business and asset and the entry of the Sellers in MMI are considered as
linked transactions which resulted to a recognition of goodwill of P =1,139.7 million and a
non-controlling interest of P
=728.4 million.
MMI will expand its logistics business utilizing the assets and businesses initially acquired from
the Sellers.
The transaction was carried out through an asset purchase agreement involving, among others:
(a) the sale by the Sellers of identified logistics assets, (b) the novation of certain key contracts of
the Sellers with their respective clients, (c) the execution of new contracts required to ensure
continued operations of the business under MMI, and (d) the transfer of certain key officers and
employees of the Sellers to MMI.
The acquisition of the assets has been accounted for using the acquisition method. The
provisional fair values of the assets acquired as at the date of acquisition:
Provisional
Values
(In Millions)
Property and equipment =705
P
Intangible assets 91
Total identifiable net assets at fair value 796
Provisional goodwill (at MMI level) 1,140
Total acquisition cost 1,936
Applicable Input VAT 232
Total purchase price consideration, inclusive of Input VAT =2,168
P
The net assets recognized in the consolidated financial statements were based on a provisional
assessment of their fair value while the Company sought an independent valuation for the
intangible assets and other assets acquired. The intangible assets comprise of customer contracts
that were assigned/transferred by the Sellers to MMI with initial amortization period of six (6)
years. The valuation, including the estimated useful life of the intangible asset, had not been
completed by the date the financial statements were approved for issue by the BOD.
The goodwill comprises the value of expected synergies arising from the acquisition and a
customer list, which is not separately recognized. Based on assessment, the customer list is not
separable and therefore, it does not meet the criteria for recognition as an intangible asset under
PAS 38, Intangible Assets. None of the goodwill recognized is expected to be deductible for
income tax purposes.
*SGVFS021831*
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Providing pro-forma information on the revenue and net income (as if the acquisition date was as
at January 1, 2016) was deemed impracticable considering that the group of assets was purchased
from various sellers.
Acquisition of common shares of Eco-System Technologies International, Inc. (ESTII).

On June 16, 2016, MPWIC completed the acquisition of 65% of the outstanding capital stock of
Eco-System Technologies International, Inc. (ESTII). ESTII is engaged in the business of
designing, supplying, constructing, installing, and operating and maintaining wastewater and
sewage treatment plant facilities. The transaction allows MPIC, through MPWIC, to diversify its
water sector investment holdings and invest in the high growth wastewater engineering,
procurement and construction (EPC) services and O&M markets.
ESTII has a leading market position in the Philippine wastewater industry and has a valuable
client base comprised of major mall, office, commercial and residential property developers,
hotels and resorts, hospitals and industrial facilities.
The acquisition comprises of the purchase of 12,000,000 Class A common shares from Eco-
System Technologies, Inc. (ESTI) representing 60% of total outstanding capital stock of ESTII, at
a consideration of P
=141.67 per Class A common share, and subscription to 1,000,000 Class C
common shares representing 5% of total outstanding capital stock of ESTII, at a consideration of
P
=100.00 per Class C common share.
The acquisition has been accounted for using the acquisition method. The provisional fair values
of the identifiable assets and liabilities of ESTII as at the date of acquisition:
Provisional
Values
(In Millions)
Assets
Cash =99
P
Inventories 33
Input VAT 139
Property and equipment 3
Intangible assets 1,121
Total identifiable net assets at fair value 1,395
Non-controlling interest (35% at MPWIC level) (489)
Goodwill arising on acquisition 894
Consideration transferred =1,800
P
Net cash outflow on acquisition is as follows:
Amount
(In Millions)
Cash acquired with the subsidiary(a) =99
P
Total cash paid as of December 31, 2016 (1,800)
Net cash outflow (P
=1,701)
(a)Cash acquired with the subsidiary is included in cash flows from investing activities.
*SGVFS021831*
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The net assets recognized in the consolidated financial statements were based on a provisional
assessment of their fair value while the Company sought an independent valuation for the
intangible assets and other assets acquired. The intangible assets comprise of customer
relationship and contracts and license to use intellectual property rights over patents and utility
models. Intangible assets have initial estimated amortization period of up to twenty years (20)
years. The valuation, including the estimated useful life of the intangible assets, had not been
completed by the date the consolidated financial statements were approved for issue by the BOD.
The goodwill comprises the value of expected synergies arising from the acquisition. None of the
goodwill recognized is expected to be deductible for income tax purposes.
ESTII has contributed P=177.8 million to the consolidated revenue and P

=1.9 million of net profit to
the consolidated net income of the Company since it was incorporated on May 12, 2016.
Total transaction costs, included as General and administrative expense amounted to

P
=6.6 million.
Acquisitions in 2015
Lease Contract with Western Mindanao Medical Center, Inc. (WMMCI). MPHHI formed a
wholly-owned subsidiary, Metro Pacific Zamboanga Hospital Corp. (MPZHC), which signed on
March 27, 2015 a long term lease of the land, buildings and equipment of WMMCI, a hospital
with a 25-year history of service in Zamboanga. This is in line with the Companys continuous
plan to expand its hospital portfolio. The effectivity of the lease was on June 1, 2015 with
MPZHC doing business under the name of West Metro Medical Center.
The lease agreement qualified as business combination where the identifiable assets consist of
property use rights for the use of existing land and building over the term of the lease of twenty
(20) years.
The net assets recognized in the December 31, 2015 consolidated financial statements were based
on a provisional assessment of fair value while MPHHI sought an independent valuation for the
assets of the acquired business. The valuation had not been completed by the date the 2015
consolidated financial statements were approved for issue by the BOD.
In June 2016, the valuation was completed and there were no differences between the provisional
and final fair value of the assets and liabilities. As at acquisition date, provisional and final fair
value of the identifiable asset acquired consisting of property use rights amounted to P=28.8 million
while the purchase consideration comprises of the present value of the lease payable which
amounted to = P28.8 million as well.
From effectivity of the lease to December 31, 2015, MPZHCs revenues and net loss from
operations amounted to P =41.8 million and P
=8.9 million, respectively. If the lease agreement had
commenced at the beginning of 2015, contributions to the consolidated revenue and consolidated
net income would have been = P65.0 million of revenue and P=25.0 million of net loss from
operations for the year ended December 31, 2015.
Acquisition of Non-Controlling Interest in Riverside Medical Center, Inc (RMCI). In March 2015,
MPHHI acquired an additional 12.4% equity ownership in RMCI for a total consideration of
P
=92.5 million.
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In June 2015, MPHHI, through a rights offer, subscribed to an additional 209,802 shares out of the
230,413 new RMCI shares at = P1,736 per share. MPHHIs subscription was more than its
allocated shares by 48,743 shares equivalent to P
=84.6 million subscription price. This subscription
further increased MPHHIs equity ownership in RMCI by 8.1%.
The above transactions increased MPHHIs effective ownership in RMCI from 57.5% to 78.0%
(representing increase of 20.5%) and was accounted for as an equity transaction with the net
premium of P=6 million recognized in equity (see Note 22). The net premium represents the
difference between the carrying value of the additional interest acquired and the total
consideration paid.
(In Millions)
Cash consideration paid P177
=
RMCIs net assets acquired (20.5%) (171)
Difference recognized in equity reserve at MPHHI =6
P
Difference recognized in equity reserve at MPIC consolidated level P

=4
5. Operating Segment Information

An operating segment is a component of the Company that engages in business activities from
which it may earn revenue and incur expenses, whose operating results are regularly reviewed by
the Companys chief operating decision maker who makes decisions about how resources are to be
allocated to the segment and assesses its performance, and for which discrete financial information
is available.
services and products namely: water, toll operations, power, healthcare, rail, logistics and others
(see Note 1). However, given that the logistics business does not yet meet the quantitative
thresholds to qualify as an operating segment, the results of the logistics operations are included in
the other businesses column.
Segment performance and monitoring. The Companys chief operating decision maker is the
BOD. The BOD monitors the operating results of each business unit separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance is
evaluated based on: consolidated net income for the year; earnings before interest, taxes and
depreciation and amortization, or Core EBITDA; Core EBITDA margin; and core income (loss).
Net income for the year is measured consistent with consolidated net income in the consolidated
financial statements.
Core EBITDA is measured as consolidated net income excluding depreciation and amortization of
property and equipment and intangible assets, asset impairment on noncurrent assets, financing
costs, interest income, equity in net earnings (losses) of associates and joint ventures, net foreign
exchange gains (losses), net gains (losses) on derivative financial instruments, provision for
(benefit from) income tax and other non-recurring gains (losses). Core EBITDA margin pertains
to Core EBITDA divided by operating revenues.
Performance of the operating segments is also assessed based on a measure of recurring profit or
core income. Core income is measured as net income attributable to owners of the Parent
Company excluding the effects of foreign exchange and derivative gains or losses and
non-recurring items (NRI), net of tax effect of the aforementioned. NRI represent gains or losses
that, through occurrence or size, are not considered usual operating items.
*SGVFS021831*
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Segment expenses and segment results exclude transfers or charges between business segments.
These transfers are also eliminated for purposes of the consolidated financial statements. For the
years ended December 31, 2016, 2015 and 2014, no revenue transactions with a single customer
accounted for 10% or more of the Companys consolidated revenues. Except for the equity in net
earnings recognized from the Companys foreign investees DMT and CII B&R (see Note 11), all
revenues of the Company were primarily derived from within the Philippines.
Segment capital expenditure is the total cost incurred during the period to acquire service
concession assets, property and equipment and intangible assets other than goodwill. For the
consolidated statements of financial position, difference between the combined segment assets and
the consolidated assets consist of adjustments and eliminations comprising of goodwill and
deferred tax assets. Difference between the combined segment liabilities and the consolidated
liabilities largely consist of deferred tax liabilities.
The following table shows the reconciliations of the Companys consolidated Core EBITDA to
consolidated net income for the years ended December 31, 2016, 2015 and 2014.
2016 2015 2014
(In Millions)
Consolidated Core EBITDA P24,723

= =21,198
P =19,188
P
Depreciation and amortization (5,013) (4,393) (4,007)
Consolidated EBIT 19,710 16,805 15,181
Adjustments to reconcile with
consolidated net income:
Interest income 415 460 385
Share in net earnings of equity
method investees 7,168 5,204 3,226
Interest expense (5,328) (4,918) (4,290)
Non-recurring gains (losses) - net* (355) (933) (850)
Provision for income tax (4,831) (1,544) (1,078)
Consolidated net income for the year =16,779
P =15,074
P =12,574
P
*Includes net foreign exchange gains (losses)
The following table shows the reconciliations of Companys consolidated core income to the
Companys consolidated net income for the years ended December 31, 2016, 2015 and 2014.
2016 2015 2014
(In Millions)
Consolidated core income

for the year P
=12,106 P
=10,346 P
=8,508
Foreign exchange gains - net (48) 102 18
Other non-recurring losses (1,275) (621) (456)
Net tax effect of aforementioned
adjustments 673 (281) (130)
Net income for the year attributable
to owners of the Parent
Company 11,456 9,546 7,940
Net income for the year attributable
to non-controlling interest 5,323 5,528 4,634
Consolidated net income for the year =16,779
P =15,074
P =12,574
P
The segment revenues, net income for the year, assets, liabilities, and other segment information
of the Companys reportable operating segments as at and for the years ended December 31, 2016,
2015 and 2014 are detailed in the succeeding tables.
*SGVFS021831*
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The following table presents consolidated information on core income and certain assets and liabilities regarding business segments for the years ended
December 31, 2016, 2015 and 2014:
Year Ended December 31, 2016 (In Millions)

Power Adjustments/
Water Toll Operations Healthcare Distribution Rail Other Businesses Eliminations Consolidated
Total revenue from external sales P
= 20,466 P
= 11,902 P
= 8,967 =
P P
= 3,016 P
= 469 =
P P
= 44,820
Cost of sales and services (6,458) (4,857) (4,871) (1,850) (322) (18,358)
Gross Margin 14,008 7,045 4,096 1,166 147 26,462
Operating expenses (2,701) (1,416) (2,882) (549) (1,025) (8,573)
Other income (charges) - net (82) 336 242 1,215 75 35 1,821
Profit before Financing Charges 11,225 5,965 1,456 1,215 692 (843) 19,710
Interest expense net (1,612) (1,207) (131) 19 (1,982) (4,913)
Profit before NCI and Income Tax 9,613 4,758 1,325 1,215 711 (2,825) 14,797
Non-controlling interest (3,239) (999) (545) (227) (18) (5,028)
Provision for income tax (2,826) (1,237) (423) (211) (134) (4,831)
Contribution from Subsidiaries 3,548 2,522 357 1,215 273 (2,977) 4,938
Share in net earnings (losses) of equity method investees 16 995 232 6,014 89 7,168
Contribution from Operations - Core Income (Loss) 3,564 3,517 589 7,229 273 (3,066) 12,106
Non-recurring charges 198 (174) (13) (209) 2 (454) (650)
Segment Income (Loss) P
= 3,762 P
= 3,343 P
= 576 P
= 7,020 275 (P
= 3,520) =
P P
= 11,456
Core EBITDA P
= 14,400 P
= 6,853 P
= 2,262 P
= 1,215 P
= 729 (P
= 736) =
P P
= 24,723
Core EBITDA Margin 70% 58% 25% % 24% % % 55%
Non-recurring Charges (P
= 261) (P
= 127) (P
= 21) (P
= 209) =
P6 (P
= 416) =
P (P
= 1,028)
Benefit from income tax 739 (64) (2) 673
Non-controlling interest (280) 17 8 (2) (38) (295)
Net Non-recurring Charges P
= 198 (P
= 174) (P
= 13) (P
= 209) =
P2 (P
= 454) =
P (P
= 650)
Assets and Liabilities

Segment assets P
= 102,096 P
= 71,399 P
= 13,678 =
P P
= 8,956 P
= 7,446 P
= 21,471 P
= 225,046
Investments and advances 361 11,756 3,000 109,639 1,800 126,556
Consolidated Total Assets P
= 102,457 P
= 83,155 P
= 16,678 P
= 109,639 P
= 8,956 P
= 9,246 P
= 21,471 P
= 351,602
Segment Liabilities P
= 47,583 P
= 56,372 P
= 4,897 P
= 8,353 P
= 4,215 P
= 38,176 P
= 3,925 P
= 163,521
Other Segment Information
Capital expenditures -
Service concession assets and property and equipment P
= 10,589 P
= 10,125 P
= 1,359 =
P P
= 943 P
= 132 =
P P
= 23,148
Depreciation and amortization 3,174 889 806 37 107 5,013
*SGVFS021831*
- 24 -

Power Adjustments/
=19,098 P
=9,691 P
=7,553 =
P =
P897 =
P =
P P
=37,239
Cost of sales and services (5,452) (3,876) (4,220) (478) (14,026)
Gross Margin 13,646 5,815 3,333 419 23,213
Operating expenses (2,401) (1,133) (2,309) (337) (1,066) (7,246)
Other income (charges) net (220) 388 211 405 17 37 838
Profit before Financing Charges 11,025 5,070 1,235 405 99 (1,029) 16,805
Interest expense net (1,766) (1,384) (121) 14 (1,201) (4,458)
Profit before NCI and Income Tax 9,259 3,686 1,114 405 113 (2,230) 12,347
Non-controlling interest (4,365) (810) (456) (36) 6 (5,661)
Provision for income tax (95) (983) (356) (36) (74) (1,544)
Contribution from Subsidiaries 4,799 1,893 302 405 41 (2,298) 5,142
Share in net earnings (losses) of equity method investees 20 935 171 4,138 (60) 5,204
Contribution from Operations - Core Income (Loss) 4,819 2,828 473 4,543 41 (2,358) 10,346
Non-recurring charges (93) (295) (22) (164) (20) (206) (800)
=4,726 P
=2,533 =
P451 P
=4,379 P
=21 (P
=2,564) =
P P
=9,546
Core EBITDA P
=13,810 P
=5,933 P
=1,932 =
P405 =
P105 (P
=987) =
P P
=21,198
Core EBITDA Margin 72% 61% 26% % 12% % % 57%
=129) (P
=41) (P
=31) (P
=164) (P
=26) (P
=261) =
P (P
=652)
Benefit from income tax (1) (276) (4) (281)
Non-controlling interest 37 22 13 6 55 133
Net Non-recurring Charges (P
=93) (P
=295) (P
=22) (P
=164) (P
=20) (P
=206) =
P (P
=800)

Segment assets P
=93,138 P
=65,389 P
=13,398 =
P P
=7,531 P
=6,972 P
=19,550 P
=205,978
Investments and advances 251 10,738 2,841 81,467 905 96,202
=93,389 P
=76,127 P
=16,239 P
=81,467 P
=7,531 P
=7,877 P
=19,550 P
=302,180
=46,369 P
=52,037 P
=4,916 P
=8,450 P
=3,354 P
=31,667 P
=4,610 P
=151,403
=7,903 P
=27,641 P
=1,219 =
P P
=5,692 P
=30 =
P P
=42,485
Depreciation and amortization 2,785 863 697 6 42 4,393
*SGVFS021831*
- 25 -

Power Adjustments/
=18,363 P
=8,641 P
=6,828 =
P =
P =
P =
P P
=33,832
Cost of sales and services (5,431) (3,575) (3,912) (12,918)
Gross Margin 12,932 5,066 2,916 20,914
Operating expenses (2,116) (832) (2,040) (27) (994) (6,009)
Other income (charges) - net (530) 270 161 405 (30) 276
Profit before Financing Charges 10,286 4,504 1,037 405 (27) (1,024) 15,181
Interest expense - net (2,007) (1,184) (187) 2 (529) (3,905)
Profit before NCI and Income Tax 8,279 3,320 850 405 (25) (1,553) 11,276
Non-controlling interest (3,933) (717) (272) 5 1 (4,916)
Benefit from (provision for) income tax 40 (845) (258) 4 (19) (1,078)
Contribution from Subsidiaries 4,386 1,758 320 405 (16) (1,571) 5,282
Share in net earnings (losses) of equity method investees (10) 481 145 2,622 (12) 3,226
Contribution from Operations - Core Income (Loss) 4,376 2,239 465 3,027 (16) (1,583) 8,508
Non-recurring income (charges) (278) (92) (33) (55) (50) (60) (568)
=4,098 P
=2,147 =
P432 P
=2,972 (66) (P
=1,643) =
P P
=7,940
Core EBITDA P
=12,841 P
=5,240 P
=1,709 =
P405 (P
=27) (P
=980) =
P P
=19,188
Core EBITDA Margin 70% 61% 25% % % % % 57%
=488) (P
=5) (P
=29) (P
=55) (P
=63) (P
=80) =
P (P
=720)
Benefit from income tax (33) (92) (2) (3) (130)
Non-controlling interest 243 5 (2) 13 23 282
Net Non-recurring Charges (P
=278) (P
=92) (P
=33) (P
=55) (P
=50) (P
=60) =
P (P
=568)

Segment assets P
=84,733 P
=42,340 P
=13,082 =
P P
=1,654 P
=7,556 P
=19,472 P
=168,837
Investments and advances 123 6,651 2,382 55,310 709 65,175
=84,856 P
=48,991 P
=15,464 P
=55,310 P
=1,654 P
=8,265 P
=19,472 P
=234,012
=45,275 P
=34,447 P
=4,848 P
=7,188 P
=73 P
=8,381 P
=4,228 P
=104,440
=4,701 P
=2,569 =
P856 =
P =
P P
=60 =
P P
=8,186
Depreciation and amortization 2,555 736 672 44 4,007
*SGVFS021831*
- 26 -
The following table shows the analysis and allocation of the consolidated results of operations of the Company to core and NRI and is provided to reconcile the
preceding consolidated segment information, amounts and balances with the consolidated statements of comprehensive income:
2016 2015 2014
Core NRI Reclassification Consolidated Core NRI Reclassification Consolidated Core NRI Reclassification Consolidated
(In Millions)
OPERATING REVENUES
Water and sewerage services revenue P
=20,280 P
= P
= P
=20,280 P
=19,098 =
P =
P P
=19,098 P
=18,363 =
P =
P P
=18,363
Toll fees 11,902 11,902 9,691 9,691 8,641 8,641
Hospital and school revenue 8,967 8,967 7,553 7,553 6,677 6,677
Rail revenue 3,016 3,016 897 897 151 151
Logistics and other revenues 655 655
44,820 44,820 37,239 37,239 33,832 33,832
COST OF SALES AND SERVICES (18,358) (12) (18,370) (14,026) (14,026) (12,918) (164) (13,082)
GROSS PROFIT (LOSS) 26,462 (12) 26,450 23,213 23,213 20,914 (164) 20,750
General and administrative expenses (8,573) (489) (9,062) (7,246) (801) (8,047) (6,009) (814) (6,823)
Interest expense (5,328) (5,328) (4,918) (7) (4,925) (4,290) (11) (4,301)
Share in net earnings (losses) of equity method investees 8,383 (360) (1,215) 6,808 5,609 (190) (405) 5,014 3,631 (59) (405) 3,167
Interest income 415 2 417 460 460 385 385
Other income and expenses - net 606 (169) 1,215 1,652 433 346 405 1,184 (129) 328 405 604
INCOME (LOSS) BEFORE INCOME TAX 21,965 (1,028) 20,937 17,551 (652) 16,899 14,502 (720) 13,782
PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 4,089 2 4,091 1,518 4 1,522 1,155 5 1,160
Deferred 742 (675) 67 26 277 303 (77) 125 48
4,831 (673) 4,158 1,544 281 1,825 1,078 130 1,208
NET INCOME (LOSS) P

=17,134 (P
=355) P
= P
=16,779 P
=16,007 (P
=933) =
P P
=15,074 P
=13,424 (P
=850) =
P P
=12,574
Net Income Attributable to:

=12,106 (P
=650) P
= P
=11,456 P
=10,346 (P
=800) =
P P
=9,546 P
=8,508 (P
=568) =
P P
=7,940
NCI 5,028 295 5,323 5,661 (133) 5,528 4,916 (282) 4,634
P
=17,134 (P
=355) P
= P
=16,779 P
=16,007 (P
=933) =
P P
=15,074 P
=13,424 (P
=850) =
P P
=12,574
*SGVFS021831*
- 27 -
6. Material Partly-owned Subsidiaries
In determining whether an NCI is material to the Company, management employs both

quantitative and qualitative factors to evaluate the nature of, and risks associated with, the
Companys interests in these entities; and the effects of those interests on the Companys financial
position. Factors considered include, but not limited to, carrying value of the subsidiarys NCI
relative to the NCI recognized in the Companys consolidated financial statements, the
subsidiarys contribution to the Companys consolidated revenues and net income, and other
relevant qualitative risks associated with the subsidiarys nature, purpose and size of activities.
Based on managements assessment, the Company has concluded that MWHC, NLEX Corp,
MPHHI and Light Rail Manila Holdings Inc (LRMH), the intermediate holding company for
LRMC) are the subsidiaries with NCI that are material to the Company.
The ability of these subsidiaries to pay dividends or make other distributions or payments to their
shareholders (including the Company) is subject to applicable laws and other restrictions
contained in financing agreements, shareholder agreements and other agreements that prohibit or
limit the payment of dividends or other transfers of funds. Such applicable restrictions are as
follows:
Under the financing agreements as disclosed in Note 19, which include satisfying certain
financial ratios in order to be able to declare or pay cash dividends;
Under Philippine law, a corporation is permitted to declare dividends only to the extent that it
has unrestricted retained earnings that represent the undistributed earnings of the corporation
which have not been allocated for any managerial, contractual or legal purposes and which are
free for distribution to the shareholders as dividends; and
Under NLEX Corps shareholders agreement, unless otherwise agreed upon by the
shareholders, no amounts shall be distributed by way of dividends until PNCCs share in the
project revenue collection has been repaid in full.
As at December 31, 2016, retained earnings of =P8.5 billion has been appropriated by Maynilads
BOD for various water and sewerage projects expected to be implemented in the succeeding years.
A further P
=5.0 billion was appropriated based on Maynilads board resolution dated
February 27, 2017.
As at December 31, 2016 and 2015, NLEX Corp has unpaid dividends to non-controlling
shareholders amounting to nil and P
=347.1 million, respectively (see Note 16).
Equity infusion as at December 31, 2015 of the other shareholders in LRMH and LRMC with an
aggregate amount of P =1,847.5 million, are included in Other changes in NCI in the consolidated
statements of changes in equity.
*SGVFS021831*
- 28 -
The summarized financial information are presented before inter-company eliminations but after consolidation adjustments for goodwill, other fair value
adjustments on acquisition and adjustments required to apply uniform accounting policies at group level.
December 31, 2016 December 31, 2015 December 31, 2014

MWHC NLEX Corp MPHHI* LRMC MWHC NLEX Corp MPHHI* LRMC MWHC NLEX Corp MPHHI* LRMC
Equity share held by NCI 47.2% 24.5% 39.9% 45.0% 47.2% 24.5% 39.9% 45.0% 47.2% 24.5% 39.9% 45.0%
Summarized statements of financial position
Current assets P
= 14,049 P
= 2,126 P
= 5,068 P
= 1,500 P
=14,869 P
=5,479 P
=5,817 P
=1,654 P
=11,865 P
=9,043 P
=6,148 =
P508
Non-current assets** 91,716 40,037 13,273 7,366 85,305 32,321 11,358 5,839 79,980 26,633 10,148 1,129
Current liabilities 14,330 4,082 3,351 537 14,726 5,165 3,019 531 13,420 4,619 2,702 71
Non-current liabilities 34,135 21,932 1,587 3,684 33,587 17,935 1,924 2,827 33,855 16,831 2,169
Total equity 57,300 16,149 13,403 4,645 51,861 14,700 12,232 4,135 44,570 14,226 11,425 1,566
Attributable to:
Equity holders of MPIC 32,813 13,602 7,193 2,553 29,941 12,508 6,662 2,273 26,092 12,150 6,238 859
NCI 24,487 2,547 6,210 2,092 21,920 2,192 5,570 1,862 18,478 2,076 5,187 707
Summarized statements of comprehensive income

Revenues 20,224 10,539 8,967 3,016 19,098 8,453 7,553 897 18,363 7,517 6,828
Net income (loss) 7,442 4,058 1,114 511 9,169 2,961 894 78 7,817 2,536 756 (22)
Total comprehensive income (loss) 7,449 4,048 1,104 510 9,150 2,895 890 78 7,830 2,567 756 (22)
Net income (loss) attributable to NCI 3,513 994 538 230 4,329 725 443 35 3,690 679 379 (10)
Dividends declared to NCI 953 634 48 936 592 51 472 531 42
Dividends paid to NCI 953 982 58 936 536 46 472 648 39
Summarized statements of cash flows

Operating 12,056 5,867 1,953 370 13,656 4,164 1,745 267 9,996 3,943 1,513 59
Investing (6,802) (4,658) (2,501) (918) (11,217) (2,726) (1,733) (1,704) (4,081) (6,518) (1,096) (1,129)
Financing (3,345) (3,488) (635) 171 (3,531) (1,723) (486) 2,479 (4,593) 4,027 3,352 1,577
Net increase (decrease) in cash and cash
equivalents 1,909 (2,279) (1,183) (377) (1,092) (285) (474) 1,042 1,322 1,452 3,769 507
Cash and cash equivalents - beginning 3,135 2,669 4,153 1,549 4,227 2,954 4,627 507 2,905 1,502 858
Cash and cash equivalents - end P
= 5,044 P
= 390 P
= 2,970 P
= 1,172 P
=3,135 P
=2,669 P
=4,153 P
=1,549 P
=4,227 P
=2,954 P
=4,627 =
P507
*Includes the 25.51% equivalent shares of the Exchangeable bond (see Note 22)
**Includes goodwill recognized as at acquisition date (see Note 12)
*SGVFS021831*
- 29 -
7. Cash and Cash Equivalents, Short-term Deposits and Restricted Cash
Cash and Cash Equivalents and Short-term Deposits. This account consists of:
2016 2015
(In Millions)
Cash and cash equivalents P
=15,455 =16,469
P
Short-term deposits (see Note 10) 4,014 7,467
P
=19,469 =23,936
P
Cash and cash equivalents include cash in banks and temporary placements that are made for
varying periods of up to three months depending on the immediate cash requirements of the
Company. Cash in banks and temporary placements earn interest at the prevailing bank and
temporary placements rates, respectively.
Short-term deposits are deposits with original maturities of more than three months to one year
from dates of acquisition and earn interest at the prevailing short-term deposits rates. Short-term
deposits account included the Companys UITF (see Note 10).
For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise
of the following as at December 31:
2016 2015 2014

(In Millions)
Cash on hand and in banks P
=3,695 =3,409
P =3,261
P
Short-term deposits that qualify
as cash equivalents 11,760 13,060 14,464
P
=15,455 =16,469
P =17,725
P
Restricted Cash. Restricted cash classified as part of current assets pertains to sinking fund or
debt service account (DSA) representing amounts set aside for semi-annual principal and interest
payments of certain long-term debt. This DSA is maintained and replenished in accordance with
the provision of the loan agreements.
Restricted cash classified as noncurrent asset and shown separately in the consolidated statements
of financial position pertains to cash held in escrow account in relation with the construction
contract for the NLEX Segment 10 (see Note 33).
Interest income from the restricted cash is for the account of the Company.
Interest earned from cash and cash equivalents, short-term deposits and restricted cash amounted
to =
P373.0 million, P
=396.0 million and =
P253.0 million for the years ended December 31, 2016,
2015 and 2014, respectively (see Note 26).
*SGVFS021831*
- 30 -
8. Receivables
This account consists of:
2016 2015
(In Millions)
Trade receivables P
=4,671 =3,737
P
Dividends receivable (see Notes 10 and 11) 79 280
Advances to customers 112 233
Advances to DPWH 180 203
Notes receivable 150 150
Advances to affiliates 106 103
Advances to officers and employees 106 82
Accrued interest receivables 46 58
Others 631 588
6,081 5,434
Less allowance for doubtful accounts 854 848
5,227 4,586
Less current portion 5,171 4,441
Noncurrent portion P
=56 =145
P
Trade Receivables. Trade receivables, which are non-interest bearing, included receivables arising
from the following services: (i) water and sewerage services (with 60-day term); (ii) bulk water
services (with 45 to 60-day term); and (iii) health care services (with 30-day credit term to self-
pay, HMO, international insurance, PhilHealth and corporate accounts). Beginning 2016, trade
receivables included receivables arising from the following services: (i) O&M and EPC
construction services (with 60-day credit term) and (ii) logistics services (with settlement period of
30 to 90 days).
Trade receivables also included amount due from Easytrip Services Corporation (ESC), a joint
venture of MPTC (see Note 21).
Dividends receivable. As at December 31, 2016 and 2015, dividends receivable from equity
method investees amounted P =24.0 million and P=280.0 million, respectively (see Note 11).
Dividends receivable from unlisted shares of stock (included as AFS Financial Assets) amounted
to =
P55.0 million as at December 31, 2016.
Advances to DPWH. Advances made to DPWH is pursuant to the Reimbursement Agreement

entered into by NLEX Corp with DPWH in 2013 whereby DPWH requested these advances in
order to fast track the acquisition of right-of-way for the construction of Phase II Segments 9 and
10 of the NLEX. The balance also includes direct advances to certain Segment 9 landowners as
consideration for the grant of immediate right-of-way possession to NLEX Corp ahead of the
expropriation proceedings. Under a Deed of Assignment with Special Power of Attorney
agreement, these landowners agreed to assign their receivables from DPWH to NLEX Corp in
consideration for the direct advances received from NLEX Corp. These advances to DPWH are
noninterest-bearing and are collectible within a year.
Notes Receivable. Notes receivable aggregating P

=150.0 million comprising of defaulted loans are
fully provided with allowance as at December 31, 2016 and 2015.
*SGVFS021831*
- 31 -
Advances and Other Receivables. Advances include advances to customers, affiliates and officers
and employees and are generally collectible within a year. Other receivables mainly represent
advances to former subsidiaries and related parties (see Note 21). Certain of these advances to
former subsidiaries and affiliates of the Company are fully provided with allowance.
Movements in the allowance of individually and collectively assessed impaired receivables are as
follows:
2016
Balance at Write-off/ Balance at
January 1, Provisions Reversal December 31,
2016 (see Note 24) (see Note 27) 2016
(In Millions)
Individually impaired:
Trade receivables =2
P P1
= P
= =3
P
Others 50 10 60
202 11 213
Collectively impaired:
Trade receivables 558 72 (77) 553
Advances to other affiliates 12 12
Others 76 76
646 72 (77) 641
=848
P =83
P (P
=77) =854
P
2015
Balance at Write-off/ Balance at
January 1, Provisions Reversal December 31,
2015 (see Note 24) (see Note 27) 2015
(In Millions)
Individually impaired:
Trade receivables =2
P P
= P
= =2
P
Others 9 41 50
161 41 202
Collectively impaired:
Trade receivables 759 61 (262) 558
Advances to other affiliates 12 12
Others 76 76
847 61 (262) 646
=1,008
P =102
P (P
=262) =848
P
*SGVFS021831*
- 32 -
9. Other Current Assets

Other current assets consist of the following:
2016 2015
(In Millions)
(a)
Advances to contractors and consultants P
=1,518 =1,108
P
Input VAT 1,354 999
Inventories - at cost (see Note 23) 771 550
Creditable withholding tax (CWT) (b) 605 565
Prepaid expenses (c) 337 212
Real estate for sale (d) 119 135
AFS financial assets (see Note 10) 5 235
Deposits for LTIP (see Note 25) 373
Miscellaneous deposits and others (e) 262 124
4,971 4,301
Less allowance for decline in value (b) 335 363
P
=4,636 =3,938
P
a. Advances to contractors and consultants mainly represent the advance payments for
mobilization of the contractors and consultants for various contracts. These are progressively
reduced upon receipt of the equivalent amount of services rendered by the contractors and
consultants.
b. This represents amount withheld by counterparty for services rendered by the Company which
can be claimed as tax credits. Management provided allowance for decline in value
representing CWT recognized in prior years that the Company may no longer be able to
utilize.
c. Prepaid expenses mainly pertains to insurance, premium bond and taxes and licenses.
d. Real estate for sale is recognized at lower of cost and net realizable value (NRV). This
account consists of land, development costs on residential resort community and central
business district, condominium units and parking lots.
e. This account mainly consists of advances to suppliers and other miscellaneous deposits.
10. Available-for-Sale Financial Assets

2016 2015
(In Millions)
Shares of stock:
Quoted P
=19 P18
=
Unlisted 491 521
UITFs 972 1,378
Investment in bonds and notes 1,354 1,714
2,836 3,631
Less: UITFs presented as part of short-term deposits
(see Note 7) 972 1,378
Current portion (see Note 9) 5 235
Noncurrent portion P
=1,859 =2,018
P
*SGVFS021831*
- 33 -
The movements in the AFS financial assets are as follows:
2016 2015
(In Millions)
Balance at beginning of year P
=3,631 P7,503
=
Additions 13,824 17,801
Disposal and maturity (14,679) (21,592)
Unrealized fair value changes 4 (81)
Reversal of impairment (see Note 27) 56
Balance at end of year P
=2,836 =3,631
P
The movements in the unrealized fair value changes of AFS financial assets are as follows:
2016 2015
(In Millions)
Balance at beginning of year (P
=16) P65
=
Change in fair value during the year (see Note 28) 4 (81)
Balance at end of year (P
=12) (P
=16)
Quoted shares of stock represent investments in golf clubs shares stated at their fair values.
Unlisted shares of stock represent the Companys investment in certain unlisted entities
incorporated in the Philippines.
Investment in UITF. UITFs are ready-made investments that allow the pooling of funds from
different investors with similar investment objectives. These UITFs are managed by professional
fund managers and may be invested in various financial instruments such as money market
securities, bonds and equities, which are normally available to large investors only. A UITF uses
the mark-to-market method in valuing the funds securities (see Note 37). While the UITF
remains to be classified as AFS financial assets, the entire investment in UITF is classified under
the short-term deposits account as the fund comprises of short-term money market securities, time
and special deposit accounts with average maturity of less than 30 days (see Note 7).
Investment in bonds and notes. As at December 31, 2016 and 2015, this account consists of
investments in ROP retail treasury bonds, fixed rate treasury notes, long-term negotiable
certificate of deposits and corporate bonds, stated at fair value. This account included investment
in corporate notes issued by MERALCO and PLDT with maturity of up to 2020 and 2021,
respectively. The corporate notes bear fixed interest rate of 4.38% (MERALCO) and 5.23%
(PLDT).
*SGVFS021831*
- 34 -
11. Investments and Advances
The account Investments and advances consist of the following:

2016 2015
(In Millions)
Equity method investees:
Associates:
Material
MERALCO (direct interest) P
=39,035 =40,039
P
DMT 6,409 5,927
CII B&R 3,869 4,104
TMC 1,353 592
Others 4,653 3,996
Joint ventures:
Material Beacon Electric 49,370 29,100
Others 125 115
104,814 83,873
Investment in Beacon Electrics preferred shares
classified as AFS investments 20,622 11,573
Advances to equity method investees 1,120 756
P
=126,556 =96,202
P
In determining whether an equity method investee is material to the Company, management

employs both quantitative and qualitative factors to evaluate the nature of, and risks associated
with, the Companys interests in these entities; and the effects of those interest on the Companys
financial position. Factors considered include, but not limited to, carrying value of the investee
relative to the total equity method investments recognized in the Companys consolidated
financial statements, the equity investees contribution to the Companys consolidated net income,
and other relevant qualitative risks associated with the equity investees nature, purpose and size
of activities.
Equity Method Investees
Investments in Equity method investees pertain to the Companys investments in associates and
joint ventures.
Movements in this account:
2016 2015
(In Millions)
Acquisition costs
=79,419 =48,562
P
Additions during the year:
Beacon electric 19,582
TMC 885
MERALCO (direct interest) 26,156
CII B&R 4,121
Others 192 814
Reclassification 774
Disposal and others (234)
Balance at end of year (Carried Forward) 100,852 79,419
*SGVFS021831*
- 35 -
2016 2015
(In Millions)
Balance at end of year (Brought Forward) P
=100,852 =79,419
P
Accumulated equity in net earnings
Balance at beginning of year 4,525 4,118
Share in net earnings (losses) for the year:
Beacon electric 3,053 1,765
MERALCO (direct interest) 2,751 2,209
DMT 559 478
TMC 292 273
CII B&R (11) 174
Others 164 115
Dividends:
MERALCO (direct interest) (4,240) (1,621)
Beacon electric (3,173) (2,140)
TMC (414) (301)
DMT (366) (288)
CII B&R (224) (191)
Others (88) (66)
Balance at end of year 2,828 4,525
Accumulated share in the investees other
comprehensive income (OCI)
Balance at beginning of year 439 840
Share in investees OCI during the year 1,579 (401)
Total 2,018 439
Less allowance for impairment loss
Balance at beginning of year 510 674
Provision 774
Reversal (400)
Disposal and others (164)
Total 884 510
P
=104,814 =83,873
P
Material Associate and Joint Venture. The Companys investments in material associates and
joint venture substantially comprise of MPICs investments in:
Place of Ownership Interest in %

Incorporation Principal Activities 2016 2015
Associates:
MERALCO - Direct Philippines Power 15.0 15.0
MERALCO - Indirect Philippines Power 26.2 17.5
GBPC Indirect a Philippines Power 42.0
DMT b, c Thailand Tollways 29.4 29.5
CII B&R b Vietnam Tollways 44.9 44.9
TMC b Philippines Tollways 60.0 46.0
Joint Venture:
Beacon Electric Philippines Holding Company/Power 75.0 50.0
(a)
Held through BPHI.
(b)
Beginning 2016, investments in DMT, CII B&R and TMC were included as material investees. 2015 information provided for comparative purposes.
(c)
Slight dilution with the transfer of the investment from MPICs wholly-owned subsidiary to MPTC (see Note 42).
*SGVFS021831*
- 36 -
Material investees Power
Beacon Electric. Beacon Electric, a company incorporated in Philippines, was initially organized
with the sole purpose of holding the respective shareholdings in MERALCO of PLDT
Communications and Energy Ventures (PCEV) and the Parent Company and for subsequent
acquisitions of MERALCO shares. As at December 31, 2016 and 2015, Beacon Electric has
34.96% ownership interest in MERALCO.
The Company has 75% and 50% ownership interest in Beacon Electric as at December 31, 2016
and 2015. The increase in ownership stake in Beacon Electric resulted from MPICs acquisition
from PCEV of 645,756,250 common shares of Beacon Electric on May 30, 2016 at a price of
P
=31.612 per share or = P20.4 billion at nominal value. On the same date, MPIC also acquired from
PCEV 458,370,086 preferred shares of Beacon Electric constituting 25% of the total economic
rights on the outstanding preferred shares of Beacon Electric at a price of = P12.62 per share or
=
P5.8 billion at nominal value. Of the total consideration of P =26.2 billion, =
P17.0 billion was settled
immediately while the remaining payable to PCEV shall be paid as follows: (a) P =2.0 billion in
June 2017, (b) P=2.0 billion in June 2018, (c) =P2.0 billion in June 2019, and (d) P=3.2 billion in June
2020. In consideration of the agreement of PCEV to receiving the purchase price on installments,
MPIC agrees that for as long as: (i) PCEV owns at least 20% of the outstanding capital stock of
Beacon Electric, or (ii) the purchase price has not been fully paid by MPIC, PCEV shall retain its
right to vote 50% of the outstanding capital stock of Beacon Electric. As at December 31, 2016,
remaining amount due to PCEV of = P9.2 billion (nominal amount) was recognized at its net present
value of =P8.4 billion and is included in the due to related parties account (see Note 21).
In May 2016, MPIC and PCEV each entered into separate Subscription Agreements with Beacon
Electric for the subscription of 554,675,120 Class B preferred stocks at a total subscription price
of P
=7.0 billion. MPICs share of the total subscription price amounting to P=3.5 billion, is included
under Investment in Beacon Electrics preferred shares classified as AFS investments
(see discussion below). Beacon Electric used proceeds from this transaction and internal cash
flows to infuse capital into BPHI for the acquisition of 56% of the ordinary and issued capital of
GBPC.
On May 27, 2016, BPHI entered into a Share Purchase Agreement with GTCHI to acquire an
aggregate of 56% of the ordinary and issued share capital of GBPC for a total consideration of
=
P22.06 billion. The consideration was settled as to P
=11.03 billion in cash on closing and the
balance via a vendor financing facility, which was replaced with long-term bank debt in
August 2016.
The summarized financial information is based on Beacon Electrics financial statements using the
equity method of accounting for investments in MERALCO and BPHI:

2016 2015
(In Millions)
Statements of comprehensive income
Equity in net earnings in MERALCO =6,425
P =6,899
P
Equity in net earnings in BPHI 592
Interest expense (915) (1,769)
Interest income 223 455
Income tax expense
Net income 6,319 6,539
Total comprehensive income 7,458 6,042
Dividends received by MPIC from Beacon Electrics
common shares 3,173 2,140
*SGVFS021831*
- 37 -
December 31
2016 2015
(In Millions)
Statements of financial position - Beacon Electric
Current assets P3,118
= P10,874
=
Investments in associates 97,308 87,831
Current liabilities 1,292 1,231
Noncurrent liabilities 10,664 12,149
Net assets 88,470 85,325
Less: Equity attributable to preferred shareholder
(including dividends in arrears) 30,160 26,386
Net assets attributable to common shareholders of Beacon Electric 58,310 58,939
MPICs ownership interest in Beacon Electric 75% 50%
MPICs share in net assets of Beacon Electric 43,733 29,470
Provisional goodwill and fair value adjustments* 6,007
Other adjustments** (370) (370)
Carrying amount of MPICs investment in Beacon Electric =49,370
P =29,100
P
The above amounts of Beacon Electrics assets and liabilities

include the following:
Cash and cash equivalents P3,107
= P2,270
=
Current financial liabilities*** 1,195 1,084
Non-current financial liabilities*** 9,981 11,176
*Pending finalization of the 2016 acquisition of Beacon Electric shares
**Includes gain on sale of Meralco shares held by Beacon Electric
***Excluding trade and other payables and provisions
The following facilities entered into by Beacon Electric and BPHI are not guaranteed by the
Company. As Beacon Electric and BPHI are accounted for using the equity method, these
facilities are not included in Companys consolidated debt.
Interest Rate
Description (per annum) Terms 2016 2015
(In Millions)
Beacon Electric
=
P11,000.0 Million Fixed Corporate Notes
P
=4,000.0 million (1st Tranche) 8.00% Availed of beginning 2011; P
= 3,120 P
=3,480
payable in 10 years with semi-
P
=7,000.0 million (2nd Tranche) 7.09% annual interest and principal 5,460 6,090
repayments; final repayment in
May 2021
P
=2,950.0 million (Tranche A of the 6.00% Availed of in 2013; payable in
=
P9,000.0 Million Corporate Notes) 10 years payable with semi-
annual interest and principal
July 2023 2,685 2,803
BPHI
=
P12,000.0 Ten-Year Term Loan Facility 5.55% Availed of in August 2016;
payable in 10 years with semi-
annual interest and principal
August 2026 12,000
Total P
= 23,265 P
=12,373
*SGVFS021831*
- 38 -
Beacon Electrics loans are secured by a pledge on MERALCO shares owned by Beacon Electric
and shall, from the date of the pledge over the MERALCO shares, maintain the loan to value ratio
at 50%, subject to call/top up (in case the Loan to Value Ratio of the Pledge Shares is in excess of
60%) or a withdrawal (in case the Loan to Value Ratio of the Pledge Shares is below 40%). The
loan agreements also contain certain provisions which include the maintenance of a Debt Service
Account to be used by Beacon Electric to service interest payments and principal repayments and
maintenance of financial ratios such as debt-to-equity ratio, debt-service coverage ratio and loan to
value ratio.
BPHIs loan is secured by a pledge on GBPC shares owned by BPHI. Others covenants include
maintenance of reserve account and achieving certain financial ratios such as (i) Debt Service
Coverage Ratio (DSCR) at a minimum of 1.1x, to be first calculated in 2018; and (ii) DSCR
before any restricted payments at 1.3x.
As at December 31, 2016 and 2015, Beacon Electric and BPHI are in compliance with all the
requirements stipulated in the loan agreements.
MERALCO. MERALCO is a Philippine corporation with its shares listed on the PSE. It is the
largest distributor of electricity in the Philippines with its franchise valid until June 2028.
Investment in MERALCO is held directly by MPIC at 15.0% as at December 31, 2016 and 2015,
and held indirectly through Beacon Electric at an effective interest of 26.2% and 17.5% as at
December 31, 2016 and 2015, respectively. Based on MPICs total effective ownership interest of
41.2%, 32.5% and 22.5% in MERALCO as at December 31, 2016, 2015 and 2014, respectively,
MPICs effective share in net earnings of MERALCO amounted to P =5,360.6 million,
P
=3,974.2 million and =P2,566.5 million in 2016, 2015 and 2014, respectively.
The carrying values and fair values of the MERALCO shares held indirectly through Beacon
Electric and held directly by the Parent Company are as follows:
Ownership Carrying Fair
Interest in % Value Value
(In Millions)
As at December 31, 2016 Indirect* 26.22 P
=64,128 P
=78,319
Direct 15.00 39,035 44,802
As at December 31, 2015 Indirect* 17.48 P
=43,916 P
=62,793
Direct 15.00 40,039 53,881
* Represents MPICs proportionate share in Beacon Electrics investment in MERALCO using equity method
(for the carrying value) and at fair value.
The summarized financial information below is based on MERALCOs December 31, 2016 and
2015 consolidated financial statements:
As at and For the Years Ended December 31
2016 2015
(In Millions)
Consolidated statements of comprehensive income
Revenues P257,181
= P258,399
=
Costs and expenses 231,473 234,991
Other income - net 985 1,468
Income before income tax 26,693 24,876
Net income 19,340 19,189
Total comprehensive income 22,573 18,384
Total comprehensive income attributable to common
shareholders of MERALCO 22,409 18,293
(Forward)
*SGVFS021831*
- 39 -
As at and For the Years Ended December 31

2016 2015
(In Millions)
Consolidated statements of financial position
= P95,295
=
Noncurrent assets 236,835 216,949
Current liabilities 104,602 93,215
Noncurrent liabilities 124,931 117,165
Net assets 95,310 101,865
Less: Equity attributable to NCI (729) (585)
Net assets attributable to common shareholders
of MERALCO 94,581 101,280
MPICs direct ownership interest in MERALCO 15% 15%
MPICs direct share in net assets of MERALCO 14,188 15,192
Goodwill 24,847 24,847
Carrying amount of MPICs direct investment
in MERALCO P
=39,035 P
=40,039
GBPC. MPICs ownership stake in GBPC is held indirectly at an effective interest of 47.8%
through BPHI (at 42.0% effective interest) and through MERALCO (at 5.8% effective interest).
GBPC is a holding company which, through its subsidiaries, is one of the leading independent
power producers in the Visayas region and Mindoro island. As at December 31, 2016, its
combined gross maximum capacity is at 854 MW, which included a 150 MW coal-fired
circulating fluidized bed plant in Panay undergoing final acceptance.
GBPCs power generation facilities consist of: (i) 246 MW clean coal-fired power plant in Toledo
City, Cebu, which is operated by Cebu Energy Development Corporation; (ii) 164 MW clean
coal and 150 MW coal-fired power plants in Iloilo City, which is operated by Panay Energy
Development Corporation; (iii) 60 MW coal facility, an 82 MW coal facility and a 40 MW fuel oil
facility operated by Toledo Power Company; (iv) a 72 MW fuel oil facility, a 20 MW fuel oil
facility, a 7.5 MW fuel oil facility and a 5 MW fuel oil facility operated by Panay Power
Corporation; and (v) 7.5 MW fuel oil facility operated by GBH Power Resources Inc.
GBPC enters into bilateral off-take arrangements through Electric Power Purchase Agreements
between its generation subsidiaries and the power-off-takers such as distribution utilities, electric
cooperatives and other industrial off-takers which together accounted for 95% of GBPCs total
electricity sales for the year ended December 31, 2016.
The summarized financial information provided below is based on GBPCs consolidated financial
statements. However, the disclosures required under the PFRS 12, Disclosure of Interests in
Other Entities providing reconciliation between the summarized financial information to the
carrying amount of the investors interest in associate is not provided in these financial statements
as MPICs investment in GBPC is already subsumed in the Companys investment in Beacon
Electric. The effect of the purchase price allocation prepared in relation to the acquisition of
interest in GBPC, in which a provisional goodwill of P =3,919.0 million was determined, is also
subsumed in the Companys investment in Beacon Electric.
(In Millions)
Consolidated statements of comprehensive income
Revenues P17,546
=
Costs and expenses 11,518
Finance cost 2,062
Other income - net 102
Income before income tax 4,068
*SGVFS021831*
- 40 -

(In Millions)
Net income P4,020
=
Total comprehensive income 5,085
Atttributable to GBPC shareholders:
Net income 2,644
Total comprehensive income 3,704
December 31, 2016

Consolidated statements of financial position
=
Noncurrent assets 55,036
Current liabilities 10,849
Noncurrent liabilities 35,324
Total equity 32,411
Equity attributable to GBPC shareholders 27,460
Material investees Toll

DMT. DMT is a major toll road operator in Bangkok, Thailand. The concession for DMT runs
until 2034 for the operation of a 21.9-kilometer six-lane elevated toll road from central Bangkok to
Don Muang International Airport and further to the National Monument, north of Bangkok.
CII B&R. On January 14, 2015, MPTC entered into an equity investment and financing
transaction with Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) that will
result in MPTC holding a significant minority equity interest equal to about 45% of the
outstanding capital of CII B&R through a combination of purchase of CII B&R secondary shares
from CII, and subscription to VND-denominated bonds to be issued by CII, which are
exchangeable into secondary shares in CII B&R. Aggregate acquisition costs for the CII B&R
shares and CII bonds amounted to VND1,955 billion (approximately P =4.1 billion). The CII bond
and the acquired shares in CII B&R are accounted for as equity investment with CII B&R as an
associate starting March 2015. CII B&R has various road and bridge projects in and around Ho
Chi Minh City.
TMC. Pursuant to the Operation and Maintenance Agreement with NLEX Corp, TMC is
responsible for the operation and maintenance of both the NLEX Project and Segment 7. TMC
also operates and manages the SCTEX, pursuant to a letter agreement entered into by NLEX Corp
and TMC in May 2015 (see Note 21).
On December 28, 2016, MPTDC, acquired 53,200 TMC common shares from Egis Road
Operation S.A., representing 14% of the total issued and outstanding capital stock of TMC for a
total purchase price =
P884.7 million. This transaction increased MPTDCs interest in TMC to
60%. However, despite ownership interest of 60%, investment in TMC remains to be accounted
for as an associate as another significant shareholder holds significant veto rights relating to
changes to operating and dividend policies that affect investors returns.
*SGVFS021831*
- 41 -
The tables below provide summarized financial information for the Toll groups material
investees. The information disclosed reflects the amounts presented in the financial statements of
the relevant associates and not the Companys share of those amounts. They have been amended
to reflect adjustments made by the entity when using the equity method, including fair value
adjustments and modifications for differences in accounting policy.
For the Year Ended December 31

2016 2015
DMT CII B&R TMC DMT CII B&R TMC
In Millions
Summarized statements of comprehensive income
Operating revenues P
= 3,974 P
= 449 P
= 2,047 P
=3,488 P
=278 P
=2,018
Cost and operating expenses (1,420) (413) (1,324) (1,270) (361) (1,312)
Other income (expenses) net (176) 275 127 (188) 492 78
Income before income tax 2,378 311 850 2,030 409 784
Provision for income tax (481) (12) (217) (405) (21) (189)
Net income 1,897 299 633 1,625 388 595
Other comprehensive income (loss) (3) 6
Total comprehensive income 1,897 135 630 1,625 388 601
Dividends received 366 224 414 288 191 301
Summarized statements of financial position

Current assets 475 4,505 692 499 4,311 874
Non-current assets 25,647 12,750 828 24,735 13,720 1,076
Current liabilities 2,846 2,495 706 640 2,642 664
Non-current liabilities 6,129 8,917 4 9,083 7,676
Net assets 17,147 5,843 810 15,511 7,713 1,286
Ownership interest 29.5% 44.9% 60.0% 29.5% 44.9% 46.0%
Share in net assets of the investee 5,050 2,626 486 4,568 3,466 592
Goodwill and other fair value adjustments 1,359 1,243 867 1,359 638
Carrying amount of the investment P
= 6,409 P
= 3,869 P
= 1,353 P
=5,927 P
=4,104 P
=592
Individually immaterial investees. The Company has interests in the following individually
immaterial investments in associates and joint ventures:
Ownership Interest in %
Place of
Incorporation Principal Activities 2016 2015
Associates:
Manila Water Consortium Inc. (MWCI) (a) Philippines Investment holding/ Water 39.0 39.0
EquiPacific HoldCo Inc. (EHI) (b) Philippines Investment holding/ Water 30.0 30.0
Watergy Business Solutions, Inc. (WBSI) (c) Philippines Investment holding/ Water 49.0 49.0
Karayan Diliman Management, Inc. * Philippines Engineering consultancy 40.0
Davao Doctors Hospital, Inc. (DDH) (d) Philippines Hospital operation 35.2 35.2
Medical Doctors Inc. (MDI) (d) Philippines Hospital operation 33.0 33.1
Manila Medical Services, Inc. (MMSI) (e) Philippines Hospital operation 20.0 20.0
Operator of contactless payment
AF Payments Inc. (AFPI) (f) Philippines system 20.0 20.0
Management and IT
Indra Philippines, Inc. (Indra Philippines) (g) Philippines consultancy 25.0 25.0
First Gen Northern Energy Corp. (FGNEC) (h) Philippines (see footnote below) 33.3 33.3
Costa De Madera (i) Philippines Real estate 62.0 62.0
Metro Pacific Land Holdings, Inc. Philippines Real estate 49.0 49.0
Joint Venture:
Easytrip Services Corporation (ESC) (j) Philippines ETC system provider 50.0 50.0
Landco (k) Philippines Real estate 38.1 38.1
Metro Sanitas Corporation* Philippines Clinical management 50.0
Lipa Medix Cancer Center Corporation* Philippines Oncology treatment center 50.0
*Incorporated in 2016
*SGVFS021831*
- 42 -
a. MPWIC acquired 20% effective ownership interest in Cebu Manila Water Development, Inc.
(CMWD) through a 39% direct ownership interest in MWCI. The cost of the Companys
investment in MWCI is at = P133.8 million. CMWD and Metropolitan Cebu Water District
signed a 20-year Water Purchase Agreement for the supply of 18 million liters of water per
day for the first year and 35 million liters of water per day for the second to 20th year.
CMWD made its initial delivery of water in January 2015.
b. On November 3, 2015, EHI and the Laguna Water District (LWD) entered into a Joint
Venture Agreement (JV Agreement) for the financing, rehabilitation, improvement,
expansion, operation and maintenance of the Water Supply System of the LWD. Pursuant to
the JV Agreement, EHI and LWD, at ownership interest of 90% and 10%, respectively,
created and established Laguna Water District Aquatech Resources Corp. (LARC) with the
primary purpose to act as operator, contractor and/or agent of the LWD and shall be
responsible for the financing, rehabilitation, improvement, expansion, operation and
maintenance of LWDs water supply system. The JV Agreement is for a term of twenty-five
(25) years from January 1, 2016.
c. On December 16, 2015, MPWIC completed the acquisition of 49% ownership stake of the
capital stock of WBSI from seller, MacroAsia Properties Development Corporation
(MAPDC). Fifty percent (50%) of the total purchase price of =
P37.1 million was settled on
December 16, 2015 while the balance equivalent to 50% will be settled upon delivery of
additional closing documentation by MAPDC. WBSI is a party to the Contractual Joint
Venture Agreement (Contractual JVA) which purpose was to develop a bulk water supply
project to be sourced from the Maragondon River. The agreement shall be for a period of 25
years from the commencement date. Commencement date has not taken place as at
December 31, 2016.
d. DDH is a tertiary level and multi-specialty hospital located in Davao City. MDI is the owner
and operator of Makati Medical Center. Ownership interests in DDH and MDI reflected in the
previous table are at MPHHI level. On a fully diluted basis, MPICs effective ownership
interest in DDH is at 21.1% as at December 31, 2016 and 2015. Ownership interest in MDI
on a fully diluted basis at 19.8% and 19.9% as at December 31, 2016 and 2015, respectively.
e. On December 28, 2015, MPHHI completed the acquisition of a 20% equity interest in MMSI
from Metrobank Foundation, Inc. Total acquisition cost amounted to P =368.0 million. MMSI
is the owner and operator of Manila Doctors Hospital. Ownership interests in MMSI reflected
in the table above are at MPHHI level. On a fully diluted basis, MPICs effective ownership
interest in MMSI is at 12.0%.
f. In 2014, the AFPI was granted the rights and obligations to design, finance, construct, operate,
and maintain the Automated Fare Collection System (AFCS) Project for LRT-1, LRT-2, and
Metro Railway Transit Line 3 (MRT-3). The AFCS Project, which was founded under the
Build-Operate-Transfer Law, accommodates a contactless smartcard technology based on
International Standards Organization (ISO) 14443 A/B for stored value ridership and ISO
14443 A/B contactless medium technology for single journey ridership. This system shall be
expandable to allow the inclusion of accepted participants and issuers into a generic
micropayment solution fulfilling other commercial functions. AFPI had its Full System
Acceptance (FSA) on December 16, 2015. Unless otherwise extended or terminated in
accordance with the Service Concession Agreement, the concession period shall commence on
FSA date and end 10 years from the FSA date.
*SGVFS021831*
- 43 -
g. On October 14, 2015, MPIC acquired from MERALCO 84,012 common shares, comprising
24.95% of the outstanding capital stock of Indra Phils. for an aggregate purchase price of
=
P326.5 million. Indra Phils. is a subsidiary of Indra Sistemas, S.A., which has international
knowledge, experience and track record in the information technology business. Indra Phils.
is one of the leading providers of information technology solutions to various businesses and
industries in the Philippines, with engagements in utilities and telecommunications, financial
services and public administration.
h. MPIC subscribed for 250,000 common shares, representing 33.3% interest of FGNEC, at
P
=0.3 million initial investment on March 17, 2010. MPIC participated in the bidding for the
proposed sale of the 246 MW Angat Hydroelectric Power Plant through FGNEC but was only
declared as the second ranking bidder. On July 22, 2015, the BOD of FGNEC approved the
shortening of the corporate life of FGNEC to until December 31, 2016.
i. NOHI has 62% interest in Costa de Madera but was accounted for as an investment in
associate as control and management rests with the other shareholders of the company. Since
December 31, 2012, the investment costs was partially provided with an allowance for decline
in value amounting to =P400.0 million. In 2016, this allowance for decline in value was
reversed due to improvement in realizable value (see Note 27).
j. In 2014, MPTDC acquired equity interest equivalent to 50% plus one share of the capital
stock of ESC for a total consideration of P
=103.0 million. ESC is primarily engaged in the
business of providing services related to electronic toll collection (ETC) system to include
among others, the implementation of inter-operability of the different toll collection systems
of tollways in the country, account management and funding and management of all electronic
pass issued. ESC is the exclusive tag issuer at the NLEX (see Note 21).
k. On December 22, 2014, MPIC entered into an agreement with Landco and its controlling
shareholder, AB Holdings Corporation (ABHC) to restructure and clean up the balance sheet
of Landco in preparation for an eventual sale to third parties. As part of the restructuring
activities, the following activities were completed in 2014: (i) preferred shares issued by
Landco were converted to common shares (thereby increasing investment in common shares
to =
P755.5 million equivalent to 38.1% interest); and (ii) ABHCs payable to Landco were
assumed by MPIC. Under the agreement, MPIC shall be entitled to 66% of the purchase price
of Landcos outstanding common stock in the event of sale of Landcos outstanding capital
stock to a third party. As a result of the planned divestment of the interests in Landco, the
carrying values of the notes receivable from Landco and ABHC and the investment in
Landcos common shares were reclassified to Assets held for sale as at December 31, 2014.
The carrying amount of all interests in Landco, at that time, was expected to be recovered
principally through a sale transaction and the sale was highly probable.
However, the expected disposal did not happen in 2015 nor in 2016 and as such, the
investment no longer met the held for sale criteria as at December 31, 2016. The investment
in Landco common shares ceased to be classified as held of sale and starting
December 31, 2016, has been classified as investment in joint venture and was fully provided
for an allowance in decline in value (see Note 27). Retrospective adjustment for the prior
years share in net income (loss) to the current year beginning retained earnings is no longer
recognized due to immateriality. The decline in the value of MPICs interest in Landco was
due to changes in cash flow forecast attributable to Landcos legacy projects. The loans
receivable from Landco and ABHC were also reclassified to Advances to equity method
investees under the Investment and advances account (P =508.1 million) and Other non-
current assets (P
=359.8 million), respectively.
*SGVFS021831*
- 44 -
The recoverable amount of the investment in Landco was measured using the estimate of the
value in use of the investment in joint venture. The valuation analysis involved discounting
estimates of free cash flows by the appropriate discount rate that reflects the risk and return
profile of Landco as of testing. The estimates of cash flows comprise revenue projections,
related costs and expenses, net working capital requirements and capital expenditures
expected to be incurred from Landco's projects. These cash flows were discounted using
weighted average cost of capital of 10.14% as the discount rate as of testing date.
The following table analyzes, in aggregate, the Companys share in the net income and OCI of
these investees for the years ended December 31:
2016 2015
Joint Venture Associate Joint Venture Associate
(In Millions)
Carrying amount of investment P
=125 P
=5,162 =115
P =3,996
P
Share in:
Net income 11 154 9 105
OCI
Total comprehensive income 11 154 9 105
The following table summarizes, in aggregate, the assets and liabilities of these investees:
2016 2015
Joint Venture Associate Joint Venture Associate
(In Millions)
Current assets P
=469 P
=5,574 =393
P P4,525
=
Noncurrent assets 41 14,355 38 13,027
Current liabilities 441 3,426 384 2,707
Noncurrent liabilities 5 3,487 3 3,225
Dividend income 88 66
Other transactions with these investees are disclosed in Note 21.
Investment in Beacon Electrics preferred shares classified as AFS investments

The Company owns 75% and 50% of the Beacon Electrics issued preferred shares as at
December 31, 2016 and 2015. The increase in investment in preferred shares resulted from
MPICs subscription of Class B preferred shares and MPICs acquisition of preferred stocks
owned by PCEV representing 25% of the total issued preferred shares (see discussion above).
The preferred shares of Beacon Electric are non-voting, non-convertible to common shares or any
shares of any class of Beacon Electric, have no pre-emptive rights to subscribe to any share or
convertible debt securities or warrants issued or sold by Beacon Electric. The preference
shareholder is entitled to liquidation preference and yearly cumulative dividend at the rate of 7%
(for Class A) and 6% (for Class B) of the issue value subject to (a) availability of unrestricted
retained earnings; and (b) dividend payment restrictions imposed by Beacon Electrics bank
creditors.
Investment in Beacon Electrics preferred shares are carried at cost. For the years ended
December 31, 2016, 2015 and 2014, the Parent Company received dividends from Beacon
Electrics preferred shares amounting to P
=1,215.0 million, =P405.1 million and P=405.1 million,
respectively (see Note 27). As at December 31, 2016 and 2015, total cumulative dividends on
preferred shares, owed to both MPIC and PCEV not yet declared by Beacon Electric, amounted to
a total of =
P2,536.8 million and P
=3,240.5 million, respectively.
*SGVFS021831*
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12. Goodwill and Service Concession Assets not yet Available for Use
The Company performs its annual impairment test close to year-end, after finalizing the annual
financial budgets and forecasts. The impairment test is based on VIU calculations that use the
discounted cash flow model. Cash flow projections are based on most recent financial budgets
and forecast. Discount rates applied are based on market weighted average cost of capital with
estimated premium over cost of equity. The key assumptions used to determine the recoverable
amount for the different CGUs are discussed below.
Based on the impairment tests performed, management did not identify impairment losses for the
goodwill and the service concession assets not yet in use. Management also believes that no
reasonably possible change in any of the key assumptions would cause the carrying values of the
CGUs and the service concession assets not yet in use to materially exceed their respective
recoverable amounts.
Goodwill acquired from the Companys acquisitions in 2016 (ESTII, MVMC and MMI) are based
on provisional values (see Note 4). Impairment testing will commence on the period the initial
accounting will be finalized, which should not be more than 12 months from date of acquisition.
No impairment indicators exist as at December 31, 2016 for these acquisition.
Goodwill
The carrying amount of goodwill allocated to each of the CGU (determined to be at the subsidiary
level):
2016 2015
(In Millions)
Water:
MWHC/Maynilad P
=6,803 =6,803
P
ESTII (see Note 4) 894
PHI 288 288
Toll operations:
MPTC 5,749 5,749
CIC 4,966 4,966
Healthcare:
MVMC (see Note 4) 662
CVHMC 234 234
Asian Hospital Inc. (AHI) 192 192
RMCI 69 69
De Los Santos Medical Center Inc. (DLSMC) 7 7
Logistics:
MMI (see Note 4) 1,140
P
=21,004 =18,308
P
Water and toll operations segments
December 31, 2016 December 31, 2015

CGUs of the water segment
Maynilad PHI Maynilad PHI
Volume growth rate (a) 3.3% 1.1% 2.5% 2.0%
Average forecast period 21 years 19 years 22 years 20 years
Discount rate 9.4% 10.3% 8.7% 8.7%
*SGVFS021831*
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CGUs of the toll operations segment
MPTC CIC MPTC CIC
Average growth (a, b) 2.5% and 2.8% 4% to 5% 1.8% and 2.0% 0.2% to 3.4%
Average forecast period 21 years 17 to 34 years 22 years 18 to 30 years
Discount rate 8.8% 8.8% 8.2% 8.2%
(a)
Average growth represents average of year-over-year growth during the entire concession period.
(b)
Traffic volume for the Open system and Journey for the Closed system.
The forecasted periods are greater than five (5) years as management can reliably estimate the
cash flow for the entire duration of the concession periods. The average forecast period is
consistent with the period covered by the concession agreements and certain expansion projects
within the concession (see Note 1).
Healthcare segment

RMCI CVHMC AHI DLSMC RMCI CVHMC AHI DLSMC
Average occupancy rate 77.0% 77.0% 57.0% 67.0% 73.0% 68.0% 50.0% 56.0%
Discount rate 10.4% 10.4% 10.4% 10.4% 11.3% 11.3% 11.3% 11.3%
Average forecast period for purposes of goodwill impairment testing for DLSMC, RMCI and AHI
is at five (5) years with terminal value computed based on a zero-growth assumption for forecasts
beyond the 5-year period. The length of the projection for CVHMC is consistent with the
remaining lease term (see Note 33).
Service Concession Assets not yet Available for Use

The carrying amount and the respective key assumptions used to determine the recoverable
amount for the intangible assets as at December 31, 2016 are discussed below:
Toll Rail
LRT-1-
CALAX Segment 10 Connector CCLEX Extension
Carrying value (in millions) P

=22,362 P
=6,266 P
=2,508 P
=132 P
=3,199
Net carrying value (in millions) P
=5,302 P
=5,542 P
=172 P
=93 P
=1,566
Average growth 9.5% 12.4% 6.0% 8.4% 8.9%
Average forecast period 34 years 21 years 38 years 35 years 30 years
Discount rate 8.6% 8.6% 8.6% 8.6 7.7%
The aggregate carrying values of these intangible assets amounting to P=34,466.9 million and
P
=27,783.2 million as at December 31, 2016 and 2015, respectively, are included in the carrying
values of the service concession assets as disclosed in Note 13. For purposes of impairment testing
in 2016, the carrying values that were compared to the recoverable values are net of the present
value of future concession fees payments that formed part of the initial cost of these service
concession assets. Most of these service concession assets were only recognized in 2015 and there
were no indicators of impairment then; hence, no impairment testing were performed in 2015.
Average growth represents expected growth in traffic for CALAX, Segment 10, NLEX-SLEX
Connector and CCLEX. Average growth represents expected growth in ridership for the LRT-1-
Extension. The average forecast period is consistent with the period covered by the concession
agreements (see Note 1).
*SGVFS021831*
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13. Service Concession Assets
The account service concession assets consist of the following:
2016 2015
(In Millions)
Water:
Maynilad P
=81,546 =75,410
P
PHI 579 406
MIBWSC 703
82,828 75,816
Toll operations:
NLEX Corp (NLEX, SCTEX and Connector) 31,791 23,960
CIC (CAVITEX) 9,155 9,295
MPCALA (CALAX) 22,362 21,059
CCLEC (CCLEX) 132
63,440 54,314
Rail:
LRMC (LRT-1) 6,425 5,630
P
=152,693 =135,760
P
The movements in the service concession assets follow:

2016
Water Toll Rail Total
(In Millions)
Cost:
=92,484 P
=59,165 P
=5,630 P
=157,279
Additions 9,662 8,054 552 18,268
Capitalized borrowing cost 199 1,902 243 2,344
Balance at end of year 102,345 69,121 6,425 177,891
Accumulated amortization:
Balance at beginning of year 16,668 4,851 21,519
Additions (see Note 23) 2,849 830 3,679
Balance at end of year 19,517 5,681 25,198
P
=82,828 P
=63,440 P
=6,425 P
=152,693
2015
Water Toll Rail Total
(In Millions)
Cost:
=84,884 P
=31,578 =
P P
=116,462
Additions 8,133 26,634 4,449 39,216
Capitalized borrowing cost 99 953 62 1,114
Effect of change in rebased rate (632) (632)
Reclassification 1,119 1,119
Balance at end of year 92,484 59,165 5,630 157,279
Accumulated amortization:
Balance at beginning of year 14,145 4,057 18,202
Additions (see Note 23) 2,523 794 3,317
Balance at end of year 16,668 4,851 21,519
P
=75,816 P
=54,314 P
=5,630 P
=135,760
Service Concession Assets Water. This represents the exclusive right granted to Maynilad, PHI
and MIBWSC to provide water distribution, sewerage services, water production and charge users
for these services during the concession period (see Note 1).
*SGVFS021831*
- 48 -
Additions in 2016 included (i) Maynilads costs of rehabilitation works and additional
construction; (ii) Maynilads additional concession fees pertaining to the drawn portion of the
MWSS loans relating to new projects (Note 38); and (iii) upfront payment in connection with
MIBWSCs bulk water agreement (see Note 1). As stipulated in the JV Agreement for the BWS
Project, MIBWSC paid the MIWD, = P600.0 million as consideration for the exclusive use and
possession of the existing facilities for as long as JV Agreement and the Bulk Water Supply
Agreement remain in effect.
Additions in 2015 included Maynilads (i) cost of rehabilitation, additional constructions in

relation to wastewater projects; (ii) additional concession fees pertaining to the drawn portion of
the MWSS loans relating to new projects; (iii) effect of change in the rebased rate amounting to
P
=632.3 million; and (iv) additional concession fees amounting to P =503.5 million mainly pertaining
to 50% share on additional water allocation from the Angat Reservoir, Umiray-Angat Transbasin
Project (UATP)-related local component costs and overruns.
Service Concession Assets Toll Operations. This represents concessions comprising of the rights,
interests and privileges to finance, design, construct, operate and maintain toll roads, toll facilities and
other facilities generating toll-related and non-toll related income (see Note 1).
Additions in 2016 included: (i) approximately = P5.0 billion (excluding capitalized borrowing costs)
pertaining to civil works construction on Segments 2 and 3, Segments 9 and 10, fixed operating
equipment (FOE) design, supply and installation of the toll collection system on Segment 8.1 Phase I
of the NLEX; (ii) SCTEX rehabilitation cost amounting to about P =378.5 million; (iii) approximately
P
=2.3 billion representing the present value of periodic payment to be made to DPWH in relation to the
Connector Project (see Notes 1 and 18); and (iv) pre-construction cost of =P114.7 million for the
CALAX.
Additions in 2015 included: (i) approximately = P3.0 billion (excluding capitalized borrowing costs)
pertaining to civil works construction on Segments 2 and 3, Segments 9 and 10, FOE design, supply
and installation of the toll collection system on Segment 8.1 Phase I of the NLEX; (ii) SCTEX
capitalized costs which included upfront fee paid to BCDA amounting to = P3.1 billion (net of VAT);
and (iii) CALAX capitalized costs which included an upfront fee of = P5.5 billion, present value of
concession fee payable of P =15.4 billion (see Note 18) and other directly attributable cost of
=
P84.0 million.
Service Concession Assets Rail. This represents a concession comprising of the exclusive right
during the concession period to operate and maintain the current LRT-1 system, collect farebox
revenue and construct the LRT-1 Extension (see Note 1).
Additions in 2016 pertain to costs of rehabilitation works, acquisition of rails for the existing LRT-1
system and consultancy cost for LRT-1 Extension project.
As a result of LRMCs take-over of the LRT-1 operations on September 12, 2015 (Effective Date),
accumulated deferred project costs relating to the LRT-1 Project were reclassified from
Other noncurrent assets account to Service concession asset (see Note 15). Other additions to the
rail service concession asset for the year ended December 31, 2015 included present value of the
concession fee payable (see Note 18) and other directly attributable cost totaling =
P933.0 million.
*SGVFS021831*
- 49 -
14. Property and Equipment and Property Use Rights
Property and Equipment. This account consists of:

December 31, Disposals/ December 31,
2015 Additions* Reclassifications 2016
(In Millions)
Cost
Land and land improvements P
=1,152 P
= 126 P
= P
= 1,278
Leasehold improvements 286 290 (2) 574
Building and building improvements 4,595 708 193 5,496
Office and other equipment, furniture
and fixtures 1,606 361 (20) 1,947
Transportation equipment 544 390 (94) 841
Instruments, tools and other equipment 4,031 1,325 (2) 5,352
12,214 3,200 75 15,489
Accumulated Depreciation
Leasehold and land improvements 120 60 180
Building and building improvements 876 181 1,057
and fixtures 879 235 (22) 1,092
Instruments, tools and other equipment 2,118 630 (24) 2,724
4,363 1,211 (130) 5,444
7,851 829 205 10,045
Allowance for impairment loss (23) (23)
Construction-in-progress 188 496 (226) 458
P
=8,016 P
= 2,485 (P
= 21) P
= 10,480
December 31, Disposals/ December 31,

2014 Additions* Reclassifications 2015
(In Millions)
Cost
Land and land improvements P
=1,152 =
P =
P P
=1,152
Leasehold improvements 243 39 4 286
Building and building improvements 3,990 62 543 4,595
and fixtures 1,147 276 183 1,606
Instruments, tools and other equipment 3,380 664 (13) 4,031
10,382 1,155 677 12,214
Accumulated Depreciation
Leasehold and land improvements 80 38 2 120
Building and building improvements 664 212 876
and fixtures 680 212 (13) 879
Instruments, tools and other equipment 1,627 463 28 2,118
3,369 1,001 (7) 4,363
7,013 154 684 7,851
Allowance for impairment loss (23) (23)
Construction-in-progress 378 513 (703) 188
P
=7,368 P
=667 (P
=19) P
=8,016
*Includes both acquisitions through business combination and completion of purchase price allocation.
Land and certain property and equipment were pledged as security for certain interest-bearing
loans of the Company (see Note 19).
*SGVFS021831*
- 50 -
Property Use Rights. This account consists of:

December 31, December 31,
2015 Additions Amortizations 2016
(In Millions)
Cost
Land use rights P
=237 P
= P
= P
=237
Building use rights 540 540
777 777
Accumulated Amortization
Land use rights 50 13 63
Building use rights 131 29 160
181 42 223
P
=596 P
= (P
= 42) P
=554
December 31, Additions December 31,

2014 (see Note 4) Amortizations 2015
(In Millions)
Cost
Land use rights P
=208 P
=29 =
P P
=237
Building use rights 540 540
748 29 777
Accumulated Amortization
Land use rights 38 12 50
Building use rights 102 29 131
140 41 181
P
=608 P
=29 (P
=41) P
=596
Certain subsidiaries entered into lease agreements for the operation and management of hospitals
(see Note 33). The lease agreements qualified as business combinations where the identifiable
assets consist of property use rights for the use of existing land and building over the term of the
lease.
15. Other Noncurrent Assets

2016 2015
(In Millions)
Intangible assets arising from business combinations
(see Note 4) P
=1,171 P
=
Deferred project costs (see Note 13) (a) 858 873
Deferred FCDA charges (b) 764 279
Deferred tax assets (see Note 29) 467 1,242
Deferred financing costs (see Note 19) 441
Long-term cash and miscellaneous deposits (c) 377 694
Advances to ABHC (see Note 11) 360
Advances to contractors and consultants (see Note 9) 300 174
Deferred input VAT (d) 256
Sinking fund (e) 155 157
Basketball franchise (f) 100 100
Deferred LRT-1 charges (g) 93 47
Deposits for LTIP (see Note 25) 46
Pension asset (see Note 25) 34 46
Others (h) 289 288
P
=5,711 =3,900
P
*SGVFS021831*
- 51 -
a. Deferred projects costs comprise of costs directly attributable to the acquisition of a service
concession prior to the commencement of the concession term. Costs are transferred to
service concession asset upon effective date of the concession agreement.
b. Foreign currency differential adjustment (FCDA) is a tariff mechanism granted to Maynilad to

allow it to recover losses or give back gains arising from the fluctuating movements of the
peso against other currencies. In view of the automatic reimbursement mechanism, Maynilad
recognizes deferred FCDA (included as part of Deferred charges or Deferred credits
accounts in the statements of financial position) with a corresponding credit (debit) to FCDA
revenues for the unrealized foreign exchange losses (foreign exchange gains) which have not
been billed or which will be refunded to the customers. Deferred FCDA and deferred credits
are calculated as the difference between the drawdown or rebased rate versus the closing rate.
As at December 31, 2016 and 2015, the FCDA balance is an asset recognized as deferred
FCDA charges.
c. As at December 31, 2016, this account is presented at its net recoverable amount. Provision
for decline in recoverable amount is recognized in Construction cost and other expenses
account (see Note 27).
d. As at December 31, 2016, this account included input VAT amounting to P

=232.3 million
attributable to MMIs acquisition of logistics assets (see Note 4).
e. This pertains to CICs sinking fund established to finance the future major road repairs,
re-pavements and other extraordinary costs and expenses of the R-1 Expressway.
f. Basketball franchise represents cost of MPTCs Philippine Basketball Association (PBA)

franchise named NLEX Road Warriors. The PBA franchise is an intangible asset with an
indefinite life, and thus, subject to annual impairment review. As at December 31, 2016 and
2015, no impairment has been recognized.
g. This account represents the cost incurred by LRMC to restore the LRT-1 System to the level
necessary to meet the baseline ESR as stated in the Concession Agreement. LRMC plans to
recover these costs through the balancing payments mechanism (see Note 32).
h. Others included software, licenses and trademark costs and have estimated useful lives ranging
from three (3) to five (5) years.
16. Accounts Payable and Other Current Liabilities
2016 2015
(In Millions)
(a)
Trade and accounts payable P
=4,583 =4,678
P
Accrued construction costs (b) 4,279 3,125
Accrued personnel costs 1,234 1,114
Accrued expenses (c) 934 1,295
Accrued outside services and professional fees 924 848
Interest and other financing charges (see Note 19) 876 743
(Forward)
*SGVFS021831*
- 52 -
2016 2015
(In Millions)
(d)
Retention payable P
=457 =272
P
Output taxes payable 476 411
Withholding taxes payable 348 250
Accrued PNCC and BCDA fees (see Note 1) 140 48
Lease payable - current portion (see Note 20) 131 66
Unearned revenue and other deposits 116 99
Dividends payable (see Note 6) 11 424
LTIP payable (see Note 25) 1,044
Others 456 340
P
=14,965 =14,757
P
a. This account includes unpaid billings of creditors, suppliers and contractors. It also includes
liabilities relating to assets held in trust used in Maynilads operations amounting to
P
=97.3 million as at December 31, 2016 and 2015 (see Note 34). Trade and accounts payables
are non-interest bearing and are normally settled on 30 to 60 day terms.
As at December 31, 2016 and 2015, trade payable included payable to ESC arising from the
reloading of the Easytrip tags in the NLEX (see Note 21).
b. This represents unbilled construction costs from contractors and normally settled upon receipt
of billings.
c. This account includes accrued professional fees, utilities and repairs and maintenance charges.
d. Retention payable is the amount withheld (equal to 10% of the contract price) by the Company
until the completion of the construction of a specific project.
17. Provisions
The table below present the movements in this account:
Warranties
and Guarantees (a) Heavy Other
(see Note 32) Maintenance (b) Provisions (c) Total
(In Millions)
Balance at December 31, 2014 P
=489 P
=272 P
=5,012 P
=5,773
Additions* and accretion 181 400 581
Reversal (34) (34)
Payments (99) (483) (582)
Balance at December 31, 2015 489 354 4,895 5,738
Additions* and accretion 171 342 513
Reversal (489) (100) (589)
Payments (92) (102) (194)
Balance at December 31, 2016 P
= P
=433 P
=5,035 P
=5,468
*SGVFS021831*
- 53 -
Warranties
and Guarantees (a) Heavy Other
(see Note 32) Maintenance (b) Provisions (c) Total
(In Millions)
At December 31, 2015:

Current portion P
=489 P
=105 P
=4,881 P
=5,475
Noncurrent portion 249 13 263
At December 31, 2016:
Current portion 229 5,000 5,229
Noncurrent portion 204 35 239
* See Note 23.
a. This includes certain warranties and guarantees extended by NOHI in relation to debt for asset
swap arrangements entered in prior years. In August 2016, NOHI received release from the
guarantee undertaking prompting reversal of the provision (see Note 32).
b. This pertains to the contractual obligations of NLEX Corp and CIC to restore the service
concession assets to a specified level of serviceability during the service concession term and
to maintain the same assets in good condition prior to turnover of the assets to the Philippine
Government.
c. These consist of estimated liabilities for losses on claims by third parties. The information
usually required by PAS 37 is not disclosed as it may prejudice the Companys negotiation
with third parties.
18. Service Concession Fees Payable

2016
Toll
Water Operations Rail Total
(In Millions)
Balance at beginning of year =7,571

P =15,355
P =2,827
P =25,753
P
Additions 2,319 2,319
Foreign exchange differential 466 466
Interest accretion capitalized (see Note 13) 877 178 1,055
Interest accretion (see Note 26) 490 490
Payment (1,209) (1,209)
7,318 18,551 3,005 28,874
Less current portion 874 874
=6,444
P =18,551
P =3,005
P =28,000
P
*SGVFS021831*
- 54 -
2015
Toll
Water Operations Rail Total
(In Millions)
Balance at beginning of year =7,771

P =
P =
P P7,771
=
Additions 14,955 2,781 17,736
Foreign exchange differential 320 320
Interest accretion capitalized (see Note 13) 400 46 446
Interest accretion (Note 26) 574 574
Payment (1,094) (1,094)
7,571 15,355 2,827 25,753
Less current portion 565 565
=7,006
P =15,355
P =2,827
P =25,188
P
Water. Concession fees relating to Maynilads service concession agreement (see Note 1) are
denominated in various currencies. These are payable monthly following an amortization table up
to the end of the concession period and are non-interest bearing. Concession fee payments relating
to the extension of the concession agreement (see Note 1) are only determinable upon loan
drawdown of MWSS and their actual construction of the related concession projects. Accretion
expense are presented as Interest expense in the consolidated statements of comprehensive
income (see Note 26). The schedule of undiscounted estimated future concession fee payments,
based on the term of the Concession Agreement, is as follows:
In Original Currency
Foreign Peso Loans/
Currency Loans Project Local Total Peso
Year (Translated to US$)* Support Equivalent*
(In Millions)
2017 $14.3 P
=561.9 P
=1,270.7
2018 14.2 543.1 1,250.8
2019 14.2 543.1 1,251.5
2020 13.8 543.2 1,228.2
2021-2037 45.1 9,219.2 11,459.7
$ 101.6 P
=11,410.5 P
=16,460.9
*Translated using the December 31, 2016 exchange rate of =
P 49.72: US$1.
Toll Operations. Concession fees relate to the CALAX and the Connector Project:
CALAX. In consideration for granting the concession, MPCALA shall pay DPWH a concession
fee totaling P
=27.3 billion, 20% or P=5.5 billion of which was settled upon signing of the
concession agreement (July 10, 2015). The balance of the concession fee (nominal amount of
P
=21.8 billion) is payable beginning on the 5th year (2020) over a period of 9 years from the
signing of the concession agreement. Service concession fee payable was initially recognized at
its present value as at signing date of the concession agreement. For failure to pay the concession
fee on or before the agreed upon dates, MPCALA shall pay interest at the rate of one year
Philippine Dealing System Treasury Reference Rate PM (PDST-R2) plus 1.75%. The interest at
such rate shall continue to accrue until the remaining concession fee is paid, or until a notice of
default and termination is received by MPCALA. Interest accretion is capitalized as part of the
service concession asset account during the construction period (see Note 13).
*SGVFS021831*
- 55 -
Connector Project. Under the concession agreement, NLEX Corp shall pay periodic payments to
DPWH representing the consideration for granting the concession and basic right of way in the
Connector Road Project. Total payments to be made to DPWH amount to P =8.5 billion payable at
P
=243.2 million per annum. The payment shall commence on the first anniversary of the
construction completion deadline, as extended, until the expiry of the concession period and shall
be subject to an agreed escalation every two years based on the prevailing CPI for the two-year
period immediately preceding the adjustment or escalation. The addition to service concession
fees payable for the year ended December 31, 2016 comprises of recognition of the present value
of these annual payments amounting to = P2.3 billion. Interest accretion is capitalized as part of the
Service concession asset account during the construction period (see Note 13).
Rail. Under LRMCs concession agreement for the LRT-1 Project, LRMC is required to pay the
bid premium of P =9.35 billion (inclusive of VAT) as concession fee. A total of =
P1.9 billion (or
20% of the bid premium) was settled before Effective Date (September 12, 2015) in accordance
with the concession agreement. The balance of the concession fee (nominal amount of
P
=7.5 billion, inclusive of VAT) is payable in equal quarterly installments over the concession
period with the first payment on the fifth anniversary of the Effective Date. Settlement of the
concession fee is through the quarterly balancing payment mechanism reflecting netting of
payments due to Grantors against receivable from Grantors. Interest accretion is capitalized as
part of the Service concession assets during the rehabilitation and/or construction period
(see Note 13).
19. Long-term Debt

2016 2015
(In Millions)
Current portions P
=3,797 P4,149
=
Noncurrent portions 93,219 83,433
P
=97,016 =87,582
P
Details of the long-term debt per company/segment as follows:

December 31, 2016
Long-term
Loans Bonds Total
(In Millions)
MPIC P
=36,878 P
= P
=36,878
Water 26,792 26,792
Toll Operations 25,586 6,957 32,543
Rail 657 657
Healthcare 588 588
90,501 6,957 97,458
Less unamortized debt issue cost 389 53 442
P
=90,112 P
=6,904 P
=97,016
*SGVFS021831*
- 56 -
December 31, 2015

Long-term
Loans Bonds Total
(In Millions)
MPIC P
=29,793 =
P P
=29,793
Water 25,193 25,193
Toll Operations 25,183 6,957 32,140
Hospital 905 905
81,074 6,957 88,031
Less unamortized debt issue cost 387 62 449
P
=80,687 P
=6,895 P
=87,582
The table below presents the movements in unamortized debt issue costs:
2016 2015
(In Millions)
=449 =327
P
Amortization during the year charged to interest
expense (see Note 26) (61) (50)
Debt issue costs incurred during the year 66 178
Amortization during the year capitalized to service
concession assets (see Note 13) (12) (6)
=442 =449
P
The repayments of loans based on existing terms are scheduled as follows:
2016 2015
(In Millions (In Millions
and undiscounted) and undiscounted)
2017 =3,813 2016
P P4,147
=
2018 7,966 2017 3,335
2019 and onwards 85,843 2018 and onwards 80,360
P
=97,622 =87,842
P
The credit agreements provides for certain restrictions with respect to, among others, availing
other loans or advances to any of the Companys affiliates, subsidiaries, stockholders, directors
and officers except in compliance with formally established and existing fringe benefit program of
the Company. These restrictions were complied with by the Company.
Certain loan facilitity were identified to have embedded derivatives such as prepayment option
and interest rate floor. These embedded derivatives, however, are not required to be bifurcated
from the host loan since: (1) the exercise price of the prepayment option approximates the carrying
amount of the loan at each exercise date; and (2) interest rate floor is out of the money, hence,
identified embedded derivatives are clearly and closely related to the host loan.
As at December 31, 2016, MPIC and its subsidiaries are in compliance with their respective debt
covenants.
*SGVFS021831*
- 57 -
MPIC
Loans consists of:
Interest Rate
(In Millions)
=
P6.48 Billion Fixed Rate Note with BDO 7.5% p.a. for the first Availed of in 2013; payable in 10 P
= 6,253 P
=6,318
(the Note) 5 years, subject to years with semiannual interest
repricing on 5th year payment; contains negative
pledge
=
P25.0 Billion Facility
=
P10.0 Billion Facility from Bank of the Fixed interest ranging Drawn on various dates in 2015 9,850 9,250
Philippine Islands (BPI) from 5.2427% to with final drawdown made in
5.8850% p.a. 2016; principal payable semi
annually within ten years from
and after initial drawdown date;
contains negative pledge
=
P10.0 Billion Facility from Philippine Fixed interest for the Drawn on various dates in 2015 9,850 9,250
National Bank (PNB) first 5 years subject to with final drawdown made in
repricing on 5th year; 2016; principal payable within
fixed interest ranging 10 years from and after initial
from 4.9253% to drawdown date; contains
5.7947% p.a. negative pledge
=
P5.0 Billion Facility from BDO 5.3906% p.a. for the first Drawn in 2015; principal payable 4,925 4,975
Unibank, Inc. 5 years subject to semiannually within 10 years
repricing on the 5th from and after initial drawdown
year date; contains negative pledge
=
P16.5 Billion Facility
=
P10.0 Billion Facility from BDO Fixed interest at 5.00% Drawn in 2016; principal payable 6,000
Unibank, Inc. p.a. semiannually within 10 years
from and after initial drawdown
date; contains negative pledge
36,878 29,793
Less unamortized debt issue costs 139 115
Long-term debt 36,739 29,678
Less current portion of long-term debt 357 382
Noncurrent portion of long-term debt P
= 36,382 P
=29,296
On April 14, 2015, MPIC entered into separate agreements to secure loan facilities in the
aggregate amount of P =25.0 billion (P
=25.0 Billion Facility), proceeds of which were used to
partially finance the acquisition of 10% of the total issued and outstanding common shares of
MERALCO held by Beacon Electric (see Note 11), investment in other projects and for other
general corporate purposes. As at December 31, 2016, the facility has been fully drawn.
On December 1, 2015, MPIC entered into separate agreements to secure loan facilities in the
aggregate amount of P =16.5 billion (P
=16.5 Billion Facility). MPIC drew = P6.0 billion from this
facility in 2016, proceeds of which were used by MPIC to finance its investment in various
projects and other general corporate purposes. As at December 31, 2016, the undrawn amount
from this facility, amounting to P
=10.5 billion, is available until June 30, 2017.
Covenants. These loans contain, among others, covenants regarding maintenance of reserve
account and achieving certain financial ratios such as (1) debt-to-equity ratio not to exceed 70:30;
and (2) debt-service coverage ratio (DSCR) at a minimum of 1.3x (for the Note) and 1.1x (for the
=
P 25.0 Billion Facility and =
P 16.5 Billion Facility). These loans contain a negative pledge on all
existing and future assets of MPIC. The Notes is redeemable at the option of the Noteholder, in
whole but not in part, on the 5th year, by giving written notice of early redemption no earlier than
60 days nor later than 30 days prior to the exercise date.
*SGVFS021831*
- 58 -
Water
Long-term debt consists of:
Interest Rate
(In Millions)
Maynilad
=
P21.2 Billion Term Loan Facility from 5.75% p.a. for the first 5 Availed of in March 2013, payable P
= 15,229 P
=16,921
various banks years, subject to in semiannual installment
repricing on 5th year within 10 years with final
repayment in March 2023;
contains negative pledge
=
P5.0 Billion Loan with BDO 5.75% p.a. for the first 5 Availed of in April 2013, payable 4,950 5,000
years, subject to in semiannual installments
repricing on 5th year within 10 years; contains
negative pledge
=
P5.2 Billion Loan with Development Bank 6.0% p.a. Principal amount payable semi 3,000 1,000
of the Philippines (DBP) annually within twenty years
with the first repayment date
scheduled in 2020; contains
negative pledge
US$137.50 Million loan with Land Bank Same rate of interest Interest and principal payable in 3,358 2,017
of the Philippines (LBP) payable by LBP under semiannual installments within
the World Bank Loan 25 years, inclusive of seven
Agreement + 1.25% years grace period; contains
per annum negative pledge
PHI
=
P255.0 Million Loan with LBP 5.5% p.a. for the first 5 Availed of in June 2015; payable
years, subject to quarterly in eight equal 255 255
repricing on 5th year installments beginning on the
eight quarter; contains negative
pledge
26,792 25,193
Less current portion of long-term debt 1,808 1,742
= 24,880 P
=23,337
The World Bank, through the Metro Manila Wastewater Management Project (MWMP), provided
a US$275.0 million loan to the Land Bank of the Philippines (LBP) for relending to Maynilad and
the concessionaire for the east service area, Manila Water Company, Inc. The loan was divided
equally between these two concessionaires. The MWMP is intended to finance investments in
wastewater collection and treatment, and septage management in Metro Manila. As at
December 31, 2016, the undrawn amount from this facility amounting to US$70.0 million out of
Maynilads share of US$137.5 million from the facility is available until June 30, 2017. On
November 29, 2016, Maynilad requested to extend the availability of the undrawn amount until
June 30, 2019. As at March 1, 2017, Maynilad is awaiting approval of the extension of the
availability of this facility.
In 2014, Maynilad entered into a loan agreement with DBP originally amounting to P =6.0 billion
to partially finance the construction of ParanaqueLas Pinas sewerage system. The loan was
subsequently reduced to P =5.2 billion (P
=5.2 Billion Peso DBP Loan). The loan is scheduled for
three drawdowns with the first drawdown amounting to P =1.0 billion and second drawdown
amounting to P =2.0 billion made on March 2, 2015 and October 4, 2016, respectively. In 2017, the
schedule of borrowing under this loan agreement has been amended as follows: (i) the third
borrowing date was rescheduled (August 1, 2017), (ii) a fourth borrowing date was added in the
schedule of borrowing (March 5, 2018), and (iii) the total borrowing was reduced to = P4.8 billion.
*SGVFS021831*
- 59 -
Covenants. The loan agreements contain among others, covenants regarding the maintenance of
certain financial ratios such as debt-to-equity ratio, debt service coverage ratio at a minimum of
and maintenance of debt service reserve account (see Note 35, Capital Management).
Toll operations
Loans consist of:
Interest Rate
(In Millions)
MPTC
=
P2.1 Billion Term Loan Facility with BDO 5.2507% p.a. for the first Availed of in 2015; principal P
= 2,100 P
=2,100
(secured) 5 years, subject to payable semiannually within
repricing on 5th year 10 years with the first
repayment date in 2017
MPTDC
Term Loan Facility Agreement with BDO 5.8% p.a. for the first P
=3.25 billion drawn on various 3,071 3,153
(secured) 5 years, subject to dates in 2014; principal and
repricing on 5th year interest payable semiannually
within 10 years based on the
amortization schedule
NLEX Corp:
=
P7.0 Billion Fixedrate Bonds due 2021 5.5% and 5.07% for the Bond issued in 2014 with 7year 6,957 6,957
and 2024 10year and 7year fixed rate bonds amounting to
bonds, respectively P
=4.4 billion due in 2021 and
10year fixed rate bonds
amounting to P=2.6 billion due in
2024; contains negative pledge
=
P6.2 Billion Series A Notes (unsecured) Weighted average fixed Availed of in April 2011 and have 4,950 5,962
interest rate of tenors of 5 years, 7 years and
7.22% p.a. 10 years, subject to bullet like
repayment
=
P5.0 Billion Term Loan Facility with PNB 5.0% p.a. for the first First drawdown of P =3.0 billion 3,000 3,000
(unsecured) 5 years, subject to made in 2015; principal payable
repricing on 5th year within 10 years at rate of 5% of
the principal; maturity of loan is
December 2025
=
P1.0 Billion Term Loan Facility with Fixed interest rate of Availed of in December 2013, 1,000 1,000
Philippine American Life and General 5.80% p.a. payable in lump sum after
Insurance Company (unsecured) 15 years
=
P800.0 Million Term Loan Facility Fixed interest rate of Availed of in October 2013, 800 800
with Sun Life of Canada 5.30% p.a. payable in lump sum after
(Philippines), Inc. (unsecured) 10 years
=
P200.0 Million Term Loan Facility Fixed interest rate of Availed of in November 2013, 200 200
with The Insular Life Assurance Co., 5.03% p.a. payable in lump sum after
Ltd. (unsecured) 10 years
=
P5.0 Billion Term Loan Facility with Fixed interest rate of Drawn on various dates in 2016; 2,000
Unionbank of the Philippines 5.4855% p.a. on the payable within 10 years;
drawn amout quarterly interest payment until
maturity date of February 2026
(Forward)
*SGVFS021831*
- 60 -
Interest Rate
(In Millions)
CIC and subsidiaries
Series 20101 Dollardenominated Notes Fixed rate of 12.0% Principal payments payable P
= 658 P
=737
(secured) quarterly, commencing
March 2013 with final payment
in September 2022
=
P6.1 Billion Loan with BDORizal 6.50% subject to Availed of in 2013, payable 5,680 5,838
Commercial Banking Corporation repricing on the fifth quarterly within 10 years
(secured) year starting January 13, 2014 to
December 26, 2023
AIF
Baht 2.1 Billion Loan Term Loan with Floating interest rate of Drawn in 2014; semi-annual 2,127 2,393
Thanachart Bank Public Company Minimum Lending principal payments with final
Limited Rate minus 1.5% p.a. payment due November 2021
32,543 32,140
Less current portion of long-term debt 1,047 1,528
= 31,310 P
=30,391
On January 29, 2016, NLEX Corp entered into a new ten-year term loan facility agreement with
Unionbank of the Philippines for a facility amount of P=5.0 billion (P
=5.0 Billion Term Loan Facility
with Unionbank of the Philippines) to finance capital expenditure such as Segment 10 and the
Connector Road. The undrawn amount from this facilityof P =3.0 billion as at December 31, 2016 is
available until July 24, 2017 or such longer period as the parties may agree upon in writing.
On December 4, 2015, NLEX Corp entered into a new tenyear term loan facility agreement for a
facility amount of =
P5.0 billion with PNB (P
=5.0 Billion Term Loan Facility with PNB) to finance
capital expenditure projects such as the NLEX Lane Widening Project, NLEXSCTEX Integration
Project and the upgrade of the SCTEX. On December 10, 2015, NLEX Corp made its first
drawdown amounting to P =3.0 billion. The undrawn amount is available for drawing until
December 4, 2017. The maturity date of the loan is on December 10, 2025.
Covenants. The bonds and the loans contain, among others, covenants regarding the maintenance
of certain financial ratios and maintenance of reserve account (see Note 35, Capital Management).
CIC provided collateral security in connection with the P =6.1 Billion loan with BDORCBC, which
included a mortgage on certain debt instruments, equity investments of CIC, voting shares in the
structured entity owned by the third party stockholders amounting to P =0.2 million and assignment
of revenue and debt service account. The agreement covering this loan generally provides, among
others, that for as long as the loans remain outstanding, CIC is subject to certain negative
covenants requiring prior approval of the creditors for specified corporate acts.
Under the Baht 2.1 Billion Loan Term Loan, all dividend proceeds in respect of the investment in
DMT shall be applied to repay this loan (see Note 11). This loan is subject to maintenance of
ownership in DMT of at least 29.45%. This loan is secured by a standby letter of credit issued by
MPIC with a face amount of US$45 million and a pledge over all the AIF Toll Road Holdings
(Thailand) Co., Ltd (AIF; the intermediate holding company for the Companys investment in
DMT) shares and substantially all of the DMT shares owned by AIF. See Note 11 for the carrying
value of the investment in DMT.
*SGVFS021831*
- 61 -
Rail
On February 11, 2016, LRMC entered into a = P24.0 billion 15-year Omnibus Loan and Security
Agreement (OLSA) with various financial institutions. Amount allocated for the Cavite Extension
and rehabilitation of the existing Light Rail Transit 1 (LRT-1) system amounted to P =15.3 billion
and =P8.7 billion, respectively. Cumulative drawn amount from this facility as at
December 31, 2016 amounted to P =657.0 million. The drawn amount has a fixed interest rate of
7.1445% for the first five (5) years and is subject to interest repricing every five (5) years
thereafter. Payment of principal balance on a quarterly basis will commence in September 2020,
subject to change depending on the actual date of completion of the LRT-1 Cavite Extension.
LRMC incurred P =452.9 million debt issue cost of which P=440.6 million was deferred to
noncurrent asset as Deferred financing cost (see Note 15). The deferred financing cost is
released to long-term debt in proportion to every future loan drawdowns that will be made.
Covenants. This loan is secured by a pledge on LRMC shares amounting to P =4,050.0 million and
a chattel mortgage that includes all present and movable assets that exist and are owned by LRMC
and all proceeds of any disposition of chattels. This loan also contains restrictive covenants which
include, among others, maintenance of certain level of long-term debt-to-equity ratio not
exceeding 65:35 and a minimum debt service coverage ratio of 1.05x based on the financial
statements of LRMC.
The loan has a sponsors funding commitment wherein for each drawdown until end of the
construction period, the sponsors/shareholders shall infuse additional equity or extend debt to
LRMC in an amount necessary to meet the debt-to-equity ratio. Additional equity investment of
the sponsors shall not exceed P
=15,346.0 million, of which =P8,440.0 million is effectively allocated
to MPLRC. As at December 31, 2016, no additional equity nor debt from the sponsors was
required.
Healthcare
Loans consist of:
Description Interest Rate Terms 2016 2015

(In Millions)
AHI
=
P1.26 Billion Loan with International 8.5% p.a. on first Availed of on February 8, 2008 P
= 178 P
=360
Finance Corporation (IFC) (secured) drawdown; 8.1% p.a. and payable in 16 unequal
on second drawdown semiannual principal beginning
May 15, 2010
=
P595.0 Million Loan with Deutsche 9.1% p.a. on first Availed of on February 8, 2008 84 170
Investitionsund drawdown; 8.6% p.a. and payable in 16 unequal
Entwicklungsgeselleschaft mbH (DEG) on second drawdown semiannual principal beginning
(secured) March 15, 2010
US$1.0 Million IFC Subordinated Loan LIBOR plus Income Availed of on February 8, 2005 50 47
(secured) participation amount and payable on April 30, 2017
from 1% to 2% of
EBITDA
Other Hospitals 276 329
588 905
Less current portion of longterm debt 585 497
Noncurrent portion of longterm debt P
=3 P
=409
Hospitals various other loans substantially comprises of short-term fixed rate loans.
*SGVFS021831*
- 62 -
AHIs property and equipment, with a carrying value of P

=3,448.6 million and = P3,564.8 million as
at December 31, 2016 and 2015, respectively, are pledged as collaterals for its longterm loan
(see Note 14). All of AHIs loans are due in 2017.
Covenants. The agreements covering the loans generally provide, among others, that for as long
as the loans remain outstanding, AHI is subject to certain negative covenants and maintenance of
certain financial ratios. While the =P 1.26 billion loan with IFC and =P 595.0 million loan with DEG
are outstanding, AHI is prohibited, among others, from declaring dividends or making cash
distributions on its share capital unless payment is out of its retained earnings subject to
maintenance of certain financial ratios and notification made to the lenders. As at
December 31, 2016 and 2015, AHIs current ratio is below the minimum and is therefore
prohibited from declaring dividends. However, after obtaining the approval from the lenders, AHI
was able to declare dividends in 2016 and 2015.
20. Other Longterm Liabilities

2016 2015
(In Millions)
Lease payable (see Notes 3, 16 and 33) (a) P
=1,025 =1,052
P
Customers guaranty deposits (b) 938 857
LTIP payable (see Note 25) 703 140
Accrued interest payable to MWSS (c) 607 607
Accrued retirement liability (see Note 25) 517 567
Interest payable (d) 134 150
Contingent liabilities arising from business
combinations (e) 232
Others 444 391
P
=4,368 =3,996
P
a. Lease payable included present value of future minimum lease payments relating to the lease
agreements entered into by certain subsidiaries, which qualify as business combinations (see
Note 33). The lease payable was initially determined at acquisition date and subsequently
adjusted for payments and accretion. Current portion of the lease payable is included in the
Accounts payable and other current liabilities (see Note 16).
b. Customers guaranty deposits serve to guarantee payment of bills by customers. These
deposits are noninterest bearing and normally refunded upon termination of water service
connection and are initially measured at fair value. After initial recognition, these deposits are
subsequently measured at amortized cost using the effective interest rate method. The
discount is amortized over the remaining concession period using the effective interest rate
method (see Note 26).
c. In connection with Maynilads disputes with MWSS over certain charges billed by MWSS
relating to (a) the basis of the computation of interest; (b) MWSS cost of borrowings; and
(c) additional penalties, and as further discussed in Note 32, Maynilad has accrued interest on
its payable to MWSS accumulating to = P985.3 million as at December 31, 2011, which was
disputed by Maynilad before the Rehabilitation Court. In 2012, in line with Maynilads
negotiations and outstanding offer of US$14 million to fully settle the claim of MWSS,
Maynilad reduced the accrued interest payable to MWSS to = P607.2 million as at
December 31, 2012.
*SGVFS021831*
- 63 -
d. Interest payable represents present value of the interest due on the Exchangeable Bond
(see Note 22).
e. Contingent liability arising from probable claim from a third party at fair value of
P
=1,100.1 million was recognized in January 2013 in relation to the acquisition of CIC which
was accounted for under PFRS 3, Business Combination. As at December 31, 2016, the
related liability has expired and/or has been settled such that the balance is nil.
21. Related Party Transactions
Transactions with related parties are disclosed below. See tabular presentation for the recorded
transactions with these related parties.
Transactions with TMC. As disclosed in Note 11, TMC is responsible for the operation &
maintenance (O&M) of the NLEX, Segment 7 and SCTEX.
TMC oversees the day-to-day operations of the NLEX and SCTEX, including securing toll
collection, depositing of funds to NLEX Corps accounts, facilitating smooth and uninterrupted
flow of traffic, carrying out of routine maintenance, ensuring effective and safe responses to
emergency situations.
In exchange for performing its duties for the O&M of the NLEX and Segment 7, TMC receives a
fixed O&M fee subject to CPI escalation as provided for under the agreement and a variable fee
(for certain portions of the NLEX and Segment 7). The O&M also provides for certain bonuses
and penalties as described in the agreement.
For the SCTEX, O&M fee is based on a cost plus margin, which compensation shall not exceed
=
P26.3 million per month (inclusive of VAT). TMC commenced operations of the SCTEX on
October 27, 2015.
MPTC and MPTDC perform management, operational and financial advisory services for TMC.
MPTC and MPTDC are in the process of formalizing their management agreements with TMC as
at March 1, 2017.
Transaction with Landco. Refer to Note 11.
Transactions with PLDT, SMART and Digitel. The Companys primary telecommunications
carriers are PLDT (an associate of FPC) for its wireline and SMART (PLDTs subsidiary) for its
wireless services. The Company also has transactions with Digitel Mobile Philippines, Inc.,
(Digitel) which became a subsidiary of PLDT in 2011. Such services are covered by standard
service contracts between the telecommunications carriers and each entity within the Company.
Other than these service contracts, the Company also has the following transactions with these
telecommunication carriers:
Utilities Facilities Contract between NLEX Corp and PLDT for the Fiber Optic Overlay along
Phase I of the NLEX. PLDT pays an annual fee presented as Others under Contruction
revenue and other income. Pursuant to the agreement, PLDT shall pay NLEX Corp fixed
annual fee which shall then be escalated annually by a percentage indicated in the agreement.
The contract shall be effective for a period of 20 years from April 15, 2010 and may be
renewed or extended upon mutual agreement by NLEX Corp and PLDT.
*SGVFS021831*
- 64 -
Utilities Facilities Contract, between NLEX Corp and SMART whereby NLEX Corp
provides SMART an access for the construction, operation and maintenance of a cellsite
inside the NLEX right of way for a fixed annual fee which shall then be escalated annually
starting on the fourth year of the contract and every year thereafter. The contract is effective
for a period of five years from April 26, 2010. In September 2016, the contract was renewed
with effective date of April 27, 2015 for a period of five (5) years which may be renewed or
extended upon mutual agreement by NLEX Corp and SMART.
Agreement for the naming rights of the SMART Connect Interchange, whereby NLEX Corp
grants SMART the exclusive rights to name the NLEXMindanao Avenue Cloverleaf as a
SMART Connect Interchange and put up outdoor advertising structures near the interchange.
The annual package is based on a predetermined timetable of when the official road signs are
progressively built. The base price is from =
P175.0 million to =P228.2 million and may increase
depending on the final features and characteristics of the cloverleaf. The agreement is
effective from April 1, 2012 to April 30, 2017, unless pre-terminated or renewed by mutual
written agreement of the parties.
Advertising arrangements between NLEX Corp and Digitel related to various advertising
mediums which include rental, material production, installation and maintenance at several
locations along NLEX. This advertising arrangement with Digitel ended in 2015.
Transactions with DM Consunji Inc. Maynilad, entered into certain construction contracts with
D.M. Consunji, Inc. (Consunji), a subsidiary company of DMCI (a noncontrolling shareholder in
MWHC), in relation to the provision of engineering, procurement and construction services to
Maynilad.
Transactions with MERALCO. MERALCO, sells electricity to the Company for the Companys
facilities within MERALCOs franchise area. The rates charged by MERALCO are the same
mandated rates by the ERC applicable to customers within the franchise area.
Colinas Healthcare, Inc. (CHI) (a wholly-owned subsidiary of CVHMC) operates and manages the
MERALCO Corporate Wellness Center (Wellness Center), an outpatient diagnostic and
consultation center for its employees and their dependents. Income, comprising of retainers fee,
pharmacy handling and manpower and administrative reimbursement plus margin, that was
recognized for this arrangement in 2016, 2015 and 2014 amounted to P =46.3 million, =
P44.4 million
and =
P42.9 million, respectively, and is included as part of Hospital and school revenue in the
consolidated statements of comprehensive income.
Transactions with Beacon Electric. Refer to Note 11 for other related party transactions with
respect to MPICs investment in Beacon Electric. Due to Beacon Electric as at
December 31, 2015 pertains to the outstanding amount for the purchase price of MERALCO
shares acquired in April 2015.
In April 2015, MPIC entered into a Share Purchase Agreement dated April 14, 2015 for the sale of
Beacon Electrics 112.7 million MERALCO shares (or 10% of MERALCOs outstanding
common shares) to MPIC at a price of P =235.0 per share, for a total consideration of P=26.5 billion
plus certain recoverable costs. MPIC paid = P18.0 billion of the total consideration in 2015 while
the balance of =
P8.5 billion is due on or before July 2016. MPIC received dividend of P =4.24 billion
from Beacon Electric at the same time it settled the July 2016 payment such that MPICs net
investment is at =
P22.2 billion. This transaction resulted to an increase in MPICs direct interest in
MERALCO from 5% as at December 31, 2014 to 15% beginning April 2015. The liability to
Beacon Electric was fully settled on July 29, 2016.
*SGVFS021831*
- 65 -
Transactions with PCEV. Due to PCEV as at December 31, 2016 pertains to the outstanding
amount for the purchase price of Beacon Electric shares acquired in May 2016 (see Note 11).
Transactions with ESC. NLEX Corp engaged the services of ESC to assist NLEX Corp in
increasing the usage of the electronic toll collection (ETC) facility along the NLEX. The service
agreement is effective up to May 2018 with a five-year extension. In accordance with the
agreement, NLEX Corp shall pay ESC an annual fixed fee, which are to be maintained and
escalated every year for labor index and CPI. NLEX Corp shall also pay a certain fee (depending
on the class of vehicle) per transaction, with such fee maintained and escalated every year for
labor index and CPI.
Pursuant to the Service Agreement, amounts due to NLEX Corp arising from the use of Easytrip
tags in the NLEX shall be remitted by ESC to the designated NLEX Corp bank accounts within
seven (7) days immediately following the date when any vehicle using the Easytrip tags pass
through the electronic payment lane of the NLEX. Any amount due to ESC arising from the
reloading of the Easytrip tags in the NLEX shall be remitted by NLEX Corp to the designated
ESC bank accounts within seven (7) days immediately following the date of reloading.
Transactions with Indra Phils. Indra Phils renders services to MERALCO and MPICs
subsidiaries such as NLEX Corp and Maynilad for the implementation of information systems and
the conduct of business process analysis and other ITrelated services.
Transactions with AFPI. As discussed in Note 11, AFPI was granted the rights and obligations to
design, finance, construct, operate and maintain the AFCS Project for LRT-1, LRT 2, and MRT 3.
LRMC as the concessionaire for the LRT-1 Project uses the AFCS at no consideration. The
balance payable to AFPI represents amount payable by LRMC for the purchase of stored value
cards and settlement arising from the the rail revenue operations.
Other transactions with related parties. Metro Pacific Investments Foundation, Inc. (MPIFI),
Ideaspace Foundation, Inc. (Ideaspace; Philippines largest privatelyfunded idea incubator
supported by FPC), Lucena Land Corporation (LLC; a subsidiary of Landco), FPC and others
mainly relate to advances to finance various projects as well as intercompany charges for share in
certain operating and administrative expenses.
Revenue from water and sewer services. In the ordinary course of business, the Company
provides water services to its affiliates located within the West Zone of the Metropolitan Manila
area at the same approved rates applicable to customers within the concession area.
*SGVFS021831*
- 66 -
The following table provides the total amount of transactions with related parties for the years ended December 31, 2016, 2015 and 2014 (amounts in millions):
Dividend
Income Income Income from
Management from from Preferred shares Construction Operators Outside Utilities Rentals
Hospital Fees Utility Facilities Advertising (see Notes 11 Cost Fee services (see Notes 23 (see Notes 23
Name Revenue (see Note 27) (see Note 27) (see Note 27) and 27) (see Note 27) (see Note 23) (see Note 24) and 24) and 24)
Associates and Joint Venture (see Note 11):
TMC 2016 =
P = 56
P =
P =
P =
P =
P (P
= 2,001) =
P =
P =
P
2015 56 (1,744)
2014 56 (1,711)
Beacon Electric 2016 1,215

2015 405
2014 405
MERALCO 2016 46 (1,037)

2015 44 (979)
2014 41 (1,006)
ESC 2016 1 (78)

2015 (71)
2014 1 (54)
Indra 2016 (248)

2015 (335)
Other related parties:

SMART 2016 43 (41)
2015 64 (33)
2014 58 (33)
PLDT 2016 7 1 (34) (14)

2015 2 (41) (12)
2014 2 (47) (15)
Digitel 2016
2015 8
2014 11
DM Consunji, Inc. 2016 (2,873)

2015 (952)
2014 (583)
Total 2016 = 46
P = 56
P =7
P = 45
P = 1,215
P (P
= 2,873) (P
= 2,001) (P
= 326) (P
= 1,112) (P
= 14)
2015 44 56 2 72 405 (952) (1,744) (406) (1,053) (12)
2014 41 56 2 70 405 (583) (1,711) (54) (1,086) (15)
*SGVFS021831*
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Outstanding balances of transactions with related parties are carried in the consolidated statement
of financial position under the following accounts provided below (amounts in millions). Trade
receivable, accounts payable and due to/from related parties are due and demandable, non-interest
bearing, unsecured and requires cash settlement. Except for receivables from Landco, all
receivables from related parties are not impaired.
Accounts Payable and Other
Trade Receivable Current Liabilities
(see Note 8) Due from related Parties (see Note 16) Due to related Parties
Company 2016 2015 2016 2015 2016 2015 2016 2015
Associates and Joint Venture
TMC =
P =
P P
= 38 P
=110 P
= 395 P
=482 =
P =
P
AFPI 29 9
MERALCO 1 29 40 15
Beacon 8,450
ESC 246 228 91 62
Indra 20 18
Other related parties:

PCEV 8,352
FPC 1 2
LLC 7 7
MPIF 1 1
PLDT 7 2 5 7
Smart 45 30 72 72
Landco 44 44
Others 3 4 15 19
299 289 123 168 551 584 8,439 8,550
Less allowance for impairment 31 31
Total 299 289 92 137 551 584 8,439 8,550
Less current portion 299 289 92 137 551 584 1,713 8,550
=
P =
P =
P =
P =
P =
P P
= 6,726 =
P
Directors Remuneration
Annual remuneration of the directors amounted to P
=2.9 million, =
P2.7 million and =
P3.8 million in
2016, 2015 and 2014, respectively. Directors were also allocated common shares under the
Companys ESOP and RSUP (see Note 31).
Nonexecutive directors are entitled to a per diem allowance of =P50,000 for each attendance in the
Parent Companys BOD meetings and = P30,000 for each attendance in the Companys Committee
meetings. The Parent Companys By-Laws provide that an amount equivalent to 1.0% of net
profit after tax of the Parent Company shall be allocated and distributed among the directors of the
Parent Company who are not officers of the Parent Company or its subsidiaries and affiliates, in
such manner as the BOD may deem proper. No accruals were made with respect to this scheme
for the years ended December 31, 2016, 2015 and 2014 in the absence of resolution from the
BOD. There are no other special arrangements pursuant to which any director will be
compensated.
Compensation of Key Management Personnel
Compensation of key management personnel of the Company is as follows:
2016 2015 2014
(In Millions)
Shortterm employee benefits =1,145
P =922
P =867
P
Sharebased payment (see Note 31) 67 21 64
Post employment benefits - Retirement costs 46 62 54
Other longterm benefits:
LTIP expense (see Note 25) 533 568 440
Others 5
=1,791
P =1,573
P =1,430
P
*SGVFS021831*
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22. Equity
Details of authorized and issued capital stock are in the following tables:
2016 2015
No. of Shares Amount No. of Shares Amount
(In Millions except for number of shares)
Authorized common shares - = P1.00 par value 38,500,000,000 P

=38,500 28,500,000,000 P
=28,500
Authorized preferred shares:
Class A - P
=0.01 par value 20,000,000,000 200 20,000,000,000 200
Class B - P
=1.00 par value 1,350,000,000 1,350 1,350,000,000 1,350
Balance at December 31 59,850,000,000 P
=40,050 49,850,000,000 P
=30,050
Issued and Outstanding - common shares:
Balance at beginning of year 27,885,373,752 = 27,885 26,046,270,752
P P
=26,046
Issuance of shares 3,600,000,000 3,600 1,812,000,000 1,812
Exercise of stock option plan 42,475,000 43 27,103,000 27
Issued - common shares 31,527,848,752 31,528 27,885,373,752 27,885
Less: Treasury Shares (23,970,000) (24)
Balance at end of the period 31,503,878,752 = 31,504 27,885,373,752
P P
=27,885
Treasury shares - common shares:
= =
P
Share buy-back (see Note 25) 23,970,000 167
Balance at end of the period 23,970,000 P
= 167 =
P
Issued - preferred shares - Class A:
Balance at beginning of year 5,000,000,000 P
= 50 5,000,000,000 =
P50
Issuance of shares 4,128,105,319 41
Balance at end of the period 9,128,105,319 P
= 91 5,000,000,000 =
P50
Total number of stockholders 1,313 1,328
Authorized Capital Stock
At the regular meeting of the BOD of MPIC held on May 12, 2015, the BOD approved the
following:
The reclassification of a total of 150 million Class B preferred shares with par value of P
=1.00
per share into 15 billion Class A preferred shares with par value of P
=0.01 per share, thereby
decreasing the number of Class B preferred shares from 1.5 billion to 1.35 billion and
correspondingly increasing the number of Class A preferred shares from 5 billion to 20 billion.
The increase of the authorized capital stock from =
P30.05 billion up to P
=40.05 billion divided
into 38.5 billion common shares with a par value of P=1.00 per share and 20 billion Class A
preferred shares with a par value of =
P0.01 per share and 1.35 billion Class B preferred shares
with a par value of =
P1.00 per share.
During the annual general meeting of the stockholders of MPIC held on May 29, 2015, the
foregoing matters were approved and ratified by the stockholders of MPIC.
The increase in authorized capital stock is for the purpose of enabling MPIC to carry out equity
fund raising in a timely manner for MPICs investments. The purpose of the reclassification is to
broadly maintain the historical ratio of preference shares relative to each class and the common
shares of MPIC following recent capital raising exercises, as well as to reduce the number of
outstanding preferred shares that are convertible to the common shares.
The Amended Articles of Incorporation of MPIC reflecting the reclassification of portion of the
Class B preferred shares to Class A preferred shares was approved by the Philippine SEC on
October 26, 2015.
*SGVFS021831*
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In 2016, MPIC applied for an increase in authorized common shares from 28.5 billion to
38.5 billion shares. The SEC approved the increase in authorized capital stock on August 5, 2016.
Common Shares
The increase in common shares for the years ended 2016, 2015 and 2014 resulted from the
following transactions:
At various dates in 2016, 2015 and 2014, a total of 42.5 million, 27.1 million and 20.3 million
common shares, respectively, were issued in connection with the Parent Company stock
option plan (see Note 31).
On February 9, 2015, MPIC, together with its principal shareholder MPHI, entered into a
placement agreement with UBS AG, Hong Kong Branch, in respect of the offer and sale
(the Offer) by MPHI of 1,812,000,000 common shares of MPIC at the Offer Price of P =4.90
per share. Closing of the Offer was conditioned, among others, on MPHI subscribing (or
agreeing to subscribe) to the same number of shares at the offer price or a total of
approximately =P8.7 billion, net of transaction costs of P
=0.2 billion . The proceeds from the
placement and subscription transaction were used by MPIC primarily for the reduction of
relatively expensive debt at MPICs affiliate, Beacon Electric, investment in previously
announced projects and general corporate purposes. This transaction resulted to the reduction
of MPHIs economic interest in MPIC from 55.8% as at December 31, 2014 to 52.1% as at
December 31, 2015.
Pursuant to the approval of the BOD in its meeting held on May 27, 2016, MPIC entered into
a Share Subscription Agreement with GTCHI on May 27, 2016, wherein MPIC agreed to
issue in favour of GTCHI, and GTCHI agreed to subscribe to 3.6 billion new common shares
of MPIC (the Subscription Shares) from the increase in authorized capital stock of MPIC,
which application for increase was approved by the SEC on August 5, 2016. The Subscription
Shares was issued at a subscription price of =
P6.10 per share or a total of =
P21.96 billion. On
the same date, GTCHI also acquired a further 1.3 billion common shares of MPIC from
MPHI. Following this transaction, GTCHI and MPHI approximately owned 15.55% and
41.97% of MPICs issued common shares.
Class A Preferred Shares

Holders of Class A Preferred Shares are entitled to vote and shall receive preferential cash
dividends at the rate of 10.0% per annum based on shares par value, upon declaration made at the
sole option of the BOD. Dividends on these preferred shares, which shall be paid out of the Parent
Companys unrestricted retained earnings, are cumulative whether or not in any period the amount
is covered by available unrestricted retained earnings. No dividends or other distributions shall be
paid or declared and set apart for payment in respect of the common shares, unless the full
accumulated dividends on all Class A Preferred Shares shall have been paid or declared. Holders
of Class A Preferred Shares do not have right to participate in any additional dividends declared
for common shareholders. MPHI holds all of the Parent Companys Class A Preferred Shares.
On May 27, 2016, MPIC also entered into a Share Subscription Agreement with MPHI for the
subscription by MPHI of 4.1 billion newly issued Class A Preferred Shares at par value for a total
consideration of =
P41.3 million.
Following the GTCHIs subscription and acquisition of common shares and MPHIs subsctription
of Class A Preferred Shares, MPHIs combined voting interest as a result of all of its
shareholdings is estimated at 55.0%.
There are no undeclared dividends as at December 31, 2016.
*SGVFS021831*
- 70 -
Class B Preferred Shares

The Parent Company may issue one or more series of Class B Preferred Shares, as the BOD may
determine. The BOD shall also determine (a) cash dividend rate of such preferred share, which in
no case to exceed 10.0% per annum; and (b) period and manner of conversion to common shares
or redemption. Dividends on these preferred shares, which shall be paid out of the Parent
Companys unrestricted retained earnings, are cumulative whether or not in any period the amount
is covered by available unrestricted retained earnings. No dividends shall be paid or declared and
set apart for payment in respect of the common shares or Class A Preferred Shares, unless the full
accumulated dividends on all Class B Preferred Shares shall have been paid or declared. Holders
of Class B Preferred Shares do not have right to participate in any additional dividends declared
for common shareholders.
There were no Class B Preferred Shares issued in 2016, 2015 and 2014.
Treasury Shares
On September 1, 2016, MPIC acquired 23,970,000 MPIC common shares, at P =6.9822 per share
from the open market. The treasury shares were acquired pursuant to the share buy-back that shall
partially cover the up to approximately 27.4 million shares to be granted to the directors and key
officers of the Company under the Companys LTIP program, which includes the Restricted Stock
Unit Plan (RSUP; see Note 31).
The RSUP and the implementation thereof which included the share buy-back, were approved by
MPICs Compensation Committee on July 14, 2016, pursuant to the authority granted to it by the
MPICs BOD on March 1, 2016.
Record of Registration of Securities with the SEC
In accordance with SRC Rule 68, as Amended (2011), Annex 68D, below is a summary of the
Companys track record of registration of securities:
Number of holders of
securities as at
Number of registered shares December 31,
Issue Offer price Date of SEC approval securities 2016 2015
Tender offer to shareholders of Metro Four (4) MPC shares for October 25, 2006 Common shares of 1,328 1,334
Pacific Corporation (MPC) one (1) MPIC share plus 56,878,766*
covering common shares and three (3) warrants
subscription warrants relating to Subscription warrants of
common shares of MPIC with 170,636,298
par value of =
P1.0 per share
*Covered the 2006 registered shares only
The shares relating to the transaction above were exchanged in the PSE on December 15, 2006,
effectively listing MPIC via listing by way of Introduction. Out of the total warrants available for
conversion, 143,976,756 warrants were converted as at December 31, 2007 and 2,549,211
warrants expired on December 15, 2007.
Retained Earnings and Cash Dividends
Of the Companys consolidated retained earnings, = P19,022.4 million and =P15,078.0 million is
available for dividend declaration as at December 31, 2016 and 2015, respectively. These
amounts represent the Parent Companys retained earnings available for dividend declaration
calculated based on the regulatory requirements of the Philippine SEC. The difference between
the consolidated retained earnings and the Parent Companys retained earnings available for
dividend declaration primarily consist of undistributed earnings of subsidiaries and equity method
investees. Standalone earnings of the subsidiaries and share in net earnings of equity method
investees are not available for dividend declaration by the Parent Company until declared by the
subsidiaries and equity investees as dividends.
*SGVFS021831*
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Dividends paid and declared and proposed are as follows:
2016 2015 2014

(In Millions)
Paid and declared:
Final dividend in respect of the previous financial
year approved and paid during the following
interim period:
Common shareholders (P =0.061, =
P0.037 and
P
=0.022 per share in 2016, 2015 and
2014, respectively) P
=1,701.6 P
=1,031.1 P
=572.6
Class A preferred shareholders 2.5 1.3 2.5
Interim dividend declared and paid during the
interim period:
P0.032 and
P
=0.026 per share in 2016, 2015
and 2014, respectively) 1,008.8 892.3 677.1
Special one off dividend:
Common shareholders
(P
=0.04 per share in 2014) 1,041.1
=2,715.8
P =1,927.2
P P2,297.0
=
Final dividend*:
P0.061 and
P
=0.037 per share declared in 2017, 2016 and
2015, respectively) P
=2,142.3 P
=1,701.6 P
=1,031.1
=2,146.9
P =1,704.1
P =1,032.4
P
* The final dividends on both common and Class A preferred shares were declared after end of reporting date and as such, are
not recognized as a liability as at yearend.
On March 1, 2017, the BOD approved the declaration of the cash dividends of P =0.068 per
common share in favor of the Parent Companys shareholders of record at March 30, 2017 with
payment date of April 26, 2017. On the same date, the BOD also approved the declaration of cash
dividends amounting to a total of =
P4.6 million in favor of MPHI as the sole holder of Class A
Preferred shares.
Equity Reserves
2016 2015 2014

(In Millions)
Effect of MPIC acquisition of NOHI shares (a) =690
P =690
P =690
P
Equity transactions(b):
Disposal or dilution of equity interest
in a subsidiary(b.1) 7,809 7,809 7,809
Acquisition of NCI(b.2) (2,350) (2,350) (2,377)
Other reserve from ESOP and RSUP (c) 133 99 123
=6,282
P =6,248
P =6,245
P
a. This relates to the difference between the par value of NOHI shares in exchange for MPIC
shares in relation to the Parent Companys acquisition of NOHI shares through share swap in
2006.
*SGVFS021831*
- 72 -
b. Equity transactions represent impact on the equity attributable to owners of the Parent
Company when the Parent Companys ownership interest in its subsidiaries increases or
decreases but does not result in loss of control:
b.1 Disposal or dilution of equity interest in a subsidiary
i. On February 13, 2013, MCNK JV Corporation (MCNK) completed and fully paid its
total subscription of 678,470,727 common shares of stock of MWHC at a total
subscription price of =
P10,400 million giving it 21.54% equity interest in MWHC.
With the entry of MCNK as an investor in MWHC, the Companys effective
ownership in Maynilad decreased from 56.81% as at December 31, 2012, to 52.80%
as at December 31, 2013.
ii. On July 2, 2014, GIC, through Arran Investment Private Limited, invested
=
P3.7 billion for a 14.4% stake in MPHHI and paid = P6.5 billion as consideration for an
Exchangeable Bond which can be exchanged into a 25.5% stake in MPHHI in the
future, subject to certain conditions. This transaction was accounted for in MPICs
consolidated financial statements as an equity transaction with the amount recognized
in Equity reserve representing the difference between (a) the total net proceeds
from GICs investments in MPHHI shares and MPICs Exchangeable Bond
aggregating to P=9.7 billion (net of deferred tax and transaction costs) and (b) sum of
the interest payable of =P149.2 million on the Exchangeable Bond and carrying value
of the non-controlling interest of P
=3.5 billion.
b.2 Acquisition of NCI. In 2014, MPTDC increased its ownership in NLEX Corp. In 2015,
MPHHI acquired additional interest in RMCI (see Note 4).
c. This reserve is used to recognize the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration.
See Note 31 for further details of these plans.
Other Comprehensive Income Reserve

Other comprehensive income reserve consists of the following, net of applicable income taxes:
2016 2015 2014

Share in the OCI of equity method investees =2,021
P P441
= P840
=
Fair value changes on AFS financial assets (4) (7) 35
Fair value changes on cash flow hedges (1)
Actuarial losses 1 (3) (8)
Cumulative translation adjustment (47) 79 (30)
=1,971
P =510
P =836
P
Refer to Note 28 for the movements and analysis of the other comprehensive income.
Non-controlling Interest
For the years ended December 31, 2016, 2015 and 2014, aside from the share in net earnings of
and dividends paid to non-controlling shareholders, significant movements in NCI pertain to the
following:
In 2016, NCI on business combinations (see Note 4).

In 2015, increased equity ownership in RMCI by 20.5% decreased NCI (see Note 4).
In 2014, entry of GIC in MPHHI and increased ownership in NLEX Corp for a net amount of
=
P2,722.0 million.
*SGVFS021831*
- 73 -
Additional investments of =P1,125.0 million in 2015 and P

=723.0 million in 2014 by the non-
controlling stockholders' of LRMC and LRMH in relation to the equity call for the LRT-1
Project.
23. Costs of Sales and Services
2016 2015 2014

(In Millions)
Amortization of service concession assets
(see Note 13) P
=3,679 P
=3,317 P
=2,958
Cost of inventories* (see Note 9) 3,251 2,567 2,375
Personnel cost and employee benefits
(see Note 25) 2,770 2,111 2,366
Operators fees (see Note 21) 2,161 1,898 1,877
Contracted services and professional fees 1,500 937 448
Utilities (see Note 21) 1,416 1,171 1,120
PNCC and BCDA fees (see Notes 1 and 33) 1,319 614 443
Repairs and maintenance 777 536 617
(see Notes 14 and 15) 506 358 312
Warehousing costs 221
Provision for heavy maintenance
(see Note 17) 141 151 225
Insurance 144 69 65
Others 485 297 276
=18,370
P =14,026
P =13,082
P
*Includes cost of medical services, materials and supplies.
24. General and Administrative Expenses
2016 2015 2014

(In Millions)
Personnel costs and employee benefits
(see Note 25) P
=3,349 =
P3,002 =
P2,532
(see Notes 14 and 15) 828 718 737
Outside services (see Note 21) 777 665 645
Professional fees 689 601 459
Taxes and licenses 451 519 503
Advertising and promotion 307 419 181
Repairs and maintenance 293 187 164
Provision for corporate initiatives
and other provisions 257 139 99
Utilities (see Note 21) 215 180 171
Rentals (see Notes 21 and 33) 196 89 81
Entertainment, amusement and representation 157 118 101
(Forward)
*SGVFS021831*
- 74 -
2016 2015 2014

(In Millions)
Transportation and travel P
=155 =201
P =268
P
Administrative supplies 153 165 129
Insurance 137 119 84
Collection charges 136 137 122
Provision for doubtful accounts (see Note 8) 83 102 67
Miscellaneous 879 686 480
P
=9,062 =8,047
P =6,823
P
*Includes public relations, commissions and other various general and administrative expenses.
25. Personnel Costs and Employee Benefits
2016 2015 2014

(In Millions)
Salaries and wages P
=4,321 =3,607
P =3,162
P
LTIP expense 533 568 440
Retirement costs (gain) 233 196 (64)
Provision for ESOP and RSUP
(see Note 31) 67 21 64
Severance cost 7 12 524
Other employee benefits 958 709 772
P
=6,119 =5,113
P =4,898
P
Cost of sales and services (see Note 23) P

=2,770 P
=2,111 P
=2,366
(see Note 24) 3,349 3,002 2,532
P
=6,119 =5,113
P =4,898
P
LongTerm Incentive Plan (LTIP)

Certain of the Companys employees are eligible for longterm employee benefits under a
longterm incentive plan. The liability recognized on the LTIP comprises the present value of the
defined benefit obligation and was determined using the projected unit credit method. Each LTIP
performance cycle generally covers 3 years with payment intended to be made at the end of the
each cycle (without interim payments) and is contingent upon the achievement of an approved
target core income of the Company by the end of the performance cycle. Each LTIP performance
cycle is approved by the respective boards of directors of the entities of the Company.
As at December 31, 2016, 2015 and 2014, the LTIP payable is as follows:
2016 2015 2014

(In Millions)
=1,184 =850
P =455
P
Current service cost 532 542 433
Interest 2 26 9
Actuarial loss (gain) (2) (1)
Payment (1,013) (234) (46)
=703 =1,184
P =850
P
*SGVFS021831*
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2016 2015 2014

(In Millions)
Current (see Note 16) P
= =1,044
P =228
P
Noncurrent (see Note 20) 703 140 622
P
=703 =1,184
P =850
P
The noncurrent portion of the LTIP payable as at December 31, 2016 pertains to MPTC (cycle
2015 to 2017 with pay-out in 2018) and MPIC, MPHHI and Maynilad (cycle 2016 to 2018 with
pay-out in 2019). The current liability on the LTIP as at December 31, 2015 comprises of MPIC,
MPHHI and Maynilads LTIP performance cycle covering 2013 to 2015 which were substantially
paid out in 2016.
On July 14, 2016, the Compensation Committee of MPIC, acting pursuant to the authority granted
to it by MPICs BOD on March 1, 2016, approved MPICs LTIP covering cycle 2016 to 2018.
Beginning 2016, MPICs LTIP comprises of cash incentives and share award (see Note 25).
To fund the LTIP programs for each cycle, MPIC enters into Investment Management Agreement
(IMA) with a Trustee Bank. The LTIP fund will continue to accumulate until the LTIP target
payout. The investment portfolio of IMA is limited to the following: securities issued, directly or
indirectly, or guaranteed by the government; and time deposit and money market placements
issued by any of the top ten (10) banks in the Philippines.
Pension
Regulatory Environment. Republic Act (RA) No. 7641, The Philippine Retirement Law
(R.A. 7641) requires a minimum benefit of equivalent to onehalf months salary for every year of
service, with six months or more of service considered as one year. As the entities of the
Company operate in the Philippines, they provide for either a defined contribution retirement plan
or a defined benefit plan that consider the minimum benefit guarantee mandated under R.A. 7641.
Defined Contribution Retirement Plan. Certain entities of the Company provide the retirement
benefits of employees under a defined contribution scheme. Each of these companies operates its
own retirement plan. The retirement plan is a contributory plan wherein the employer undertakes
to contribute a predetermined amount to the individual account of each employee and the
employee gets whatever is standing to his credit, upon separation, from the company. The
retirement plans are being managed and administered by these companies respective
compensation committee. Each entity has an appointed trustee bank which holds and invests the
assets of the retirement fund in accordance with the provisions of the retirement plan.
Contributions to the retirement plan are made based on the employees monthly basic salary
(ranges from 4% to 13% depending on the companys policy). Additionally, an employee has an
option to make a personal contribution to the fund, at an amount not exceeding a certain
percentage of his monthly salary in accordance with the entitys policy. The employer then
provides an additional contribution to the fund which aims to match the employees contribution
but only up to a maximum of 5.0% of the employees monthly salary. Although the retirement
plans of these entities have a defined contribution format, these entities are covered under
R.A. 7641, which provides a defined benefit minimum guarantee for its qualified employees. The
defined minimum guarantee is equivalent to a certain percentage of the monthly salary payable to
an employee at normal retirement age with the required credited years of service based on the
provisions of R.A. 7641. Accordingly, these entities account for the retirement obligation under
the higher of defined benefit obligation relating to the minimum guarantee and the obligation
*SGVFS021831*
- 76 -
arising from the defined contribution plan. Disclosures required for a defined benefit retirement
plan apply to these companies retirement plans and are provided together with the defined benefit
retirement plans of the other subsidiaries of the Parent Company.
Each year, the compensation committee reviews compliance with R.A. 7641 to evaluate the level
of funding that would ensure that the expected future value of the defined benefit contribution plan
asset is sufficient to cover the future expected value of retirement benefits prescribed by
R.A. 7641.
Defined Benefit Retirement Plan. These plans provide for a lump sum benefit payments upon
retirement.
Certain entities of the Company have funded noncontributory defined benefit retirement plan
covering all their eligible regular employees. For the entities with funded retirement benefit plans,
plan assets are maintained in trust accounts with local banks. While there are no minimum
funding standards in the Philippines, the companies annually engage the services of an actuary to
conduct a valuation study to determine the retirement obligations and the level of funding to
ensure that the assets currently in the fund would be sufficient to cover expected benefit payments.
The rest of the companies within the group each has an unfunded, noncontributory defined benefit
retirement plan covering substantially all of their respective employees. While there are no
minimum funding standards in the Philippines, these entities also annually engage the services of
an actuary to conduct a valuation study to determine the retirement obligations and ensure that
should there be maturing obligations in the immediately succeeding periods, these are
appropriately considered in the budgeting process.
Retirement Costs. The following tables summarize the components of the retirement costs (gain)
under the defined benefit plans and the defined contribution plans included in Personnel costs
and employee benefits under Cost of services and General and administrative expenses
account in the consolidated statement of comprehensive income.
2016 2015 2014

(In Millions)
Current service cost P
=212 =177
P =173
P
Net interest cost 21 19 20
Curtailment gain (257)
Retirement costs (income)
for the year P
=233 =
P196 (P
=64)
Actual return on plan assets P
=17 P
=30 P
=91
The curtailment gain recognized in 2014 is attributable to the reduction in the number of
employees at Maynilad resulting from the the Special Opportunity Program (SOP), a redundancy
and rightsizing program. Total severance for the separated employees amounted to
P
=524.0 million, of which =
P263.0 million is paid out of Maynilads funds while the remaining was
paid out of Maynilads retirement plan asset.
*SGVFS021831*
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Pension Assets and Accrued Retirement Costs. Reconciliation of net liability/(asset) recognized in
the consolidated statement of financial position as at December 31 follows:
2016 2015 2014

(In Millions)
Present value of defined benefit
obligation (PVDBO) P
=1,994 =
P1,758 =
P1,589
Fair value of plan assets (FVPA) 1,511 1,237 1,171
Net liability P
=483 =521
P =418
P
Pension asset(a) (P
=34) (P
=46) (P
=22)
Accrued retirement liability (b) 517 567 440
Net liability P
=483 =521
P =418
P
(a)
Included under Other noncurrent asset account (see Note 15).
(b)
Included under Other longterm liabilities (see Note 20).
Changes in PVDBO are as follows:
2016 2015 2014

(In Millions)
PVDBO at beginning of the year P
=1,758 =1,589
P =1,589
P
PVDBO from acquisitions 7
Interest cost 79 71 73
Current service costs 212 177 173
Benefits paid from:
Plan asset (24) (29) (7)
Company funds (14) (33) (20)
Curtailment (257)
Actuarial losses (gains) due to:
Changes in financial
assumptions (69) (101) 48
Changes in demographics 1 2 (5)
Experience adjustments 44 82 (5)
PVDBO at end of the year P
=1,994 =1,758
P =1,589
P
Changes in FVPA are as follows:
2016 2015 2014

(In Millions)
FVPA at beginning of the year P
=1,237 =1,171
P =1,280
P
FVPA from acquired subsidiaries
Interest income included in net
interest cost 58 52 53
Benefits paid (24) (78) (270)
Contributions by employer 257 122 72
Remeasurement in OCI from return
on plan asset excluding amount
included in net interest cost (17) (30) 36
FVPA at end of the year P
=1,511 =1,237
P =1,171
P
The companies within the group expects to contribute a total of =

P231.0 million to their respective
retirement funds in 2017.
*SGVFS021831*
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The major categories of the plan assets are the following:
2016 2015
(In Millions)
Philippine bonds and treasury notes P
=629 =515
P
Philippine equity securities 379 282
Cash in bank 292 175
Unit trust funds 110 90
Receivables and other assets 81 155
Philippine life insurance plans 20 20
P
=1,511 =1,237
P
The plan assets carrying amount approximates its fair value since these are shortterm in nature
or mark-to-market. Philippine bonds and treasury notes consist of government issued securities
and corporate bonds and subordinated notes. Government securities consist primarily of fixed
rate treasury notes and retail treasury bonds that bear interest ranging from 1.2% to 9.5% (2016)
and 2.1% to 9.5% (2015) and have varying maturities of ranging from 2017 to 2037 as at
December 31, 2016 and 2015. Philippine equity securities pertains to investment in shares of
various listed entities (not related parties of the Company).
While the Company does not perform any AssetLiability Matching Study, the risks arising from
the nature of the assets comprising the fund are mitigated as follows:
Credit Risks. Exposure to credit risk arises from financial assets comprising of cash and cash
equivalents, investments and receivable. The credit risk results from the possible default of
the issuer of the financial instrument, with a maximum exposure equivalent to the carrying
amount of the instruments. The risk is minimized by ensuring that the exposure is limited
only to the instruments as recommended by the trust managers.
Share Price Risk. Exposure arises from holdings of shares of stock being traded at the PSE.
The price risk emanates from the volatility of the stock market. Policy is to limit investments
in shares of stock to blue chip issues or issues with good fair values.
Liquidity Risk. This risk relates to the risk that the fund is unable to meet its payment
obligations associated with its retirement liability when they fall due. To mitigate this risk,
the entities contribute to their respective fund from time to time, based on the
recommendations of their actuaries with the objective of maintaining their respective fund in a
sound condition.
Actuarial assumptions. Principal assumptions used as at December 31, 2016 and 2015 in
determining retirement obligations are shown below:
2016 2015
(In Percentage)
Annual discount rate 4.86% to 5.95% 4.34% to 5.17%
Future range of annual salary increases 1% to 10% 1% to 10%
The discount rate represents the range of single weighted average discount rate used by each of the
entities within the group in arriving at the present value of defined benefit obligation, service and
interest cost components of the retirement cost. Assumptions regarding future mortality rate are
based on the 1994 Group Annuity Mortality Table developed by the U.S. Society of Actuaries,
which provides separate rates for males and females.
*SGVFS021831*
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Sensitivity Analysis. The calculation of the defined benefit obligation is sensitive to the
assumptions set above. The following table summarizes how the present value of defined benefit
obligation as at December 31 would have increased (decreased) as a result of change in the
respective assumptions by:
% Change 2016 2015

(In Millions)
Annual discount rate + 1.0% (P
=133) (P
=130)
1.0% 148 156
Future range of annual salary increases + 1.0% 154 147
1.0% (140) (126)
The following table provides for the maturity analysis of the undiscounted benefit payments as at
December 31:
2016 2015
(In Millions)
Less than one year P
=245 =191
P
More than one year to five years 872 624
More than five to ten years 1,117 1,070
Beyond ten years 7,274 6,197
Total expected benefit payments P
=9,508 =8,082
P
The average duration of the defined benefit obligation is 19 years and 18 years as at
December 31, 2016 and 2015, respectively.
26. Interest Income and Interest Expense

The following are the sources of the Companys interest income:
2016 2015 2014

(In Millions)
Cash and cash equivalents, shortterm deposits
and restricted cash (see Note 7) P
=373 P
=396 P
=253
Investments in bonds and treasury notes
(see Note 10) 40 55 50
Others 4 9 82
P
=417 =460
P =385
P
The following are the sources of the Companys interest expense:
2016 2015 2014

(In Millions)
Longterm debt (see Note 19) P
=4,206 =3,755
P =3,267
P
Accretion on financial liabilities (see Notes 20
and 21) 548 500 215
Accretion on service concession fees
payable (see Note 18) 490 574 644
Amortization of debt issue costs (see Note 19) 61 50 42
Others 23 46 133
P
=5,328 =4,925
P =4,301
P
*SGVFS021831*
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27. Construction Revenue and Other Income and Construction Costs and Other Expenses
2016 2015 2014

(In Millions)
Construction revenue and other income:
Construction revenue (see Notes 3 and 13) =16,799
P =12,130
P =6,670
P
Dividend income (a) 1,353 580 471
Reversal of provisions, accruals and
recovery of accounts written-off
(see Note 17) 666 239 20
Deferred credits and foreign exchange
gains - net 523 222 44
Recovery of value of an investment
(see Note 11) 400
Reversal of contingent liabilities (b) 153 762
Rental income (see Note 33) 135 135 94
Income from advertising (see Note 21) 122 120 95
Management fees (see Note 21) 84 66 103
Income from toll service and utility
facilities (see Note 21) 44 38 24
Gain on sale of investment (c) 222
Others (d) 391 314 748
=20,670
P =14,606
P =8,491
P
Construction costs and other expenses:

Construction costs (see Notes 3 and 13) =16,799
P =12,130
P =6,501
P
Provisions for decline in value of equity
investment (see Note 11) 774
FCDA (see Note 20) 511 200 110
Other provisions (see Notes 17 and 32) 244 493 1,049
Reversal of indemnification asset (b) 555
Others (d) 690 44 227
=19,018
P =13,422
P =7,887
P
a. Included dividends from the Companys investment in Beacon Electrics preferred shares and
dividends from available-for -sale financial assets (see Notes 10, 11 and 21).
b. Contingent liability arising from probable claim from a third party at fair value of P
=1,100 million
was recognized in January 2013 in relation to the acquisition of CIC which was accounted for
under PFRS 3, Business Combination. An indemnification asset was recognized in relation to
such probable claim. Such indemnification asset expired second quarter of 2015. As at
December 31, 2016, the related liability has expired and/or has been settled such that the balance
is nil.
c. On February 28, 2014, MPIC sold to Cosco Capital Inc. all of its shares in NE Pacific Shopping
Center Corporation (NEPSCC) representing 36.89% of NEPSCCs issued and outstanding capital
stock.
d. Others under Construction revenue and other income included other incidental income while
Others under Construction costs and other expenses consists of other incidental expenses.
*SGVFS021831*
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28. Other Comprehensive Income
Other comprehensive income recognized in the consolidated statements of comprehensive income

consists of the following:
2016 2015 2014

(In Millions)
Items to be reclassified to profit or loss in
subsequent periods:
Share in the OCI of an equity method
investee coming from (see Note 11):
Fair value changes in cash flow
hedges P
= P
=46 P
=135
Exchange differences on translation
of foreign operations 718 (330) 32
Change in fair value of AFS financial
assets (154) (1)
Exchange differences on translation
of foreign operations (179) 156 (23)
Fair value changes of cash flow hedges 4 8
Change in fair value of AFS financial
assets (see Note 10) 4 (81) (178)
Income tax 55 (16) 2
444 (222) (24)
Items not to be reclassified to profit or loss
in subsequent periods:
Share in the actuarial gains on defined
benefit plans of equity method
investees (see Note 11) 1,015 (116) (52)
Remeasurement gains (losses) on defined
benefit plans (see Note 25) 13 (14) (1)
Revaluation increment
Income tax (4) (3) 1
1,024 (133) (52)
P
=1,468 (P
=355) (P
=76)
29. Income Tax
a. The Companys deferred tax components as at December 31 are as follows:
2016 2015
(In Millions)
Provisions P
=401 P
=366
Accrued retirement cost and other accrued expenses 150 477
Lease payable 120 120
MCIT 15 27
Excess of fair values over book values resulting
from business combination (2,734) (3,178)
Timing difference in depreciation method (792) (738)
Equity transaction (see Note 22) (483) (483)
Debt issue cost (107) 8
(Forward)
*SGVFS021831*
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2016 2015
(In Millions)
Unamortized foreign exchange losses capitalized
as service concession assets (P
=19) (P
=20)
Unamortized past service cost (33) 42
Improvement of facilities (3) (3)
Others 27 14
Net deferred tax liabilities (P
=3,458) (P
=3,368)
Reflected in the Statement of Financial Position:
2016 2015
(In Millions)
Deferred tax assets (see Note 15) P
=467 P1,242
=
Deferred tax liabilities (3,925) (4,610)
(P
=3,458) (P
=3,368)
Net movement recognized in:

2016 2015 2014
(In Millions)
Profit or loss (P
=67) (P
=303) (P
=48)
Equity (OCI and Equity reserve) (23) (1) (460)
(P
=90) (P
=304) (P
=508)
The Company has the following temporary differences for which no deferred tax assets have
been recognized since management believes that it is not probable that these will be realized in
the near future.
2016 2015
(In Millions)
NOLCO P
=7,179 =5,296
P
Allowance for doubtful accounts 1,029
Provisions and other accruals 354 1,622
MCIT 19 19
Unrealized foreign exchange 9
P
=7,552 =7,975
P
b. The Company has accumulated temporary difference amounting to P =575.8 million and
P
=93.2 million as at December 31, 2016 and 2015, respectively, arising from accumulated
equity in net earnings and share in the OCI from its investment in DMT (a company
incorporated in Thailand; see Note 11) for which no deferred tax liability have been
recognized. The accumulated equity in net earnings if paid out as dividends, would be subect
to tax if remitted to MPIC. An assessable temporary difference exists but no deferred tax
liability has been recognized as MPICs investment in DMT is held through a wholly owned
intermediate holding company AIF. All dividend proceeds in respect of the investment in
DMT shall be applied to repay the loan (see Note 19) and thus, AIF is not expected to
distribute these profits for so long as the loan is outstanding.
*SGVFS021831*
- 83 -
c. As at December 31, 2016 and 2015, NOLCO of the Parent Company and various subsidiaries
can be carried forward and claimed as deduction from regular taxable income as follows:
Year Incurred Amount Acquisition Addition Expired Application Balance Expiry Year
(In Millions)
2016 =
P =
P P
=3,326 =
P =
P P
=3,326 2019
2015 2,214 2,214 2018
2014 1,635 1,635 2017
2013 1,447 (1,447) 2016
P
=5,296 =
P P
=3,326 (P
=1,447) =
P P
=7,175
d. The following carryforward benefits of MCIT can be claimed as tax credits against future
income taxes payable:
Year Incurred Amount Acquisition Addition Expired Application Balance Expiry Year
(In Millions)
2016 =
P =
P =
P6 =
P =
P =
P6 2019
2015 11 11 2018
2014 17 17 2017
2013 18 (18) 2016
=
P46 =
P =
P6 (P
=18) =
P =
P34
e. The current provision for income tax for year ended December 31 consists of the following:
2016 2015 2014

(In Millions)
RCIT P
=4,004 =1,404
P =1,086
P
MCIT 5 30 19
Final tax 82 88 55
P
=4,091 =1,522
P =1,160
P
f. The reconciliation of provision for income tax computed at the statutory income tax rate to
provision for income tax as shown in the consolidated statements of comprehensive income is
summarized as follows:
2016 2015 2014
(In Millions)
Income before income tax =20,937
P =16,899
P =13,782
P
Income tax at statutory tax rate of
30.0% 6,281 5,070 4,135
Net income under ITH (2) (2,406) (2,078)
Share in net earnings of equity
method investees (2,042) (1,504) (950)
Changes in unrecognized deferred
tax assets and others 1,068 556 (117)
Effect of optional standard deduction (1,128) (228) (176)
Various income subjected to lower
final tax rates - net (92) (133) (84)
Final tax on interest income 82 88 55
Nondeductible (nontaxable) expenses
(income) - net (29) 230 405
MCIT 5 30 18
Application of NOLCO 27 120
Others (12) 2
=4,158
P =1,825
P =1,208
P
*SGVFS021831*
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Optional Standard Deduction (OSD)

On December 18, 2008, the BIR issued Revenue Regulation (RR) No. 162008, which
implemented the provisions of R.A. 9504 on OSD, which allowed both individual and corporate
tax payers to use OSD in computing their taxable income. For corporations, they may elect a
standard deduction in an amount equivalent to 40% of gross income, as provided by law, in lieu of
the itemized allowed deductions.
NLEX Corp opted to avail of the OSD for the taxable years 2016 and 2015.
Maynilad, with the expiration of its income tax holiday in December 2015, opted to avail of the
OSD for the taxable year 2016. Also, with the expiration of its income tax holiday, Maynilad
assessed its deferred tax accounts and concluded that the applicable tax rate for the expected
recovery and settlement of the deferred taxes is at the effective tax rate of 18% using OSD. The
remeasurement resulted to the reduction of both the acquisition accounting deferred tax liability
and Maynilads deferred tax asset amounting to P =1,062.0 million and P =324.0 million, respectively,
recognized in the profit or loss for the year ended December 31, 2016.
Income Tax Holiday

Maynilad is registered with the Board of Investments (BOI) as an operator of water supply and
sewerage system for the West Service Area on a pioneer status. Under the terms of the
registration, Maynilad is subject to certain requirements, principally that of maintaining at least
60.0% Filipino ownership or voting equity. As a registered enterprise, Maynilad is entitled to
certain tax and nontax incentives, including Income Tax Holiday (ITH). Maynilads ITH
incentives for the sales generated from the operation of its three plants which substantially cover
its total capacity, ended in December 2015. ITH incentive enjoyed by Maynilad amounted to
P
=2,405.9 million and = P2,078.0 million in 2015 and 2014, respectively.
In 2016, LRMC was registered with the BOI for the modernization of the Existing System and the
construction of the Cavite Extension. Under the BOI registration agreement, LRMC is entitled to
ITH for a period of three years from the indicated completion of the rehabilitation of the existing
system beginning January 2018 and start of commercial operations of the Cavite Extension
beginning April 2021.
30. Earnings Per Share
The calculation of earnings per share for the year ended December 31 follows:
2016 2015 2014

(In Millions, Except for Per Share Amounts)
Net income attributable to owners of the
Parent Company (a) P
=11,456 P
=9,546 P
=7,940
Effect of cumulative dividends on preferred
shareholders of the Parent Company (see Note 22) (b) (7) (5) (5)
Net income attributable to common owners
of the Parent Company (c) P
=11,449 P
=9,541 P
=7,935
*SGVFS021831*
- 85 -
2016 2015 2014

(In Millions, Except for Per Share Amounts)
Outstanding common shares at the beginning
of the year P
=27,885 P
=26,046 P
=26,026
Effect of issuance of common shares during the year 2,171 1,631 12
Effect of share buy-back (see Note 22) (8)
Weighted average number of common shares
for basic earnings per share (d) 30,048 27,677 26,038
Effects of potential dilution from:
ESOP (see Note 31) 28 19 24
Effect of share award (see Note 31) 7
Weighted average number of common shares adjusted
for the effects of potential dilution (e) 30,083 27,696 26,062
Basic earnings per share (c/d) P

=0.3810 P
=0.3447 P
=0.3047
Diluted earnings per share (c/e) P

=0.3806 P
=0.3445 P
=0.3045
Weighted average number of shares issued and outstanding is derived by multiplying the number
of shares outstanding at the beginning of the year, adjusted by the number of shares issued during
the year, with a timeweighting factor. The timeweighting factor is the number of days that the
common shares are outstanding as a proportion to the total number of days in the year.
The share award (in 2016) and the ESOP (in 2016, 2015 and 2014) were considered in the
computation of the diluted earnings.
31. Sharebased Payment

Executive Stock Option Plan (ESOP)
On June 24, 2007, the shareholders of MPIC approved a share option scheme (the Plan) under
which MPICs directors may, at their discretion, invite executives of MPIC upon the
regularization of employment of eligible executives, to take up share option of MPIC to obtain an
ownership interest in MPIC and for the purpose of longterm employment motivation. The
scheme became effective on June 14, 2007 and is valid for 10 years. An amended plan was
approved by the stockholders on February 20, 2009.
As amended, the overall limit on the number of shares that may be issued upon exercise of all
options to be granted and yet to be exercised under the Plan must not exceed 5.0% of the shares in
issue from time to time.
The exercise price in relation to each option shall be determined by the Companys Compensation
Committee, but shall not be lower than the highest of: (i) the closing price of the shares for one or
more board lots of such shares on the PSE on the option offer date; (ii) the average closing price of
the shares for one or more board lots of such shares on the PSE for the five business days on
which dealings in the shares are made immediately preceding the option offer date; and (iii) the
par value of the shares.
Second and Third Grants. MPIC allocated and set aside stock options relating to 145,000,000
common shares, of which (a) a total of 94,300,000 common shares was granted to its new
directors and senior management officers, as well as, members of the management committees
of certain MPIC subsidiaries at the exercise price of =
P2.73 per common share on July 2, 2010
(the Second Grant) and (b) another 10,000,000 common shares was granted at the exercise
price of P
=3.50 on December 21, 2010 to officers of Maynilad (the Third
Grant A).
*SGVFS021831*
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On March 8, 2011, 1,000,000 common shares were granted at the exercise price of P=3.53 to
senior management of Maynilad (the Third Grant B) and on April 14, 2011, another 3,000,000
common shares was granted at the exercise price of =
P3.66 to an MPIC officer (the Third
Grant C).
In 2015, total option cost of the expired ESOP shares from Second Grant amounting to
=
P5 million was reclassified from Equity reserves to Retained earnings. Outstanding
options under the Second and Third Grants as at December 31, 2016 is at nil.
Fourth Grant. On October 14, 2013, MPIC made an ESOP grant (the Fourth Grant)
consisting of 112.0 million common shares, to its directors and senior management officers, as
well as, members of the senior management of certain MPIC subsidiaries. The grant was
approved by the Philippine SEC on March 4, 2014. For the years ended December 31, 2016
and 2015, the weighted average remaining term to expiry for the share options outstanding is
1.8 years and 2.8 years, respectively.
For the years ended December 31, 2016 and 2015, the weighted average share price of MPICs
common share is =P6.41 and =
P4.95 per share, respectively. Total ESOP expense recognized in
Personnel cost and Equity reserve amounted to nil, P
=21.0 million and P
=64.0 million for the
years ended December 31, 2016, 2015 and 2014 respectively.
The following table illustrates the number of, exercise prices of, and movements in share options
in 2016 and 2015:
Second Grant
Tranche A Tranche B
Number Exercise Number Exercise
of shares Price of shares Price
Outstanding at January 1, 2015 21,000,000 P
=2.73 7,060,000 P
=2.73
Exercised during the year (see Note 22) (17,000,000) 2.73 (5,825,000) 2.73
Expired during the year (4,000,000) (1,235,000)
Outstanding at December 31, 2015 =
P =
P
Exercisable at:
December 31, 2014 21,000,000 P
=2.73 7,060,000 P
=2.73
Third Grant
Tranche A Tranche B Tranche C
Number Exercise Number Exercise Number Exercise
of shares price of shares price of shares price
=3.50 =
P 778,000 P
=3.66
Exercised during the year (see Note 22) (3,500,000) 3.50 (778,000) 3.66
Expired during the period
Outstanding at December 31, 2015 =
P =
P =
P
Exercisable at:
December 31, 2014 3,500,000 3.50 778,000 3.66
Fourth Grant
Tranche A Tranche B
Number Exercise Number Exercise
of shares Price of shares Price
=4.60 56,000,000 P
=4.60
Exercised during the year (see Note 22)
Outstanding at December 31, 2015 55,000,000 P
=4.60 56,000,000 P
=4.60
Exercised during the year (see Note 22) 42,475,000 4.60
Outstanding at December 31, 2016 12,525,000 P
= 4.60 56,000,000 P
= 4.60
Exercisable at:
December 31, 2014 55,000,000 P
=4.60 =
P
December 31, 2015 55,000,000 4.60 56,000,000 4.60
December 31, 2016 12,525,000 4.60 56,000,000 4.60
*SGVFS021831*
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The fair value of the options granted is estimated at the date of grant using BlackScholesMerton
formula, taking into account the terms and conditions at the time the options were granted. The
following tables list the inputs to the model used for the ESOP:
Second Grant
Tranche A Tranche B
50.0% 50.0% 30.0% 35.0% 35.0%
vesting on vesting on vesting on vesting on vesting on
January 1, January 1, July 2, July 2, July 2,
2011 2012 2011 2012 2013
Spot Price =
P2.65 =
P2.65 =
P2.65 =
P2.65 =
P2.65
Exercise price =
P2.73 =
P2.73 =
P2.73 =
P2.73 =
P2.73
Riskfree rate 4.16% 4.92% 4.61% 5.21% 5.67%
Expected volatility* 48.33% 69.83% 69.27% 67.52% 76.60%
Term to vesting in days 183 548 365 731 1,096
Call price =
P0.35 =
P0.91 =
P0.73 =
P1.03 =
P1.39
Third Grant Fourth Grant

Tranche A Tranche B Tranche C Tranche A Tranche B
30.0% 35.0% 35.0% 30.0% 35.0% 35.0% 50.0% 50.0% 50.0% 50.0%
vesting on vesting on vesting on vesting on vesting on vesting on vesting on vesting on vesting on vesting on
August 1, August 1, August 1, March 8, March 8, March 8, April 14, April 14, October 14, October 14,
2011 2012 2013 2012 2013 2014 2012 2013 2014 2015
Spot Price =3.47
P =3.47
P =3.47
P =3.53
P =3.53
P =3.53
P =3.66
P =3.66
P =4.59
P =4.59
P
Exercise price =3.50
P =3.50
P =3.50
P =3.53
P =3.53
P =3.53
P =3.66
P =3.66
P =4.60
P =4.60
P
Riskfree rate 1.62% 2.83% 3.73% 2.56% 4.38% 5.01% 2.05% 3.83% 0.66% 2.40%
Expected volatility* 46.62% 68.23% 72.82% 39.32% 61.39% 64.42% 39.13% 60.76% 35.23% 33.07%
Term to vesting in days 223 589 954 366 731 1,096 366 731 365 730
Call price =0.46
P =1.20
P =1.62
P =0.58
P =1.28
P =1.62
P =0.60
P =1.30
P =0.63
P =0.89
P
* The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not
necessarily be the actual outcome.
Restricted Stock Unit Plan (RSUP)

On July 14, 2016, the Compensation Committee of MPIC approved the RSUP as part of MPICs
LTIP. The RSUP, which has a validity period of ten (10) years, replaced the Parent Companys
ESOP, which will expire in 2018.
The RSUP is designed, among others, to reward the Directors and certain key officers of MPIC
who contribute to its growth to stay with MPIC for the long term. Under the RSUP, which shall
have a cycle of three (3) years starting 2016, MPIC, at its cost will reacquire MPIC common
shares to be held as treasury shares and reserved to be transferred to the Directors and key officers
determined by the Committee to be eligible to participate under the RSUP. Vested shares will be
transferred in the name of the eligible participants on full vesting date, at no cost as provided
under the RSUP.
The RSUP also limits the aggregate number of shares that may be subject to award to no more
than three percent (3%) of the outstanding common shares of MPIC. For the first 3-year cycle
(i.e., 2016 to 2018), MPIC will acquire up to 27.4 million common shares at such time and under
such terms and conditions as the Committee may determine.
A total of 27,400,000 shares (Share Award) under the RSUP were granted for the LTIP cycle 2016
to 2018. Fair value of the Share Award was determined using the market closing price of P =7.15
per share on date of grant. One third (or 33.33%) of the share award vests every 31st of December
beginning 2016 until fully vested by December 31, 2018.
On September 2, 2016, a total of 23,970,000 MPIC common shares were reacquired (see Note 22).
Total Share Award expense for the year ended December 31, 2016 amounted to = P67.0 million
included in Personnel costs under General and administrative expenses account in the
consolidated statements of comprehensive income.
*SGVFS021831*
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32. Contingencies
Water
Rate Rebasing Adjustment. MWSS released Board of Trustees Resolution No. 2013-100-RO
dated September 12, 2013 and RO Resolution No. 13-010-CA dated September 10, 2013 on the
rate rebasing adjustment for the rate rebasing period 2013 to 2017 reducing Maynilads 2012
average all-in basic water charge by 4.82% or = P1.46 per cubic meter (cu.m.) or P
=0.29 per cu.m.
over the next five years. Maynilad has formally notified its objection and initiated arbitration
proceedings. On October 4, 2013, Maynilad filed its Dispute Notice before the Appeals Panel.
On December 17, 2013, the Regulatory Office released Resolution No. 13-011-CA regarding the
implementation of a status quo for Maynilads Standard Rates and FCDA for any and all its
scheduled adjustments until such time that the Appeals Panel has issued the Final Award.
On January 5, 2015, Maynilad officially received the Appeals Panels award dated
December 29, 2014 (the Arbitral Award) upholding Maynilads alternative Rebasing
Adjustment for the Fourth Rate Rebasing Period of 13.41% or its equivalent of P =4.06 per cu.m.
This increase has effectively been reduced to P =3.06 per cu.m., following the integration of the
=
P1.00 Currency Exchange Rate Adjustment (CERA) into the basic water charge. To mitigate the
impact of the tariff increase on its customers, Maynilad offered to stagger its implementation over
a three-year period.
The Arbitral Award, being final and binding on the parties, Maynilad asked the MWSS to cause
its Board of Trustees to approve the 2015 Tariffs Table so that the same can be published and
implemented 15 days after its publication.
However, the MWSS and the RO have chosen, over Maynilads repeated objections, to defer the
implementation of the Arbitral Award despite it being final and binding on the parties. In its letter
dated February 9, 2015, the MWSS and RO, who received their copy of the Arbitral Award on
January 7, 2015, informed Maynilad that they have decided to await the final outcome of their
arbitration with the other concessionaire, Manila Water, before making any official
pronouncements on the applicable resulting water rates for the two concessionaires.
On February 20, 2015, Maynilad wrote the Philippine Government, through the DOF, to call on
the Undertaking which the ROP issued in favor of Maynilad on July 31, 1997 and March 17, 2010
(see Note 1 Concession Arrangements). On March 9, 2015, Maynilad again wrote the ROP,
through the DOF, to reiterate its demand against the Undertaking. The letters dated February 20
and March 9, 2015 are collectively referred to as the Demand Letters. Maynilad demanded that
it be paid, immediately and without further delay, the =
P3.4 billion in revenue losses that it had
sustained as a direct result of the MWSS and the ROs refusal to implement its correct Rebasing
Adjustment from January 1, 2013 (the commencement of the Fourth Rate Rebasing Period) to
February 28, 2015.
On March 27, 2015, Maynilad served a Notice of Arbitration and Statement of Claim upon the
ROP, through the DOF. Maynilad gave notice and demanded that the ROPs failure or refusal to
pay the amounts required under the Demand Letters be, pursuant to the terms of the Undertaking,
referred to arbitration before a three-member panel appointed and conduct proceedings in
Singapore in accordance with the 1976 United Nations Commission on International Trade Law
(UNCITRAL) Arbitration Rules.
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On April 21, 2015, the MWSS Board of Trustees in its Resolution No. 2015-004-CA dated
March 25, 2015 approved to partially implement the Arbitral Award of a tariff adjustment of
=
P0.64 per cu.m. which, net of the =
P1.00 CERA, actually translates to a tariff adjustment of
negative =
P0.36 per cu.m. as opposed to the Arbitral Award of P
=3.06 per cu.m. tariff adjustment,
net of CERA. For being contrary to the Final Award as well as the provisions of the concession
agreement, Maynilad did not implement this tariff adjustment.
On May 14, 2015, the MWSS Board of Trustees in its Resolution No. 2015-060-RO approved a
7.52% increase in the prevailing average basic charge of =
P31.25 per cu.m. or an upward
adjustment of =
P2.35 per cu.m. as partial implementation of the Arbitral Award. With the
discontinuance of CERA, the net adjustment in average water charge is 4.32% or P =1.35 per cu.m.
In the fourth quarter of 2015, the Arbitration Tribunal was constituted. On February 17, 2016,
Maynilad again wrote the ROP, through the DOF, to reiterate its demand against the Undertaking
and to update its claim. Evidentiary hearings were completed in December 2016. As of that date,
the result is still pending. As at December 31, 2016 and 2015, Maynilads revenue losses due to
the delayed implementation of the Arbitral Award are estimated at = P8.2 billion and
P
=6.1 billion, respectively.
As at March 1, 2017, management cannot determine with reasonable certainty the probable
outcome of the arbitration proceedings. As such, the consolidated financial statements do not
include any adjustments that might result from arbitration proceeding.
Disputes with MWSS. In prior years, Maynilad has been contesting certain charges billed by
MWSS relating to: (a) the basis of the computation of interest; (b) MWSS cost of borrowings; and
(c) additional penalties. Consequently, Maynilad has not provided for these additional charges.
These disputed charges have been reflected by virtue of the Debt and Capital Restructuring
Agreement (DCRA) entered into in 2005. Accordingly, Maynilad has recognized these additional
charges, referred to as Tranche B Concession Fees in the DCRA, amounting to US$30.1 million.
The Receiver determined an additional amount of Tranche B Concession Fees of US$6.8 million.
As at December 31, 2015 and 2014, Maynilad had recognized Tranche B Concession Fees of
US$36.9 million.
Maynilad reconciled its liability to MWSS with the confirmation and billings of MWSS. The
difference between the amount confirmed by MWSS and the amount recognized by the Maynilad
amounted to = P5.1 billion as at December 31, 2016 and 2015, respectively. The difference mainly
pertains to disputed claims of MWSS consisting of additional Tranche B Concession Fees,
borrowing cost and interest penalty under the Concession Agreement (prior to the DCRA).
Maynilads position on these charges is consistent with the Receivers recommendation which was
upheld by the Rehabilitation Court.
Following the issuance of the Rehabilitation Courts Order on December 19, 2007 disallowing the
MWSS disputed claims and the termination of Maynilads rehabilitation proceedings, Maynilad
and MWSS sought to resolve the matter in accordance with the dispute resolution requirements of
the Transitional and Clarificatory Agreement (TCA).
Prior to the DCRA, Maynilad has accrued interest on its payable to MWSS based on the terms of
the Concession Agreement, which was disputed by MWSS before the Rehabilitation Court. These
already amounted to P =985.3 million as at December 31, 2011 and have been charged to interest
expense in prior years. Maynilad maintains that the accrued interest on its payable to MWSS has
been adequately replaced by the Tranche B Concession Fees discussed above. Maynilads
position is consistent with the Receivers recommendation which was upheld by the Rehabilitation
*SGVFS021831*
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Court. With the prescription of the TCA and in light of Maynilads outstanding offer of
US$14.0 million to fully settle the claim of MWSS, Maynilad reversed the amount of accrued
interest in excess of the US$14.0 million settlement offer. The remaining balance of
P
=607.2 million as at December 31, 2016 and 2015, which pertains to the disputed interest penalty
under the Concession Agreement prior to DCRA, has remained in the books pending resolution of
the remaining disputed claims of MWSS.
Real Property Taxes Assessment. On October 13, 2005, Maynilad and Manila Water Company,
Inc. (the Concessionaires) were jointly assessed by the Municipality of Norzagaray, Bulacan for
real property taxes on certain common purpose facilities purportedly due from 1998 to 2005
amounting to = P357.1 million. It is the position of the Concessionaires that these properties are
owned by the ROP and therefore, exempt from taxation.
The supposed joint liability of the Concessionaires for real property tax, including interests, as at
December 31, 2016 and 2015 amounted to P =1.0 billion.
After the Local Board of Assessment Appeals (LBAA) ruled in favor of the Municipality of
Norzagaray, Bulacan, the Concessionaires elevated the ruling of the LBAA to the Central Board of
Assessment Appeals (CBAA) by filing separate appeals. As at March 1, 2017, the case is still
pending.
Others. Maynilad is a party to various civil and labor cases relating to breach of contracts with
damages, illegal dismissal of employees, and nonpayment of backwages, benefits and performance
bonus, among others. Other disclosures required by PAS 37 were not provided as it may prejudice
Maynilads position in ongoing claims, litigations and assessments.
Toll Segment
Toll Rate Adjustments - NLEX Corp. NLEX Corp, as petitioner-applicant, filed the following
petitions for the approval of Periodic Toll Rate Adjustment (PTRA) with the TRB praying for the
adjustments of the toll rates:
In June 2012, for the NLEX PTRA effective January 1, 2013 (2012 Petition);
In September 2014, for NLEX PTRA effective January 1, 2015 (2014 Petition); and
In September 2016, for the PTRA for the NLEX and SCTEX effective January 1, 2017 (2016
Petition).
In August 2015, NLEX Corp wrote the ROP, acting by and through the TRB, a Final Demand for
Compensation based on overdue toll rate adjustments that should have been effective
January 1, 2013 and January 1, 2015 (Final Demand). However, the ROP/TRB failed to heed on
the Final Demand and as such, NLEX Corp sent a Notice of Dispute to the ROP/TRB dated
September 11, 2015 invoking STOA Clause 19 (Settlement of Disputes). STOA Clause 19.1 states
that the parties shall endeavor to amicably settle the dispute within sixty (60) calendar days. The
TRB sent several letters to NLEX Corp requesting the extension of the amicable settlement period.
However, NLEX Corp has not received any feasible settlement offer from the ROP/TRB.
Accordingly, on April 4, 2016, NLEX Corp was compelled to issue a Notice of Arbitration and
Statement of Claim (Notice of Arbitration) to the ROP, acting by and through the TRB, consistent
with STOA Clause 19 in order to preserve its rights under the STOA.
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In May 2016, TRB through Office of the Solicitor General (OSG) nominated their arbitrator for
NLEX and their preferred venue for arbitration. In a letter dated June 1, 2016, NLEX Corp
proposed that the arbitration be held in Singapore which is the seat of arbitration that the ROP has
chosen for its various PPP projects, and proposed the Singapore International Arbitration Center
as the Appointing Authority. In a letter dated July 13, 2016, the ROP, acting by and through the
OSG, stated that it accepts Singapore as the venue of arbitration, but reiterated its previous
proposal that a Philippine-based institution/person be the Appointing Authority.
Under the SCTEX Toll Operations Agreement, toll rate adjustment petitions shall be filed with
the TRB yearly. Prior to NLEX Corps take-over of the SCTEX operations, the BCDA filed
petitions for toll rate adjustment that should have been effective in 2012, 2013, 2014, and 2016.
Thereafter, in September 2016, NLEX Corp, as petitioner-applicant, filed a petition for toll rate
adjustment effective January 1, 2017. The TRB approval of these SCTEX toll rate adjustment
petitions remains pending as at March 2017.
As at March 1, 2017, NLEX Corp has yet to receive regulatory approval for all the petitions for
the approval of the PTRA. As of December 31, 2016, total amount of compensation for TRBs
inaction on lawful toll rate adjustments which were due since January 1, 2013 for NLEX, is
approximately at =P4.4 billion (VAT-exclusive).
Toll Rate Adjustments - CIC. CIC filed the following petitions for the approval of the PTRA with
the TRB:
On the R-1 Expressway:

o In September 2011, for the PTRA effective January 1, 2012 (2011 Petition);
o In September 2014, for the PTRA with an Application for Provisional Relief with
toll rates effective January 1, 2015 (2014 Petition); and
o In November 2016, for the PTRA effective January 1, 2017 (2016 Petition).
On R-1 Extension:
o In September 2013, for the PTRA effective January 1, 2014 (2013 Petition);
o In September 2016, for the PTRA effective January 1, 2017 (2016 Petition).
In August 2015, for failure to implement toll rate adjustments, CIC filed notices with the TRB
demanding settlement of the past due tariff increases amounting to P
=719.0 million based on the
overdue toll rate adjustments as at July 31, 2015 for the CAVITEX.
In April 2016, CIC issued a Notice of Arbitration and Statement of Claim to the ROP, acting by
and through the TRB, consistent with the dispute resolution procedures under its Toll Operation
Agreement (TOA) to obtain compensation in the amount of P =877 Million (as of March 27, 2016)
for TRBs inaction on lawful toll rate adjustments which were due January 1, 2012,
January 1, 2014, and January 1, 2015. Singapore shall be the venue of arbitration. In February
2017, CIC received notice from the Permanent Court of Arbitration that the authority who will
appoint the chairperson of the Arbitration Panel has been designated.
As at March 1, 2017, CIC has yet to receive regulatory approval for all the petitions filed on the
PTRA. As of December 31, 2016, total amount of compensation for TRBs inaction on lawful toll
rate adjustments which were due since January 1, 2012 for both R1 and R1-Extension is
approximately at =
P1.1 billion (VAT-exclusive and net of PRA share).
*SGVFS021831*
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ValueAdded Tax (VAT). In view of RMC 392011, NLEX Corp started imposing VAT on toll
fees from motorists and correspondingly started recognizing VAT liability on October 1, 2011.
Through all the years that the issues of VAT are being discussed, NLEX Corp received the
following VAT assessments:
NLEX Corp received a Formal Letter of Demand from the BIR on March 16, 2009 requesting
NLEX Corp to pay deficiency VAT plus penalties amounting to P
=1,010.5 million for taxable
year 2006.
NLEX Corp received a Final Assessment Notice from the BIR dated November 15, 2009,
assessing NLEX Corp for deficiency VAT plus penalties amounting to P
=557.6 million for
taxable year 2007.
NLEX Corp received a Notice of Informal Assessment from the BIR dated October 5, 2009,
assessing NLEX Corp for deficiency VAT plus penalties amounting to P
=470.9 million for
taxable year 2008.
On May 21, 2010, the BIR issued a Notice of Informal Conference assessing NLEX Corp for
deficiency VAT plus penalties amounting to =
P1.0 billion for taxable year 2009.
On June 11, 2010, NLEX Corp filed its position paper with the BIR reiterating its claim that it
is not subject to VAT on toll fees.
On April 3, 2014, the BIR accepted and approved the NLEX Corps application for abatement and
issued a Certificate of Approval for the cancellation of the basic output tax, interest and
compromise penalty amounting to P =1,010.5 million and = P584.6 million for taxable years 2006 and
2007, respectively.
Notwithstanding the foregoing, management believes, in consultation with its legal counsel, that in
any event, the STOA among NLEX Corp, ROP, acting by and through the Toll Regulatory Board,
and PNCC, provides NLEX Corp with legal recourse in order to protect its lawful interests in case
there is a change in existing laws, which makes the performance by NLEX Corp of its obligations
materially more expensive.
Real Property Tax (RPT). NLEX Corp has filed several Petitions for Review under Section 226 of
the Local Government Code with the Local Board of Assessment Appeals (LBAA) of the
Province of Bulacan on July 15, 2008 and April 16, 2013, seeking to declare as null and void
certain tax assessments and tax declarations issued by the Provincial Assessor of the Province of
Bulacan. The said tax declarations were issued in the name of NLEX Corp as owner of the North
Luzon Expressway and categorizing the North Luzon Expressway as a commercial property,
subject to real property tax. As at September 18, 2013, the total amount of tax assessed by the
Province of Bulacan against NLEX Corp was = P304.9 million. The LBAA has yet to determine
whether said properties in fact covers portions of the NLEX, which NLEX Corp argues are part of
the public domain and exempt from real property tax.
On September 27, 2013, the Bureau of Local Government Finance of the Department of Finance
(DOFBLGF) wrote a letter to the Province of Bulacan advising it to hold in abeyance any
further course of action pertaining to the alleged real property tax delinquency. On
October 4, 2013, the Provincial Treasurer of Bulacan has respected the directive from the
DOFBLGF to hold the enforcement of any collection remedies in abeyance.
*SGVFS021831*
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The outcome of the claims on RPT cannot be presently determined. The management of NLEX
Corp believes that these claims will not have a significant impact on the Companys consolidated
financial statements and believes that the STOA also provides NLEX Corp with legal recourse in
order to protect its lawful interests in case there is a change in existing laws which makes the
performance by NLEX Corp of its obligations materially more expensive.
Others. The companies in the toll operations segment are also parties to other cases and claims
arising from the ordinary course of business filed by third parties, which are either pending
decisions by the courts or are subject to settlement agreements. The outcome of these claims
cannot be presently determined. In the opinion of management and its legal counsel, the eventual
liability from these lawsuits or claims, if any, will not have a material adverse effect on the
Companys consolidated financial statements.
Power
4th Regulatory Period Reset Application. MERALCO was among the first entrants to the
Performance-Based Regulation (PBR). Rate setting under PBR is governed by the Rules for
Setting Distribution Wheeling Rates (RDWR). The PBR scheme sets tariffs based on the
regulated asset base of the Distribution Utility (DU), and the required operating and capital
expenditures once every regulatory period (RP), to meet operational performance and service level
requirements responsive to the need for adequate, reliable and quality power, efficient service,
growth of all customer classes in the franchise area as approved by the Energy Regulatory
Commission (ERC). PBR also employs a mechanism that penalizes or rewards a DU depending
on its network and service performance. Rate filings and setting are done every RP where one RP
consists of four regulatory years. A regulatory year (RY) begins on July 1st and ends on June 30th
of the following year.
The last year of MERALCOs 3rd RP ended on June 30, 2015. The 4th RP for Group A
entrants commenced on July 1, 2015 and shall end on June 30, 2019. To initiate the reset process,
the ERC posted in its website on April 12, 2016, the following draft issuance for comments, to
wit:
Draft Rules for Setting Distribution Wheeling Rates for Privately Owned Distribution
Utilities Operating under Performance Based Regulation, First Entry Group: Fourth
Regulatory Period;
Draft Position Paper: Regulatory Reset for the July 1, 2015 to June 30, 2019 Fourth
Regulatory Period for the First Entry Group of Privately Owned Distribution Utilities subject
to Performance Based Regulation; and
Draft Commission Resolution on the Issues on the Implementation of PBR for Privately
Owned DUs under the RDWR.
Under ERC Resolution No. 25, Series of 2016 dated July 12, 2016, the ERC promulgated a
Resolution modifying the Rules for Setting Distribution Rates (RDWR) for Privately-Owned
Distribution Utilities Entering Performance Based Regulation (PBR).
On December 2, 2016, the ERC released a Notice of Proposed Rule-Making setting the petition
filed by a consumer group for initial hearing on January 9, 2017. All interested parties were given
until December 26, 2016 to file their comments on said Petition.
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In the Petition, the consumer group seeks a repeal of the PBR rate-setting methodology for setting
distribution wheeling rates. In a subsequent Order and Notice of Public Hearing, the ERC reset the
hearing to January 23, 2017 and gave interested parties until January 9, 2017 to file their
respective comments to the Petition. MERALCO filed its Comment to the Petition on
January 9, 2017. The consumer group moved for a resetting of the January 23, 2017 hearing. The
next hearing is set on March 17, 2017.
In a Notice dated November 16, 2016, the ERC approved the draft Regulatory Asset Base
(RAB) Roll Forward Handbook for Privately Owned Electricity Distribution Utilities (DUs)
(RAB Handbook) for posting in its website. All interested parties were given until
December 19, 2016 to submit their respective comments to the draft RAB Handbook. Thereafter,
during the public consultation on January 9, 2017, the parties were given until February 9, 2017 to
file their comments to the draft RAB Handbook. In an Omnibus Motion filed on
February 9, 2017, MERALCO submitted its initial comments to the draft RAB Handbook but
moved for the deferment of the proceedings until the consumer group Petition has been resolved.
MERALCO also files with the ERC its applications for over/under-recoveries of pass-through
costs. These consist mainly of differential generation, transmission and system loss charges
technically referred to as over/under-recoveries, which are refundable/recoverable from the
customers, as allowed by law.
Interim Average Rate for RY 2016. On June 11, 2015, MERALCO filed its application for the
approval of a proposed Interim Average Rate of P =1.3939 per kWh and translation thereof into rate
tariffs by customer category. On July 10, 2015, the ERC provisionally approved an Interim
Average Rate of P=1.3810 per kWh and the rate translation per customer class, which was reflected
in the customer bills starting July 2015. As at March 1, 2017, intervenors are set to present their
own evidence after the ERC rules on pending motions.
Supreme Court (SC) Temporary Restraining Order (TRO) on December 2013 Increase in
MERALCO Billing Rate. On December 9, 2013, the ERC gave clearance to the request of
MERALCO to implement a staggered collection over three (3) months covering the
December 2013 billing month for the increase in generation charge and other bill components such
as value added tax, local franchise tax, transmission charge, and system loss charge. The
generation costs for the November 2013 supply month increased significantly because of the
aberrant spike in the Wholesale Electricity Spot Market (WESM) charges on account of the non-
compliance with WESM Rules by certain plants resulting in significant power generation
capacities not being offered and dispatched, and the scheduled and extended shutdowns, and the
forced outages, of several base load power plants, and the use of the more expensive liquid fuel or
bio-diesel by the natural gas-fired power plants that were affected by the Malampaya Gas Field,
shutdown from November 11 to December 10, 2013.
On December 19, 2013, several party-list representatives of the House of Representatives filed a
Petition against MERALCO, ERC and the DOE before the SC, questioning the ERC clearance
granted to MERALCO to charge the resulting price increase, alleging the lack of hearing and due
process. It also sought for the declaration of the unconstitutionality of the Electric Power Industry
Reform Act (EPIRA), which essentially declared the generation and supply sectors competitive
and open, and not considered public utilities. A similar petition was filed by a consumer group
and several private homeowners associations challenging also the legality of the Automatic
Generation Rate Adjustment (AGRA) that the ERC had promulgated. Both petitions prayed for
the issuance of TRO, and a Writ of Preliminary Injunction.
*SGVFS021831*
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On December 23, 2013, the SC consolidated the two (2) Petitions and granted the application for
TRO effective immediately and for a period of 60 days, which effectively enjoined the ERC and
MERALCO from implementing the price increase. The SC also ordered MERALCO, ERC and
DOE to file their respective comments to the Petitions. Oral Arguments were conducted on
January 21, 2014, February 4, 2014 and February 11, 2014. Thereafter, the SC ordered all the
Parties to the consolidated Petitions to file their respective Memorandum on or before
February 26, 2014 after which the Petitions will be deemed submitted for resolution of the SC.
MERALCO complied with said directive and filed its Memorandum on said date.
On February 18, 2014, acting on the motion filed by the Petitioners, the SC extended for another
60 days or until April 22, 2014, the TRO that it originally issued against MERALCO and ERC last
December 23, 2013. The TRO was also similarly applied to the generating companies,
specifically MPPCL, SMEC, SPPC, FGPC, and the NGCP, and the Philippine Electricity Market
Corporation (PEMC; the administrator of WESM and market operator) who were all enjoined
from collecting from MERALCO the deferred amounts representing the P =4.15 per kWh price
increase for the November 2013 supply month.
In the meantime, on January 30, 2014, MERALCO filed an Omnibus Motion with Manifestation
with the ERC for the latter to direct PEMC to conduct a re-run or re-calculation of the WESM
prices for the supply months of November to December 2013. Subsequently, on
February 17, 2014, MERALCO filed with the ERC an Application for the recovery of deferred
generation costs for the December 2013 supply month praying that it be allowed to recover the
same over a six (6)-month period.
On March 3, 2014, the ERC issued an Order voiding the Luzon WESM prices during the
November and December 2013 supply months on the basis of the preliminary findings of its
Investigating Unit that these are not reasonable, rational and competitive, and imposing the use of
regulated rates for the said period. PEMC was given seven (7) days upon receipt of the Order to
calculate these regulated prices and implement the same in the revised WESM bills of the
concerned DUs in Luzon. PEMCs recalculated power bills for the supply month of
December 2013 resulted in a net reduction of the December 2013 supply month bill of the WESM
by =
P9.3 billion. Due to the pendency of the TRO, no adjustment was made to the WESM bill of
MERALCO for the November 2013 supply month. The timing of amounts to be credited to
MERALCO is dependent on the reimbursement of PEMC from associated generator companies.
However, several generating companies, including MPPCL, SN Aboitiz Power, Inc., Team
Energy, PanAsia Energy, Inc., and San Miguel Energy Corporation (SMEC), have filed motions
for reconsideration questioning the Order dated March 3, 2014. MERALCO has filed a
consolidated comment to these motions for reconsideration. In an Order dated October 15, 2014,
the ERC denied the motions for reconsideration. The generating companies have appealed the
Orders with the CA where the petitions are pending. MERALCO has filed a motion to intervene
and a comment in intervention in the petition filed by SMEC and shall file similar pleadings in the
cases filed by the other generators.
In view of the pendency of the various submissions before the ERC and mindful of the
complexities in the implementation of ERCs Order dated March 3, 2014, the ERC directed
PEMC to provide the market participants an additional period of 45 days to comply with the
settlement of their respective adjusted WESM bills. In an Order dated May 9, 2014, the parties
were then given an additional non-extendible period of 30 days from receipt of the Order within
which to settle their WESM bills. However, in an Order dated June 6, 2014 and acting on an
intervention filed by Angeles Electric Corporation, the ERC deemed it appropriate to hold in
abeyance the settlement of PEMCs adjusted WESM bills by the market participants.
*SGVFS021831*
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On April 22, 2014, the SC extended indefinitely the TRO issued on December 23, 2013 and
February 18, 2014 and directed generating companies, NGCP and PEMC not to collect from
MERALCO. As at March 1, 2017, the SC has yet to resolve the various petitions filed against
MERALCO, ERC, and DOE.
ERC and DOE Resolutions on Retail Competition and Open Access Prohibiting the Operations of
the Local Retail Electricity Supply business segment. On March 8, 2016, the ERC promulgated
Resolution No. 05 Series of 2016 entitled A Resolution Adopting the 2016 Rules Governing the
Issuance of Licenses to Retail Electricity Suppliers (RES) and Prescribing the Requirements and
Conditions Therefor. The Resolution removed the term Local RES as one of the entities that may
engage in the business of supplying electricity to the Contestable Market without need of
obtaining a license therefor from the ERC. Moreover, while an affiliate of a DU is allowed to
become a RES, the allowance is subject to restrictions imposed by the ERC on market share
limits and the conduct of business activities.
On May 12, 2016, the ERC issued Resolutions No. 10 and 11, Series of 2016, which:
Provided for Mandatory contestability. Failure of a Contestable Customer to switch to RES

upon date of mandatory contestability (December 26, 2016 for those with average demand of
at least one (1) MW and June 26, 2017 for at least 750 MW) shall result in the physical
disconnection from the DU system unless it is served by the Suppliers of Last Resort (SOLR,
or, if applicable, procures power from the WESM;
Prohibits DUs from engaging in the Supply of electricity to the Contestable Market except in
its capacity as a SOLR;
Mandates Local RESs to wind down their supply businesses within a period of three (3) years;
Imposes upon all RESs, including DU-affiliate RESs, a market-share cap of 30% of the total
average monthly peak demand of all contestable customers in the competitive retail electricity
market; and
Prohibits RESs from transacting more than 50% of the total energy transactions of its Supply
business, with its affiliate Contestable Customers.
On May 27, 2016, MERALCO filed a Petition before Pasig RTC, praying that: (a) a TRO and
subsequently a Writ of Preliminary Injunction (WPI) enjoining the DOE and ERC from
implementing the Assailed Rules be issued; and the Assailed Rules be declared null and void for
being contrary to the EPIRA and its IRR. In an Order dated July 13, 2016, RTC-Pasig granted a
WPI, which became effective on July 14, 2016, and shall be effective for the duration of the
pendency of the Petition.
Meanwhile, ERC filed a Petition for Certiorari and Prohibition with prayer for TRO and/or WPI
before the SC (SC Petition), which asserted that RTC-Pasig has no jurisdiction to take
cognizance of MERALCOs Petition, citing Sec. 78 of the EPIRA. A similar petition was
subsequently filed by the DOE before the SC.
On October 10, 2016, the SC, in relation to the Petition filed by DOE, issued a TRO that
restrained, MERALCO, the RTC Pasig, their representatives, agents or other persons acting on
their behalf from continuing the proceedings before the RTC Pasig, and from enforcing all orders,
resolutions and decisions rendered in Special Civil Action No. 4149 until the petition before the
SC is finally resolved. In a Resolution dated November 9, 2016, the SC denied MERALCOs
motion for reconsideration of the October 10, 2016 Resolution.
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On November 2, 2016, in relation to the Petition filed by the ERC, the SC issued a Resolution
dated September 26, 2016, which partially granted the ERC Petition. While the SC allowed the
RTC to proceed with the principal case of declaratory relief, it nonetheless issued a Preliminary
Mandatory Injunction (PMI) against RTC Pasig to vacate the preliminary injunction it
previously issued, and Preliminary Injunction (PI) ordering the RTC Pasig to refrain issuing
further orders and resolutions tending to enjoin the implementation of EPIRA. On
November 14, 2016, MERALCO filed a Motion for Partial Reconsideration with Very Urgent
Motion to lift PMI/ PI.
On November 24, 2016, the ERC promulgated a resolution moving the contestability date of end
users with an average monthly peak demand of at least one (1) MW from December 31, 2016 to
February 26, 2017.
On January 17, 2017, MERALCO, through counsel, received an SC Resolution dated

December 5, 2016, which consolidated the SC DOE Petition with the SC ERC Petition. The same
resolution also denied the Motion for Partial Reconsideration filed by MERALCO.
In relation to the ERC and DOE Petitions, a separate Petition for Certiorari, Prohibition and
Injuction was filed by Philippine Chamber of Commerce and Industry (PCCI), San Beda
College Alabang, Inc., Ateneo de Manila University and Riverbanks Development Corporation, In
said Petition PCCI et. al sought to declare as null and void, as well as to enjoin the DOE and ERC
from implementing DOE Circular No. 2015-06- 0010, Series of 2015, ERC Resolution Nos. 5, 10,
11 and 28, Series of 2016. Acting on the Petition, the Supreme Court en banc through a Resolution
dated February 21, 2017, issued a TRO enjoining the DOE and the ERC from implementing DOE
Circular No. 2015-06- 0010 Series of 2015, ERC Resolution Nos. 5, 10, 11 and 28 Series of 2016.
Others. MERALCO and its subsidiaries are subject to various pending or threatened legal actions
in the ordinary course of business which, if the conclusion is unfavorable to MERALCO and
subsidiaries, may result in the payout of substantial claims and/or the adjustment of electricity
distribution rates. These contingencies substantially represent the amounts of claims related to a
commercial contract which remains unresolved and local taxes being contested. Other disclosures
required by PAS 37 were not provided as it may prejudice MERALCOs position in ongoing
claims, litigations and assessments.
Rail
Claims with Grantors. In accordance with Schedule 5 of the LRT-1 Project Concession
Agreement, LRMC is entitled to be compensated for the unavoidable incremental cost that the
LRMC will incur to restore the Existing System to the level necessary to meet all of the baseline
Existing System Requirements taking into consideration any Emergency Upgrade Contract
executed by the Grantors for the same purpose, if the Existing System does not meet the ESR as
certified by the Independent Consultant (IC).
LRMC is also entitled to receive compensation from the Grantors if the Grantors do not make
available a minimum of one hundred (100) light rail vehicles or the system is not able to operate to
a cycle time of no more than one hundred and six (106) minutes, or a combination of the two on
the effective date. The compensation is based on the formula and procedures provided for in the
concession agreement.
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On October 30, 2015, LRMC submitted a letter to the DOTC representing its claim for ESR costs
and LRV shortfall on the premise of the Grantors obligation in relation to the condition of the
Existing System prior or as of the effective date. Subsequently, on November 16, 2015, the
Grantors sent a letter of dispute in response to the claims of LRMC.
As at December 31, 2016, LRMC submitted five letters (first to fifth Balancing Payments) to the
DOTC representing its claim for ESR costs and LRV shortfall on the premise of the Grantors
obligation in relation to the condition of the Existing System prior or as of the Effective Date, fare
deficit, and contractor and other additional costs incurred less Key Performance Indicator charges.
LRMC has submitted its sixth balancing payment on January 30, 2017. These claims are still
undergoing discussion as at March 1, 2017.
Others
Donors Tax. NOHI received on January 14, 2011 a Final Assessment Notice (FAN) demanding
the payment of approximately P =199.7 million as deficiency donors tax (including surcharge and
interest as at January 31, 2011) on the excess of the book value over the selling price of several
shares of stock in Bonifacio Land Corporation (BLC) which NOHI sold to a third party. The
assessment was based on the finding of the Bureau of Internal RevenueLarge Taxpayer Service
(BIRLTS) that the transaction is subject to donors tax as a deemed gift transaction under
Section 100 of the 1997 National Internal Revenue Tax Code (the Tax Code).
On February 14, 2011, NOHI filed its formal protest to the FAN raising several factual and legal
arguments. However, this was denied by the BIR through the letter it has delivered to NOHI
stating its Final Decision on Disputed Assessment (FDDA). NOHI then filed a Petition for
Review with the Second Division of the Court of Tax Appeals (CTA) to challenge the FDDA. On
June 11, 2014, the CTA rendered its decision on the case which did not sustain NOHIs position.
NOHI filed a Motion for Reconsideration on the CTA 2nd Divisions decision as NOHI firmly
believes that it is not liable for the deficiency donors taxes and that it has strong legal and factual
basis to support its claim. On September 16, 2014, the CTA 2nd Division issued an Order
denying NOHIs Motion for Reconsideration. In October 2014, NOHI, through its counsel, filed a
Petition for Review before the CTA en banc praying for, among others, the reversal of the decision
of the CTA 2nd Division. In January 2015, the CTA en banc gave due course to the petition for
Review and directed the parties to submit their memoranda. The case on appeal is deemed
submitted for the decision of the CTA en banc.
On May 4, 2016, the CTA En Banc promulgated its decision, which was received on
May 13, 2016, denying the company's Petition for Review dated October 21, 2014 and affirming
the adverse decision of the Second Division of the Court dated June 11, 2014 and Resolution of
the Second Division dated September 16, 2014 which denied NOHI's Motion for Reconsideration.
Subsequently, on May 24, 2016, a Motion for Reconsideration was filed on the aforesaid decision
of the CTA En Banc. The Commissioner of Internal Revenue submitted a Comment on the
companys Motion for Reconsideration on July 27, 2016. The Motion for Reconsideration which
was filed on May 24, 2016 is now deemed submitted for decision. On October 28, 2016, NOHI
received a copy of the Resolution of the CTA En Banc dated October 18, 2016 denying NOHIs
Motion for Reconsideration.
On November 7, 2016, NOHI filed with the Supreme Court a motion for an extension of thirty
(30) days from November 12, 2016 to until December 12, 2016, within which to file a Petition for
Review with the said Court as appeal from the decision and resolution of the CTA En Banc. On
December 12, 2016, NOHI filed with the SC the required Petition for Review dated
December 9, 2016. As at March 1, 2017, NOHI is awaiting the action of the Supreme Court on
the Petition for Review.
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Indemnity. Under the agreement relating to the repayment of a certain loan signed between NOHI,
Ayala Land Inc. (ALI) and Greenfield Development Corp. (GDC) on April 17, 2003, certain
obligations/warranties by NOHI will remain outstanding for certain periods ranging from one to
three years and covered by security arrangements. Under the agreement, NOHI shall indemnify
ALI and GDC to the extent of NOHIs derivative share in BLC/ Fort Bonifacio Development
Corporation (FBDC) for certain secured indemnity obligations and other obligations resulting
from any breach of warranties and representations.
ALI and GDC have formally advised NOHI in their letter dated September 19, 2003 that they are
allocating the pledge of 5.0% interest of NOHI in BLC and a condominium unit in Pacific Plaza
Tower for possible payment of secured indemnity obligations enumerated in their letter. Total
estimated indemnity amounts to P =434.1 million, determined based on certain possible taxes that
were actually claimed by ALI and GDC within the warranty period, which expired on
April 17, 2007.
In September 2009, NOHI sold 2,603,708 shares out of the 5% interest in BLC pledged to
Columbus Holdings, Inc. (Columbus), a company jointly owned by ALI and GDC, at an agreed
purchase price of =
P158.0 per share for a total consideration of P
=411.4 million. No gain was
recognized on the sale pending Supreme Court judgment on the ongoing documentary stamp tax
claim against FBDC in which case and in the event of an unfavorable judgment against FBDC, the
total proceeds from the sale will be returned to Columbus. Consequently, NOHI recognized an
additional provision amounting to = P54.8 million in 2009 for liability equivalent to the unrealized
gain. Thus, total provision for warranties and guarantees amounted to P =488.9 million
(see Note 17).
On June 26, 2013, NOHI was informed that the Supreme Court rendered judgment in favor of
FBDC. On August 9, 2016, NOHI received release from the guarantee undertaking from
Columbus prompting the reversal of the provision amounting to =
P488.9 million
(see Notes 17 and 27).
33. Significant Contracts, Agreements and Commitments
Water
Contracts. In relation to Maynilads Concession Agreement (see Note 1), Maynilad entered into
the following contracts with Manila Water (the East Concessionaire):
a. Interconnection Agreement wherein the two Concessionaires shall form an unincorporated

joint venture that will manage, operate, and maintain interconnection facilities. The terms of
the agreement provide, among others, the cost and the volume of water to be transferred
between zones; and,
b. Common Purpose Facilities Agreement that provides for the operation, maintenance, renewal,
and, as appropriate, decommissioning of the Common Purpose Facilities, and performance of
other functions pursuant to and in accordance with the provisions of the Concession
Agreement and performance of such other functions relating to the concession (and the
concession of the East Concessionaire) as Maynilad and the East Concessionaire may choose
to delegate to the Joint Venture, subject to the approval of MWSS.
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Commitments under the Concession Agreement. Significant commitments under the Concession
Agreement follow:
a. Payment of Concession Fees (see Note 18)
b. Posting of performance bond
Under Section 6.9 of the Concession Agreement, Maynilad is required to post a performance
bond to secure the performance of its obligations under certain provisions of the Concession
Agreement.
The aggregate amount drawable in one or more installments under such performance bond
during the Rate Rebasing Period to which it relates is set out below.
Aggregate Amount
Drawable Under
Rate Rebasing Period Performance Bond
(In Millions)
First (August 1, 1997 December 31, 2002) US$120.0
Second (January 1, 2003 December 31, 2007) 120.0
Third (January 1, 2008 December 31, 2012) 90.0
Fourth (January 1, 2013 December 31, 2017) 80.0
Fifth (January 1, 2018 May 6, 2022) 60.0
Within 30 days from the commencement of each renewal date, Maynilad shall cause the
performance bond to be reinstated to the full amount set forth above applicable for the year.
In connection with the extension of the term of Maynilads Concession Agreement

(see Note 1), certain adjustments to the obligation of Maynilad to post the performance bond
under Section 6.9 of the Concession Agreement have been approved and summarized as
follows:
The aggregate amount drawable in one or more installments under each performance bond
during the Rate Rebasing Period to which it relates has been adjusted to US$30.0 million
until the Expiration Date;
The amount of the Performance Bond for the period covering 2023 to 2037 shall be
mutually agreed upon in writing by the MWSS and Maynilad consistent with the
provisions of the Concession Agreement.
Maynilad posted the Surety Bond for the amount of US$90.0 million issued by Prudential
Guarantee and Assurance, Inc. (the Surety) in favor of MWSS, as security for Maynilads
proper and timely performance of its obligations under the Concession Agreement. On
December 6, 2012, Maynilad renewed the Surety Bond for the amount of US$80.0 million
issued by the Surety in favor of MWSS. The liability of the Surety under this bond will
expire on December 31, 2017.
c. Payment of half of MWSS and MWSSROs budgeted expenditures for the subsequent years,
provided the aggregate annual budgeted expenditures do not exceed P =200.0 million, subject to
CPI adjustments. Beginning 2010, the annual budgeted expenditures shall increase by
100.0%, subject to CPI adjustments, as a result of the extension of the life of the Maynilads
concession agreement.
*SGVFS021831*
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d. To meet certain specific commitments in respect to the provision of water and sewerage
services in the West Service Area, unless modified by the MWSSRO due to unforeseen
circumstances.
e. To operate, maintain, renew and, as appropriate, decommission facilities in a manner

consistent with the National Building Standards and best industrial practices so that, at all
times, the water and sewerage system in the West Service Area is capable of meeting the
service obligations (as such obligations may be revised from time to time by the MWSSRO
following consultation with Maynilad).
f. To repair and correct, on a priority basis, any defect in the facilities that could adversely affect
public health or welfare, or cause damage to persons or thirdparty property.
g. To ensure that at all times Maynilad has sufficient financial, material and personnel resources
available to meet its obligations under the Concession Agreement.
h. Nonincurrence of debt or liability that would mature beyond the term of the Concession
Agreement, without the prior notice of MWSS.
Failure of Maynilad to perform any of its obligations under the Concession Agreement of a
kind or to a degree which, in a reasonable opinion of the MWSSRO, amounts to an effective
abandonment of the Concession Agreement and which failure continues for at least 30 days
after written notice from the MWSSRO, may cause the Concession Agreement to be
terminated.
Operating Lease Commitment. Maynilad and its subsidiaries leases the office space, branches
where service outlets are located, equipment and service vehicles, renewable under certain terms
and conditions to be agreed upon by the parties. Total rent expense for the above operating leases
amounted to = P143.7 million, =
P150.6 million and =
P167.7 million in 2016, 2015 and 2014,
respectively.
Future minimum operating lease payments as at December 31, 2016 and 2015 are:
Period Covered 2016 2015

(In Millions)
Not later than one year P
=126 P95
=
More than one year and not later than five years 335 208
More than five years 155 169
Operation and Maintenance Agreement with Rio Verde Water Consortium, Inc (RVWCI). On
December 22, 2014, MPWIC entered into an agreement to operate and maintain the 100 MLD
bulk water facility of RVWCI located in Baungon, Bukidnon. The agreement will be
implemented through a subsidiary to be incorporated by MPWIC. RVWCI is the exclusive
supplier of bulk surface water to Cagayan de Oro Water District which supplies the water needs of
more than 80% of Cagayan de Oros population of 640,000.
Toll Operations
Concession Agreements. Aside from the payment of concession fees (see Note 18), other
significant commitments under or that are related to the concession agreements follow:
Commitments under the Connector Road Concession Agreement. During the concession period,
NLEX Corp shall pay for the project overhead expenses to be incurred by the DPWH and the TRB
in the process of their monitoring, inspecting, evaluating and checking the progress and quality of
*SGVFS021831*
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the activities and works undertaken by NLEX Corp. NLEX Corps liability for the payment of the
project overhead expenses due to TRB shall not exceed P =50.0 million and the liability for the
payment of the project overhead expenses due the DPWH shall not exceed = P200.0 million;
provided, that these limits may be increased in case of inflation, or in case of additional work due
to a concessionaire variation that will result in an extension of the construction period or
concession period, upon mutual agreement of the parties in the concession agreement.
PNCC. PNCC is a noncontrolling stockholder in NLEX Corp. In consideration of the
assignment by PNCC of its usufructuary rights, interests and privileges under its franchise, PNCC
is entitled to receive payment equivalent to 6% and 2% of the toll revenues from the NLEX and
Segment 7, respectively. Any unpaid balance carried forward will accrue interest at the rate of the
latest Philippine 91-day Treasury bill rate plus 1% per annum. This entitlement, as affirmed in the
Amended and Restated Shareholders Agreement (ARSA) dated September 30, 2004, shall be
subordinated to operating expenses and the requirements of the financing agreements and shall be
paid out subject to availability of funds.
The PNCC franchise expired in May 2007. On April 12, 2011, the SC issued a resolution
directing NLEX Corp to remit PNCCs share in the net income from toll revenues to the National
Treasury and the TRB, with the assistance of the Commission on Audit (COA), was directed to
prepare and finalize the implementing rules and guidelines relative to the determination of the net
income remittable by PNCC to the National Treasury.
In accordance with the TRB directive, 90% of the PNCC fee and dividends payable are to be
remitted to the TRB, while the balance of 10% to PNCC.
O&M Agreement for the CAVITEX. Pursuant to the TOA covering the CAVITEX, PRA
established PEATC, its wholly owned subsidiary, to undertake the O&M obligations of PRA
under the TOA. PEATC shall collect the toll fees from the toll paying traffic and deposit such
collections to the O&M Account maintained with a local bank.
On November 14, 2006, CIC, PRA and TRB entered into an O&M Agreement to clarify and
amend certain rights and obligations under the JVA and TOA covering the CAVITEX. Included
in the the salient provisions of the O&M Agreement is the revenue sharing provision between
PRA and CIC. PRA shall receive 8.5% of gross toll revenue while CIC shall receive 91.5% of the
gross toll revenue and will absorb all O&M costs and expenses. The share of PRA shall be
increased by 0.5% every periodic toll rate adjustment under the TOA but not to exceed 10.0% of
gross toll revenue at any one time during the repayment period of the loan.
Upon repayment in full of the loans and interest costs, advances, capital investment and the return
of equity, CIC and PRA shall share at the ratio of 40.0% and 60.0%, respectively, as originally
agreed upon under the JVA.
The current share of PRA based on gross revenue is 9.0% while CICs share is 91.0% which took
effect on the last toll rate adjustment on January 1, 2009.
Construction Contract for NLEX Segment 10. On April 28, 2014, NLEX Corp signed a target cost
construction contract with Leighton Contractors (Asia) Ltd. (LCAL) for the construction of NLEX
Segment 10. The contract structure is collaborative in nature and provides a risk and reward sharing
mechanism if the actual construction cost exceeds or falls below the agreed target. LCALs
performance obligations under the contract are backed up by: (i) a bankissued irrevocable standby
letter of credit, (ii) cash retention, and (iii) a guarantee issued by Leighton Asia Limited.
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On May 8, 2014, NLEX Corp issued the notice to proceed to LCAL, signalling the start of
preconstruction activities. Pursuant to the contract, NLEX Corp placed a reserve amount of
=
P889 million in an escrow account on July 28, 2014 to cover payment default leading to suspension of
works. This reserve amount is included in the Restricted cash account presented as a separate line
item in the consolidated statements of financial position as at December 31, 2016 and 2015.
Construction is in progress as at March 1, 2017 with target completion date by fourth quarter of 2017.
Merger between NLEX Corp and TMC. On October 19, 2016, the BOD of NLEX Corp approved the
proposed merger between NLEX Corp and TMC, with NLEX Corp as the surviving corporation. On
November 17, 2016, majority of the stockholders of NLEX Corp confirmed and ratified the proposed
merger between MNTC and TMC, with MNTC as the surviving corporation. As the surviving
corporation, NLEX Corps corporate existence shall continue and shall: (a) acquire all respective
rights, businesses, assets and other properties of TMC, and (b) assume all the debts and liabilities of
TMC.
The execution of the merger shall be subject to regulatory approvals, including the Philippine
Competition Commission, and shall take effect 15 days from and after the approval by the Securities
and Exchange Commission of the Articles of Merger and the issuance of Filing of the Articles of
Merger. The merger is expected to be completed by the second half of 2017.
Healthcare
Lease agreements. The following companies entered into the following lease agreements:
EMHMC with Our Lady of Lourdes Hospital, Inc. (OLLHI) and Servants of the Holy Spirit,
Inc. (SSpS) covering Our Lady of Lourdes Hospital (OLLH) properties and improvements and
the operations and management of OLLH;
CVHMC with the Roman Catholic Archbishop of Manila (RCAM) for covering the hospital
assets (consisting of land, building, improvemnts, machineries, equipment and trademark) of
Cardinal Santos Medical Center (CSMC); and
MPZHC with WMMCI covering the land and hospital building.
The leases of EMHMC and CVHMC are for a period of 20 years, renewable for successive
periods of 10 years upon the mutual consent of both parties. The lease of MPZHC is for a period
of 20 years and may be renewed under terms and conditions mutually acceptable.
These leases were accounted for as acquisition of a business in accordance with PFRS 3.
As consideration for the lease agreement, MPZHC pays fixed fees which shall escalate yearly as
indicated in the lease agreement. As consideration for the lease agreement, EMHMC and
CVHMC pay fixed and variable monthly rates, where the variable rate is based on the prior years
net revenues.
Lease payments under the arrangements disclosed above as follows:

2016 2015
Fixed Variable Total Fixed Variable Total
(In Millions)
Not later than one year P
=57 P
=74 P
=131 P
=57 P
=71 P
=128
More than one year and not later
than five years 247 336 583 239 319 558
More than five years 568 981 1,549 633 1,070 1,703
Total lease payments 872 1,391 2,263 929 1,460 2,389
Less amount representing interest 1,148 1,271
Present value of lease obligation P
=1,115 P
=1,118
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The lease agreement with OLLHI included a Capital Expenditure (CAPEX) program, wherein
EMHMC commits to invest, by way of capital expenditures of at least P
=350.0 million to improve
and develop OLLH, no later than November 1, 2015. As at June 2015, the EMHMC has complied
with its commitment of =
P350.0 million capital expenditures.
CVHMC has a commitment to make a Capital Expenditure in CSMC amounting to at least

P
=750.0 million (CAPEX Commitment) no later than the 10th anniversary of the Agreement, with
at least =
P250.0 million of which shall be spent over a period of three years, and with majority
spent as CAPEX for Expansion and Development no later than the 10th anniversary of the
closing date of the agreement. In the event that CVHMC fails to make or infuse the commitment
in the amounts and within the period stated, CVHMC shall deposit in escrow such deficiency in an
account to be determined by both parties. CVHMC has infused = P1,630.7 million and
P
=1,242.3 million to the Capital Expenditure program as at December 31, 2016 and 2015,
respectively.
Rail
Concession Agreement. Aside from the payment of concession fees (see Note 18), other
significant commitments under or that are related to the concession agreement follow:
The Section 5 of the LRT-1 Concession Agreement provides for conditions and mechanisms that
will ensure and thereby compel the parties to fulfill their obligations in relation to LRT-1
Concession. In the event of failure to meet the conditions set forth therein, the parties to the
agreement are accorded with rights, including rights to compensation from the party/parties in
breach. For the LRMC as the Concessionaire, the LRT-1 Concession Agreement provides for the
following claims from the Grantors:
ESR. LRMC is entitled to be compensated for the unavoidable incremental cost that LRMC
will incur to restore the Existing System to the level necessary to meet all of the baseline
Existing System Requirements, taking into consideration any Emergency Upgrade Contract
executed by the Grantors for the same purpose, if the Existing System does not meet the ESR
as certified by the Independent Consultant (IC).
SDR. LRMC is entitled to compensation for the cost incurred for restoration of the Structural
Defect as certified by an IC which shall be the aggregate of the approved Restoration Cost in
the Structural Defects Notice and any incremental cost approved by the IC.
LRV shortfall. If the Grantors do not make available a minimum of one hundred (100) light
rail vehicles or the system is not able to operate to a cycle time of no more than one hundred
and six (106) minutes, or a combination of the two on the Effective Date, then LRMC is
entitled to receive a compensation from the Grantors based on the formula and procedures
provided for in the LRT-1 Concession Agreement.
Fare Deficit/Surplus. The fare deficit/surplus pertains to the difference between the Approved
and Notional Fare, as follows:
a) If Approved Fare is less than the Notional Fare, there is a deficit payment or a receivable
from the Grantors;
b) If Approved Fare is more than the Notional Fare, there is a surplus payment or payable to
Grantors.
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The Approved Fare is the maximum fare that the Concessionaire is authorized to charge
pursuant to Sections 20.3b and/or 30.4 of the LRT-1 Concession Agreement. Whereas, the
Notional Fare is the agreed base fare provided in the LRT-1 Concession Agreement that
should have been in effect upon turnover of the LRT-1 operation.
Grantors Compensation Payment. The Grantors shall be liable to provide compensation to

LRMC if LRMC is delayed in the completion of the Railway Infrastructure and Railway
System Works or is prevented from operating any part of the System or incurs additional cost
or loss of revenue by reason of:
a) Material Adverse Government Action
b) Grantors Delay Event
c) Subject to Sec. 5.3(b) Grantors Obligations, the failure of the Existing System to meet the
Existing System Requirement on the Effective Date
d) Any other cause in respect of which the LRT-1 Concession Agreement provides for the
provision of Grantors compensation
Under Section 20.6 of the LRT-1 Concession Agreement, all these claims are expressed to be paid
through the quarterly Balancing Payments.
Non-rail Activities. Upon hand-over of the LRT-1, the LRTA transferred to LRMC (as Lessor)
certain agreements on lease of commercial spaces located within LRT-1 stations, on
interconnection fees and advertising contracts for trains and outdoor/indoor walls of the structures.
Most of these contracts were renewed and have commenced during the last quarter of 2015. These
agreements cover a period of less than a year.
In November 2015, LRMC granted Phar Singapore Pte. Ltd the exclusive right to generate
Ancillary Revenue from all agreed commercial activities (i.e., advertising, partnerships, and
sponsorships) within the existing LRT-1 system. The contract was effective beginning
February 1, 2016 and will be for a period of 10 years.
Rent income, interconnection and advertising fees earned relevant to these agreements amounted
to =
P75.5 million and =
P17.4 million in 2016 and 2015, respectively (see Note 27).
Construction of the Cavite Extension. On February 11, 2016, LRMC signed an EPC Agreement
for the construction of LRT-1 Cavite Extension with Bouygues Travaux Publics Philippines Inc.,
Alstom Transport S.A. and Alstom Transport Construction Philippines Inc. which shall commence
upon the issuance by the Grantors of a notice to proceed. There was no actual construction yet as
at December 31, 2016.
Escrow Agreement. On October 20, 2014, pursuant to the requirements of the LRT-1 Concession
Agreement, DOTC, LRTA, LRMC, the initial shareholders of LRMC (namely AC Infra, MPLRC
and MIHPL) and Security Bank as Escrow Agent entered into a Share Escrow Agreement.
Under the Share Escrow Agreement, each of the initial shareholders delivers to the Share Escrow
Agent original stock certificates representing all of their respective equity interests in LRMC.
Such shares would be held in escrow until the third anniversary of the Extension Completion Date
as defined under the LRT-1 Concession Agreement.
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34. Assets Held in Trust
Materials and Supplies

Maynilad has the right to use any item of inventory owned by MWSS in carrying out its
responsibility under the Maynilad Concession Agreement (see Note 1), subject to the obligation to
return the same at the end of the concession period, in kind or in value at its current rate, subject to
CPI adjustments.
Facilities
Maynilad had been granted the right to operate, maintain in good working order, repair,
decommission and refurbish the movable properties required to provide the water and sewerage
services under the Maynilad Concession Agreement (see Note 1). MWSS shall retain legal title to
all movable properties in existence at the commencement date on August 1, 1997. However, upon
expiration of the useful life of any such movable property as may be determined by Maynilad,
such movable properties shall be returned to MWSS in its thencurrent condition at no charge to
MWSS or Maynilad (see Note 13).
The concession agreement also provides Maynilad and the East Concessionaire to have equal
access to MWSS facilities involved in the provision of water supply and sewerage services in both
West and East Service Areas including, but not limited to, the MWSS management information
system, billing system, telemetry system, central control room and central records.
The net book value of the facilities transferred to Maynilad on commencement date based on
MWSS closing audit report amounted to P =7.3 billion with a sound value of P
=13.8 billion.
MWSS corporate headquarters are made available to Maynilad and the East Concessionaire for a
oneyear period beginning on the commencement date, subject to yearly renewal with the consent
of the parties concerned. As at December 31, 2016, the lease has been renewed for another year.
Rent expense related to these properties amounted to P
=38.0 million in 2016, 2015 and 2014.
35. Financial Risk Management Objectives and Policies
The Companys principal financial instruments consist mainly of borrowings from related parties
and third party creditors, proceeds of which were used for the acquisition of investments and in
financing operations. The Company has other financial assets and financial liabilities such as cash
and cash equivalents, shortterm deposits, receivables, accounts payable and other current
liabilities, service concession fees payable and other related party transactions which arise directly
from the Companys operations. The Company also holds AFS financial assets.
The main risks arising from the Companys financial instruments are credit risk, liquidity risk,
interest rate risk, and foreign currency risk. The BOD reviews and approves policies of managing
each of these risks and they are summarized below.
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Credit Risk
Credit risk is the risk that the Company will incur a loss arising from customers, clients or
counterparties that fail to discharge their contracted obligations. The Company manages and
controls credit risk by setting limits on the amount of risk that the Company is willing to accept
for individual counterparties and by monitoring exposures in relation to such limits. Specific risks
are as follows:
MPIC. MPICs exposure to credit risk is equal to the carrying amount of its financial assets.
MPIC has no concentration of credit risk.
Water. Because of the basic need service that Maynilad provides, historical collections of
Maynilad are relatively high, thus, credit risk exposure is widely dispersed. Maynilad billings
are payable on the due date, which is normally 14 days from the billing date. However,
customers are given 60 days to settle any unpaid bills before disconnection. Receivable
balances are monitored on an ongoing basis with the result that the Companys exposure to
bad debts is not significant.
Toll Operations. Receivables arose mainly from ESC when Easytrip tagmotorists ply in
NLEX and those nontoll revenues in the form of advertising services particularly from
SMART (see Note 8). ESC, a joint venture of the Company, assists NLEX Corp in increasing
the usage of the electronic toll collection (ETC) facility (see Note 11 and 21). The segments
due from related parties are mainly from TMC. ESC, SMART and TMC are considered as
lowrisk counterparties as these are wellestablished companies. Receivables also arose from
motorists who cause accidental damage to NLEX property from daytoday operations.
Property damage claims are initially processed by TMC and are eventually turned over to
NLEX Corp. NLEX Corp also has advances made to DPWH, a Philippine government entity,
which is covered by a Reimbursement Agreement (see Note 8).
NLEX Corp also generates nontoll revenues in the form of service fees collected from
business locators, generally called TSF (toll service facilities), along the stretch of the NLEX.
The collection of such fees is provided in the STOA and is based on the principle that these
TSF derive benefit from offering goods and services to NLEX motorists. The fees range from
onetime access fees to recurring fees calculated as a percentage of sales. The arrangements
are backed by a service facility contract between NLEX Corp and the various locators. The
credit risk on these arrangements is minimal because the fees are collected on a monthly basis
mostly from wellestablished companies. The exposure is also limited given that the
recurring amounts are not significant and there are adequate safeguards in the contract against
payment delinquency. Nevertheless, NLEX Corp closely monitors receivables from the TSF.
This segments exposure to credit risk arises from default of the counterparty, with a
maximum exposure equal to carrying amount of these financial assets. The Company does not
require any collateral for its financial assets.
Healthcare. The hospitals of the Company manages risk by setting credit limits for all
customers and by monitoring credit exposures and the creditworthiness of counterparties.
Credit limits are set and a regular review of these limits is being done by management. Credit
is extended only to reputable entities such as HMO and insurance companies.
Rail. LRMCs exposure to credit risk is equal to the carrying amount of its financial assets.
LRMC has no concentration of credit risk.
*SGVFS021831*
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Logistics. Customers are subject to credit verification procedures and approval to ensure
creditworthiness. The logistics group has policies that limit the amount of credit exposure to
any particular customers. The logistics group does not have any significant credit risk
exposure to any single counterparty.
The table below shows the maximum exposure to credit risk of the Company without considering
the effects of collaterals, credit enhancements and other credit risk mitigation techniques and the
net maximum exposure to credit risk of the Company considering the effects of collaterals, credit
enhancements and other credit risk mitigation techniques.
The credit enhancement relating to cash and cash equivalents pertains to insured deposits in banks
as prescribed by Philippine Deposit Insurance Corporation.
*SGVFS021831*
- 109 -
2016 2015
Fair Value and Fair Value and
Financial Financial
Effect of Effect of
Gross Collateral or Gross Collateral
Maximum Credit Net Maximum or Credit Net
Exposure Enhancement Exposure Exposure Enhancement exposure
(a) (b) (c) = (a) (b) (a) (b) (c) = (a) (b)
(In Millions)
Loans and receivables:
Cash and cash equivalents(a) P
=15,332 P
=89 P
=15,243 =16,359
P =89
P =16,270
P
Shortterm deposits 4,014 4,014 7,467 7,467
Restricted cash 3,321 3,321 3,303 3,303
Receivables 5,227 5,227 4,586 4,586
Due from related parties (current and noncurrent) 92 92 137 137
Deposits for LTIP(b) 46 46 373 373
Longterm cash and miscellaneous deposits(b) 832 832 408 408
AFS financial assets (c) 1,354 1,354 1,714 1,714
P
=30,218 P
=89 P
=30,129 =34,347
P =89
P =34,258
P
(a)
Excludes cash on hand amounting to =
P123.0 million and =P110.0 million as at December 31, 2016 and 2015, respectively.
(b)
Included under Other noncurrent assets account in the consolidated statements of financial position.
(c)
Excludes shares of stocks.
*SGVFS021831*
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As at December 31, 2016, the aging analysis of past due but not impaired financial assets is as follows:
Collectively
Neither Past Past Due but not Impaired and
Due nor 91120 Individually
Impaired <30 Days 3060 Days 6190 Days Days >120 Days Total Total Impaired Total
(In Millions)
=15,332 P
= P
= P
= P
= P
= P
= P
=15,332 P
= P
=15,332
Shortterm deposits 4,014 4,014 4,014
Restricted cash 3,321 3,321 3,321
Receivables:
Trade receivables 2,987 371 220 283 177 1,051 4,038 633 4,671
Advances to customers 112 112 112
Accrued interests receivables 46 46 46
Advances to other affiliates 94 94 94 12 106
Advances to officers and employees 106 106 106
Dividends receivable 79 79 79
Others 752 752 56 808
Due from related parties 92 92 92
AFS(b) 1,354 1,354 1,354
Deposits for LTIP(c) 46 46 46
Longterm cash and miscellaneous deposits(c) 832 832 832
P
=29,073 P
=371 P
=220 P
=283 P
= P
=271 P
=1,145 P
=30,218 P
=851 P
=31,069
*(a)
Excluding cash on hand.
(b)
Excluding shares of stocks.
(c)
Included under Other noncurrent assets account in the consolidated statement of financial position.
*SGVFS021831*
- 111 -
As at December 31, 2015, the aging analysis of past due but not impaired financial assets is as follows:
Collectively
Neither Past and
Due nor Past Due but not Impaired Individually
Impaired <30 Days 3060 Days 6190 Days 91120 Days >120 Days Total Total Impaired Total
(In Millions)
Cash and cash equivalents(a) =
P16,359 P
= P
= P
= P
= P
= P
= =
P16,359 P
= =
P16,359
Shortterm deposits 7,467 7,467 7,467
Restricted cash 3,303 3,303 3,303
Receivables:
Trade receivables 1,894 244 54 96 802 1,196 3,090 560 3,650
Advances to customers 233 233 233
Accrued interests receivables 58 58 58
Advances to other affiliates 91 91 91 12 103
Advances to officers and employees 82 82 82
Dividends receivable 280 280 280
Others 752 752 126 878
Due from related parties 137 137 137
AFS(b) 1,714 1,714 1,714
Deposits for LTIP 373 373 373
Longterm cash and miscellaneous deposits(c) 551 551 551
=
P33,203 =
P244 =
P54 =
P96 P
= =
P893 =
P1,287 =
P34,490 =
P848 =
P35,338
*(a)
(b)
(c)
*SGVFS021831*
- 112 -
The Company also assesses each financial asset based on its credit quality.
The table below shows the credit quality per class of financial assets of the Company that are
neither past due nor impaired.
2016
Standard Substandard
High Grade Grade Grade Total
(In Millions)
=15,332 P
= P
= P
=15,332
Shortterm deposits 4,014 4,014
Restricted cash 3,321 3,321
Receivables:
Trade receivables 2,663 153 171 2,987
Accrued interests receivables 46 46
Dividends receivable 79 79
Others 752 752
Deposits for LTIP(b) 46 46
Due from related parties 92 92
Miscellaneous deposits(b) 512 320 832
AFS financial assets (c) 1,354 1,354
P
=28,429 P
=473 P
=171 P
=29,073
(a)
(b)
(c)
2015
Standard Substandard
High Grade Grade Grade Total
(In Millions)
=16,359 =
P =
P P
=16,359
Receivables:
Trade receivables 1,611 161 122 1,894
Accrued interests receivables 58 58
Dividends receivable 280 280
Others 752 752
Deposit for LTIP (b) 373 373
Miscellaneous deposits(c) 174 234 408
AFS financial assets (d) 1,714 1,714
P
=32,543 P
=395 P
=122 P
=33,060
(a)
(b )
Included under Other current assets account in the consolidated statement of financial position.
(c)
(d)
Cash and cash equivalents and sinking fund are classified as high grade since these are placed with
reputable local and international banks, which meet the standards set by the Companys Board.
*SGVFS021831*
- 113 -
For the Companys other financial assets, high grade relate to those financial assets which are
consistently collected before the maturity date. In addition, these are financial assets from
counterparties that also have corresponding collectibles from the Company for certain contracted
services. The first layer of security comes from the Companys ability to offset amounts
receivable from those counterparties against payments due to them. Standard grade include
financial assets that are collected on their due dates even without an effort from the Company to
follow them up. Substandard grade relates to financial assets that are collected on their due dates
provided that the Company made a persistent effort to collect them.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations
associated with financial liabilities. The Companys objective is to maintain a balance between
continuity of funding and flexibility through the use of bank loans and facilities.
The Company monitors its cash position using a cash forecasting system. All expected
collections, check disbursements and other cash payments are determined daily to arrive at the
projected cash position to cover its obligations and to ensure that obligations are met as they fall
due. The Company monitors its cash flow position, particularly the collections from receivables,
receipts of dividends and the funding requirements of operations, to ensure an adequate balance of
inflows and outflows. The Company also has online facilities with its depository banks wherein
bank balances are monitored daily to determine the Companys actual cash balances at any time.
The Companys liquidity and funding management process include the following:
Managing the concentration and profile of debt maturities;
Maintaining debt financing plans; and
Monitoring liquidity ratios against internal and regulatory requirements.
Liquidity risk concentrations arise when a number of economic features would cause the
Companys ability to meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. The Company has a total cash and cash equivalents and
shortterm deposits, amounting to P =19,468.5 million and =
P23,935.7 million as at
December 31, 2016 and 2015, respectively that are allocated to meet the Companys shortterm
liquidity needs.
The table below summarizes the maturity profile of the Companys financial assets and liabilities
as at December 31, 2016 and 2015 based on undiscounted contractual payments.
2016
Within More than
On Demand 1 Year 12 Years 23 Years 34 Years 4 Years Total
(In Millions)
Financial Assets
=3,572 P
=11,760 P
= P
= P
= P
= P
=15,332
Receivables 2,311 2,916 5,227
Beacon Electric preferred shares (b) 20,622 20,622
AFS financial assets (c) 250 61 270 815 1,396
Cash and miscellaneous deposits(d) 878 878
5,883 18,782 1,128 61 270 21,437 47,561
Financial Liabilities
Accrued expenses 3,092 3,092
Accrued construction costs 4,279 4,279
Trade payables 1,914 1,914
Accounts payable 2,669 2,669
(Forward)
*SGVFS021831*
- 114 -
2016
Within More than
(In Millions)
Interest and other financing charges P
= P
=876 P
= P
= P
= P
= P
=876
Dividends payable 11 11
Retention payable 457 457
Other current liabilities 431 431
Due to related parties 8,439 8,439
Payable to CHI 163 163
Customers guaranty deposits(f) 938 938
Concession fees payable 1,271 1,251 1,319 5,863 44,101 53,805
Financial liability 36 45 55 136
Longterm debts(g) 9,462 13,196 10,085 11,721 85,891 130,355
33,100 14,492 11,459 17,584 130,930 207,565
Liquidity gap P
=5,883 (P
=14,318) (P
=13,364) (P
=11,398) (P
=17,314) (P
=109,493) (P
=160,004)
2015
Within More than
(In Millions)
Financial Assets
Cash and cash equivalents(a) =
P3,299 =
P13,060 =
P =
P =
P =
P =
P16,359
Receivables 2,039 2,547 4,586
Beacon Electric preferred shares (b) 11,573 11,573
AFS financial assets (c) 257 552 376 869 2,054
Cash and miscellaneous deposits(d) 373 408 781
5,338 23,841 960 376 12,442 42,957
Accrued expenses(e) 3,216 3,216
Accrued construction costs 3,125 3,125
Trade payables(e) 2,989 2,989
Accounts payable 1,904 1,904
Interest and other financing charges 743 743
Dividends payable 424 424
Retention payable 272 272
Other current liabilities(e) 263 263
Payable to CHI 163 163
Customers guaranty deposits(f) 857 857
Concession fees payable 2,420 1,187 1,204 1,272 41,660 47,743
Financial liability 27 36 45 55 163
Longterm debts(g) 9,280 8,282 12,261 9,326 80,567 119,716
33,376 9,505 13,510 10,653 123,084 190,128
Liquidity gap =
P5,338 (P
=9,535) (P
=8,545) (P
=13,510) (P
=10,277) (P
=110,642) (P
=147,171)
(a)
(b)
Included in Investments and advances account in the consolidated statement of financial position.
(c)
Excluding shares of stocks but including interest to be received on investments in bonds.
(d)
Included under Other Current assets and Other Noncurrent assets accounts in the consolidated statement of financial position.
(e)
Excluding statutory payables.
(f)
Included under Other longterm liabilities account in the consolidated statement of financial position.
(g)
Including contractual interest payments.
Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. As at December 31, 2016 and 2015, the
Company is subject to fair value and cash flow interest rate risks. Fixed rate financial instruments
measured at fair value are subject to fair value interest rate risk while floating rate financial
instruments are subject to cash flow interest rate risk.
The Companys exposure to interest rate risk relates primarily to longterm debt obligations that
bear floating interest rate. The Company generally mitigates risk of changes in market interest
rates by constantly monitoring fluctuations of interest rates and maintaining a mix of fixed and
floating interestbearing loans. Specific interest rate risk policies are as follows:
MPIC. The loans of the the Parent Company are fixedrate loans and are denominated in
local currency. Certain of MPICs loans bear a fixed rate for the first five years and is subject
to an interest rate repricing on the fifth year. Should the interest rate on the repricing date be
significantly higher than the current fixed rate, the Company has an option to prepay or
refinance the loan starting on the fifth year at every interest payment date.
*SGVFS021831*
- 115 -
Water. Maynilads exposure to interest rate risk relates primarily to its interestbearing loans.
Maynilad maintains a mix of floating and fixed rate loans, currently at a ratio of 12% floating
and 88% fixed. The floating rate interestbearing loans will increase to a higher portion over
time because of future drawdowns in connection to the MWMP loan agreement.
Toll operations. The debt of the entities in this group are significantly fixedrate loans,
effectively locking in the interest rate in order to reduce exposure to interest rate fluctuations.
92% of the financial instruments are in local currency loans. Interest rate exposure is now
limited to changes in Thailands Minimum Lending Rate less 1.5% for the Thai Baht debt.
Rail. LRMCs debt bears a fixed rate for the first five years and is subject to an interest rate
repricing every five years thereafter. Should the interest rate on the repricing date be
significantly higher than the current fixed rate, LRMC has an option to prepay or refinance the
loan starting after five years from March 6, 2016, the initial drawdown date.
The following tables set out the carrying amount, classified by maturity, of the Companys
interestbearing financial assets and financial liabilities that are subject to interest rate risk.
Interest on financial instruments classified as floating rate is repriced either semiannually or
quarterly on each interest payment date. Interest on financial instruments classified as fixed rate is
fixed until the maturity of the instrument with an exception for the certain borrowings which are
subject to repricing as discussed above. The other financial instruments of the Company that are
not included in the table below are noninterest bearing and are therefore not subject to interest
rate risk.
US DollarDenominated Financial Assets and Financial Liabilities
December 31, 2016

Within More than
Interest Rate On Demand 1 Year 23 Years 45 Years 5 Years Total
(In Millions)
Cash and cash equivalents $2 $ $ $ $ $2
Restricted cash 5 5
$7 $ $ $ $ $7
Floating rate loans:
MWMP Worldbank Loan Floating rate
benchmark
+1.25% spread $ $ $2 $8 $58 $68
International Finance LIBOR+IPA (1%
CorporationSubordinated 2% of EBITDA) 1 1
$ $1 $2 $8 $58 $69
December 31, 2015

Within More than
(In Millions)
Cash and cash equivalents $3 $ $ $ $ $3
Restricted cash 6 6
$9 $ $ $ $ $9
MWMP Worldbank Loan Floating rate
benchmark
+1.25% spread $ $ $ $4 $39 $43
International Finance LIBOR+IPA (1%
CorporationSubordinated 2% of EBITDA) 1 1
$ $ $1 $4 $39 $44
*SGVFS021831*
- 116 -
Thai BahtDenominated Financial Assets and Financial Liabilities
December 31, 2016

Within More than
(In Millions)
Cash and cash equivalents THB1 THB THB THB THB THB1
THB42 THB THB THB THB THB42
Floating rate loans
Thanachart Term Loan Minimum Lending
Rate less 1.5% THB THB231 THB666 THB614 THB THB1,511
December 31, 2015

Within More than
(In Millions)
Cash and cash equivalents THB2 THB THB THB THB THB2
THB52 THB THB THB THB THB52
Floating rate loans
Thanachart Term Loan Minimum Lending
Rate less 1.5% THB THB160 THB550 THB770 THB358 THB1,838
PesoDenominated Financial Assets and Financial Liabilities

December 31, 2016
Within More than
(In Millions)
Cash and cash equivalents 0.25%6.0% P
= 3,484 P
= 15,773 =
P =
P =
P P
= 19,257
Investment in bonds and
corporate notes 2.13%6% 307 523 523 1,353
P
= 3,484 P
= 15,773 P
= 307 P
= 523 P
= 523 P
= 20,610

BDO Bank Loan 2% p.a +PDSTF
rate ;prevailing
market interest
rates =
P =
P2 =
P3 =
P2 =
P =
P7
December 31, 2015

Within More than
(In Millions)
Cash and cash equivalents 0.25%6.0% P
=3,152 =
P20,527 =
P =
P =
P =
P23,679
Investment in bonds and
corporate notes 2.13%6% 201 434 304 775 1,714
P
=3,152 =
P20,728 P
=434 P
=304 P
=775 =
P25,393

BDO Bank Loan 2% p.a +PDSTF
rate ;prevailing
market interest
rates =
P P
=24 P
=43 P
=46 P
=10 P
=123
*SGVFS021831*
- 117 -
The following table demonstrates the sensitivity of income before income tax arising from
changes in interest cash flows of floating rate loans and fair values of AFS financial assets,
respectively, due to changes in Philippine Peso, US Dollar and Thain Baht interest rates with all
other variables held constant. The estimates in the movement of interest rates were based on the
managements annual financial forecast. There is no other impact on equity other than those
already affecting the consolidated statement of comprehensive income.
Increase/Decrease Effect on Income

in Basis Points Before Income Tax
(In Millions)
2016 +50 (P
=28)
50 28
2015 +50 (23)
50 23
There were no outstanding derivative transactions as at December 31, 2016 and 2015.
Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates. As at December 31, 2016 and 2015,
the Companys foreign currency risk results primarily from movements of the Philippine Peso
against US Dollar, Thai Baht, Euro and Japanese Yen.
In general, the Companys exposure to foreign currency risk is minimal as significantly all of the
transactions are denominated in Philippine Peso. Exposure to foreign currency risk primarily
results from the following foreign currency transactions:
Water. The servicing of foreign currencydenominated loans of MWSS is among the

requirements of Maynilads concession agreement. Majority of the revenues are generated in
Philippine Peso. However, there is a mechanism in place as part of the concession agreement
wherein Maynilad (or the end consumers) can recover foreign currency fluctuations through
the FCDA that is approved by the RO.
Toll Operations. The segments exposure to foreign exchange currency risk relates mainly to
CICs dollar denominated Series 20101 Notes amounting to $13.0 million (P =658.0 million)
as at December 31, 2016. The segments practice is to refinance outstanding U.S. dollar loans
with peso loans to reduce the exposure to foreign currency risk.
Payment for AIFs loan which is denominated in Thai Baht is to be sourced from the
dividends, also denominated in Thai Baht, to be declared by DMT (see Notes 11 and 19).
Healthcare. Of the entities in the healthcare segment, AHI has foreign currency risk arising
from its cash and cash equivalents, international insurance included under receivables and US
dollar denominated loan exposure. AHI also has transactional currency exposures arising
from purchases of medical equipment or supplies in currencies other than the Philippine Peso.
AHI is unable to take on any derivative transaction to hedge these exposures since its loan
covenants do not allow it. AHI relies on its ability to generate dollarbased revenue from its
foreign patients to mitigate this risk.
*SGVFS021831*
- 118 -
Rail. LRMCs exposure to foreign currency risk is minimal and only limited to transactional
currency exposures arising from payments to suppliers and contractors. To reduce to foreign
currency risk exposure, LRMC entered into series fo derivative transactions, in particular,
forward contracts. These are accounted for as derivatives not designated as accounting hedges
with fair value of =
P2.5 million and =
P1.4 million as at December 31, 2016 and 2015.
The Companys foreign currencydenominated financial assets and liabilities as at December 31:
2016 2015
US Dollar Thai Baht JPY US Dollar Euro JPY
(In Millions)
Assets:
Cash and cash equivalents $2 THB1 $3 THB 2
Restricted cash 5 41 6 50
Receivables
7 42 9 52
Liabilities:
Service concession fees payable (77) (404) (85) (1,229)
Longterm debts (82) (1,511) (59) (1,802)
(159) (1,511) (404) (144) (1,802) (1,229)
Net foreign currency -denominated
liabilities ($152) (THB1,469) (404) ($135) (THB 1,750) (1,229)
The following table demonstrates sensitivity of cash flows due to changes in foreign exchange
rates with all variables held constant. The estimates in the movement of the foreign exchange
rates were based on the managements annual financial forecast.
Increase/Decrease Foreign Effect on Income

in Foreign Exchange Rates Exchange Rate Before Income Tax
(In Millions)
2016
US Dollar +5% 49.72 (P
=378)
THB +5% 1.38 (102)
JPY +5% 0.43 (9)
US Dollar 5% 49.72 378
THB 5% 1.38 102
JPY 5% 0.43 9
2015
US Dollar +5% 47.06 (P
=318)
THB +5% 1.30 (114)
JPY +5% 0.39 (24)
US Dollar 5% 47.06 318
THB 5% 1.30 114
JPY 5% 0.39 24
Capital Management
Capital includes preferred shares and equity attributable to the equity holders of the Parent
Company. The primary objective of the Companys capital management policies is to ensure that
the Company maintains a strong statement of financial position and healthy capital ratios in order
to support its business and maximize shareholder value. The Company ensures that it is compliant
with all debt covenants not only at the consolidated level but also at the level of Parent Company
and each of its subsidiaries.
*SGVFS021831*
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In general, the Company closely monitors its debt covenants and maintains a capital expenditure
program and dividend declaration policy that keeps the compliance of these covenants into
consideration.
The following debt covenants are being complied with by the Company as part of maintaining a
strong credit rating with its creditors:
MPIC. MPICs loan agreements require achievement of certain financial ratios (see Note 19).
Moreover, under the loan agreements, MPIC needs to achieve a DSCR of 1.5x (for the Note)
and 1.3x (for the =P 25.0 Billion Facility and the =
P 10.0 Billion Facility from BDO Unibank,
Inc.) to be able to declare dividends. As at December 31, 2016 and 2015, MPIC is in
compliance with the required financial ratios and other loan covenants.
Water. Maynilad closely manages its capital structure visavis a certain target gearing ratio,
which is net debt divided by total capital plus net debt. Maynilads target gearing ratio is
75%. This target is to be maintained over the next five years by managing the level of
borrowings and dividend payments to shareholders.
For purposes of computing its net debt, Maynilad includes the outstanding balance of its long-
term interest-bearing loans, service concession obligation payable to MWSS and trade and
other payables, less the outstanding cash and cash equivalents, short-term investments,
deposits and sinking fund. To compute its capital, Maynilad uses net equity. Maynilad
closely monitors its debt covenants and maintains a capital expenditure program and dividend
declaration policy that keeps the compliance of these covenants into consideration. Under the
loan agreement, debt-to-equity ratio should not exceed 2.33 times and DSCR should be at a
minimum of 1.20 times. Maynilad is in compliance with the required financial ratios and
other loan covenants as at December 31, 2016 and 2015.
Toll Operations. Under the loan agreements, NLEX Corp is required a maintenance DSCR of
not less than 1.15 times and maintain a debt-to-equity ratio not exceeding 3.0 times for the
first three years after the date of the loan agreement and not exceeding 2.5 times after such
period. The loan agreements provide that NLEX Corp may incur new loans or declare
dividends as long as the Pro-forma DSCR for the relevant year is not less than 1.30 times.
NLEX Corp also ensures that its debt-to-equity ratio is in line with the requirements of the
BOI. BOI requires the NLEX Corp to comply with a 75:25 debt-to-equity ratio as proof of
capital build-up. NLEX Corp is in compliance with the required financial ratios and other
loan covenants.
In relation to CICs loan agreement relating to the Series 20101 Dollardenominated Notes,
CIC shall not pay any dividends or make any other distribution in respect of its share capital
following these events: (1) early amortization, cash trapping and repurchase events as
indicated in the terms of the Notes; (2) failure to fully fund the transaction account; (3) while
the construction of CAVITEX is not yet complete; (4) while the Notes have not commenced to
amortize. CIC has not paid any dividends in 2016 and 2015. Other than restrictions as to
dividend distribution, CIC is not subject to other externally imposed capital requirements.
Under the Amended and Restated Omnibus Agreement for the RCBC/BDO loan, CIC is
required to maintain a DSCR of at least 1.05 times at all times until full payment of the long-
term debt and at least 1.20 times for declaration of dividends and other distributions. CIC
shall also maintain a maximum debt-to-equity ratio of 3.0 times at all times until full payment
of the long-term debt.
*SGVFS021831*
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The Company manages its capital structure and adjust it in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may obtain additional
advances from shareholders, return capital to shareholders, issue new shares or issue new debt or
redemption of existing debt. No changes were made in the objectives, policies or processes during
the years ended December 31, 2016 and 2015. The Company monitors capital on the basis of
debt-to-equity ratio. Debt-to-equity ratio is calculated as long-term debt over equity. The
Companys goal is to maintain a sustainable debt-to-equity ratio. The debt-to-equity ratio as at
December 31, 2016 and 2015 are:
2016 2015
(In Millions)
Longterm debt (a) P
=97,016 P87,582
=
Equity (b) 188,081 150,776
Debttoequity ratio (a/b) 52% 58%
36. Financial Instruments Categories and Derivatives
Categories of Financial Instruments

The categories of the Companys financial assets and financial liabilities as at December 31, 2016
and 2015 are:
2016
Financial
Financial Assets Liabilities
AFS Other
Loans and Financial Financial
FVPL Receivables Assets Liabilities Total
(In Millions)
ASSETS
Cash and cash equivalents P
= P
= 15,332 P
= P
= P
= 15,332
Receivables - net 5,227 5,227
Derivative assets
AFS financial assets:
Investment in bonds 1,353 1,353
Investment in UITF 972 972
Investment in equity 510 510
Deposits for LTIP 46 46
Equity method investees (a) 612 20,622 21,234
P
= P
= 28,504 P
= 23,457 P
= P
= 51,961
LIABILITIES
Accounts payable and other
current liabilities (b) P
= P
= P
= P
= 13,892 P
= 13,892
Service concession fees payable 28,874 28,874
Longterm debt 97,016 97,016
Deferred credits and other longterm
liabilities 1,108 1,108
P
= P
= P
= P
= 149,329 P
= 149,329
(a)
Includes advances to Beacon Electric and investment in preferred shares of Beacon Electric classified as AFS financial assets.
(b)
Excludes statutory payables
*SGVFS021831*
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2015
Financial
Financial Assets Liabilities
AFS Other
Loans and Financial Financial
FVPL Receivables Assets Liabilities Total
(In Millions)
ASSETS
Cash and cash equivalents =
P P
=16,359 =
P =
P P
=16,359
Receivables - net 4,586 4,586
Derivative assets
AFS financial assets:
Investment in bonds 1,714 1,714
Investment in UITF 1,378 1,378
Investment in equity 539 539
Other current assets 373 373
Equity method investees (a) 756 11,573 12,329
=
P P
=32,011 P
=15,204 =
P P
=47,215
LIABILITIES
Accounts payable and other
current liabilities (b) =
P =
P =
P P
=13,099 P
=13,099
Service concession fees payable 25,753 25,753
Longterm debt 87,582 87,582
Deferred credits and other longterm
liabilities 1,050 1,050
=
P =
P =
P P
=136,034 P
=136,034
(a)
Includes advances to Beacon Electric and investment in preferred shares of Beacon Electric classified as AFS financial assets.
(b)
Excludes statutory payables
Derivative Financial Instruments

The Company has no freestanding derivatives and no derivatives accounted for as cash flow
hedges as at December 31, 2016 and 2015.
37. Fair Value Measurement
The fair value of the assets and liabilities is determined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between participants at the
measurement date. The following tables summarize the carrying amounts and fair values of the
assets and liabilities, analyzed among those whose fair value is based on:
Level 1 Quoted market prices in active markets for identical assets or liabilities
Level 2 Those involving inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from
prices); and
Level 3 Those with inputs for the asset or liability that are not based on observable market
data (unobservable input).
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As discussed in Notes 10 and 36, the unlisted shares of stock are carried at cost in the consolidated
statement of financial position since there are no reliable bases to determine subsequent fair value.
As at December 31, 2016 and 2015, there were no financial instruments carried at fair value that
were classified under Level 3.
2016
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
(In Millions)
Assets measured at fair value
AFS Financial Assets (see Note 10):
Shares of stock P
= 510 P
= 19 P
= 491 P
= P
= 510
Unit Investment Trust Fund 972 972 972
Investment in bonds and treasury notes 1,354 818 536 1,354
P
= 2,836 P
= 837 P
= 1,999 P
= P
= 2,836
Assets for which fair values are disclosed

Loans and Receivables:
Notes receivables (see Note 8) P
= P
= P
= P
= P
=
Miscellaneous deposits (see Note 15) 832 782 782
P
= 832 P
= P
= P
= 782 P
= 782
Liabilities for which fair values are disclosed

Other financial liabilities:
Service concession fees payable
(current and noncurrent) P
= 28,874 P
= P
= P
= 30,265 P
= 30,265
Longterm debts (current and noncurrent) 97,016 97,613 97,613
Due to related parties 8,439 8,380 8,380
Customer guaranty deposit 938 971 971
P
= 135,267 P
= P
= P
= 137,229 P
= 137,229
2015
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
(In Millions)
Assets measured at fair value
AFS Financial Assets (see Note 10):
Shares of stock P
=539 =
P18 P
=521 =
P P
=539
Unit Investment Trust Fund 1,378 1,378 1,378
Investment in bonds and treasury notes 1,714 1,513 201 1,714
P
=3,631 P
=1,531 P
=2,100 =
P P
=3,631
Assets for which fair values are disclosed

Loans and Receivables:
Notes receivables (see Note 8) =
P =
P =
P =
P =
P
Miscellaneous deposits (see Note 15) 408 361 361
P
=408 =
P =
P P
=361 P
=361
Liabilities for which fair values are disclosed

Other financial liabilities:
Refundable deposits =
P =
P =
P =
P =
P
Service concession fees payable
(current and noncurrent) 25,753 27,327 27,327
Longterm debts (current and noncurrent) 87,582 90,282 90,282
Due to related parties 8,550 8,545 8,545
Customer guaranty deposit 857 884 884
P
=122,742 =
P =
P P
=127,038 P
=127,038
During the years ended December 31, 2016 and 2015, portions of the investment in treasury bonds
and notes amounting to =
P535.2 million and =
P200.6 million was transferred from Level 1 to
Level 2. These investments were proven to be inactively traded due to the lower average daily
trading volume in December 2016 and 2015, as well as no availability of bid-offer on value date.
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The following methods and assumptions were used to measure the fair value of each class of
assets and liabilites for which it is practicable to estimate such value:
Levels 1 and 2 Fair Value Hierarchy
Cash and Cash Equivalents. Due to the shortterm nature of transactions, the fair value of cash
and cash equivalents approximate the carrying amounts at the end of the reporting period.
Restricted Cash, Cash Deposits, and Accounts Payable and Other Current Liabilities. Carrying
values approximate the fair values at the reporting date due to the shortterm nature of the
transactions.
Investments in UITF. A UITF uses the marktomarket method in valuing the funds securities. It
is a valuation method which calculates the Net Asset Value (NAV) based on the estimated fair
market value of the assets of the fund based on prices supplied by independent sources.
Due from Related Parties. In 2016 and 2015, fair value of due from related parties approximates
their carrying amounts as these are expected to be settled within a year from the consolidated
statement of financial position date.
Refundable Deposits. The fair value of the refundable occupancy deposits is determined by
discounting the deposit using the prevailing market rate of interest. The effective annual rate used
in 2016 and 2015 is 3.58% and 3.27%, respectively.
Service Concession Fees Payable and Customers Guaranty Deposits. Estimated fair value is
based on the discounted value of future cash flows using the applicable rates for similar types of
financial instruments.
Notes Receivable and Miscellaneous Deposits. Estimated fair value is based on the present value
of future cash flows discounted using the prevailing PDST-F rates that are specific to the tenor of
the instruments cash flows at the end of each reporting period with credit spread adjustment.
Long-term Debt. For both fixed rate and floating rate (repriceable every six months)
US dollar-denominated debts and Philippine Peso-denominated fixed rate corporate notes,
estimated fair value is based on the discounted value of future cash flows using the prevailing
credit adjusted US risk-free rates and Philippine risk free rates that are adjusted for credit spread
ranging from 3.0% to 10.1% and 2.4% to 10.0% in 2016 and 2015, respectively.
38. Supplemental Cash Flow Information
The following table shows the Companys significant noncash investing and financing activities
and corresponding transaction amounts:
2016 2015 2014

(In Millions)
Additions to service concession assets and concession
fees payable pertainining to present value of
concession fees and capitalized interest accretion
(see Notes 13 and 18) P
=3,374 P
=18,182 =
P
(Forward)
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2016 2015 2014

(In Millions)
Settlement of unpaid portion of the purchase costs of
MERALCO shares acquired in 2015 by way of off-
setting against common and preferred dividends
received from Beacon Electric (see Note 21) P
=4,243 =
P =
P
Unpaid portion of the purchase costs for Beacon
Electric preferred and common shares acquired in
2016 (see Notes 11 and 21) 8,353
MWSS loan drawdown for Angat Water Transmission
Improvement Project (see Notes 13 and 18) 92
Unpaid portion of the purchase costs for MERALCO
shares acquired in 2015 (see Notes 11 and 21) 8,450
Payment of amount due to Beacon Electric by way of
offsetting against dividend receivable 2,139 4,450
Addition to service concession assets due to effect
of change in rebased rate (Note 13) 632
Unpaid Maynilads concession fees (see Note 13) 500
Unpaid subscription payable 203
39. Events after the Reporting Period
Aside from those disclosed in Note 32 (status of certain contingencies) and Note 22 (MPICs
dividend declaration on March 1, 2017), events occurring after the reporting period include:
Acquisition of Assets that Qualify as Business. In January 2017, PremierLogistics, Inc. (Premier),
a subsidiary of MPIC, entered into a definitive agreement to acquire certain assets and business of
Ace Logistics, Inc. (Ace) for an aggregate purchase price of P
=280.0 million.
The transaction will be carried out through an asset purchase agreement. The closing of the
transaction is subject to the satisfaction of certain conditions precedent, which as of March 1, 2017
has not been completed but the parties intend to fulfill within the first quarter of 2017. The
conditions precedent include, among others, the sale by Ace of identified logistics assets, the
novation of certain key contracts of Ace with its clients, and the transfer of certain key officers and
employees of Ace to Premier. An initial payment shall be delivered to Ace on the closing of the
transaction. The controlling shareholder of Ace will likewise acquire a 10% interest in Premier
after the closing of the transaction.
Ace is engaged in the business of logistics, including warehousing, courier express and parcel
delivery, e-commerce delivery, trucking, freight forwarding, customs brokerage and domestic
shipping. Ace also has a strong presence in pre-delivery inspection in the automotive industry,
which Premier intends to expand. The assets and business that will be acquired in the transaction
will be utilized to further expand MPICs logistics business.
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Acquisition of Delgado Clinic Inc. (DCI). On January 31, 2017, MPHHI completed agreement to
infuse approximately = P133.5 million of cash into DCI, owner and operator of the Dr. Jesus C.
Delgado Memorial Hospital (JDMH) via a subscription to preferred shares representing
approximately 65% of the total expanded capital stock of DCI. The cash infusion from MPHHI
will enable JDMH to upgrade its equipment and facilities, and expand its capacity. The
acquisition shall be accounted for using the acquisition method. The provisional fair values of the
identifiable assets and liabilities as at the date of acquisition:
Provisional
Values
(In Millions)
Assets
Cash =144
P
Inventories and other current assets 21
Property and equipment 138
312
Liabilities
Accounts payable and other current liabilities 29
Loans payable 4
Deferred tax liability 39
Other noncurrent liabilities 35
107
Total identifiable net assets at fair value 205
Non-controlling interest (35% at MPHHI level) (72)
Goodwill arising on acquisition
Consideration transferred =133
P
MERALCOs Dividend Declaration. On February 27, 2017, the BOD of MERALCO approved
the declaration of cash dividends of =
P9.30 a share to all shareholders of record as at
March 27, 2017, payable on April 21, 2017. This consists of a final regular cash dividend of
P
=4.08 per share and a special cash dividend of =
P5.22 per share. Dividends receivable by MPIC on
its 15% direct interest in MERALCO is estimated at = P1,572.3 million.
40. Significant Accounting Policies
Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year, except for
the adoption of new and amended PFRS effective January 1, 2016. Except for additional
disclosure requirements and otherwise indicated, adoption of the following standards did not have
any material impact on the Companys financial position or performance:
Amendments to PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets
Clarification of Acceptable Methods of Depreciation and Amortization The amendments
clarify the principle in PAS 16 and PAS 38 that revenue reflects a pattern of economic
benefits that are generated from operating a business (of which the asset is part) rather than the
economic benefits that are consumed through use of the asset. As a result, a revenuebased
method cannot be used to depreciate property, plant and equipment and may only be used in
very limited circumstances to amortize intangible assets. The Company does not use revenue-
based method in depreciating property and equipment and in amortizing service concession
assets and other intangible assets.
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Amendments to PAS 16, Property, Plant and Equipment, and PAS 41, Agriculture Bearer
Plants The amendments change the accounting requirements for biological assets that meet
the definition of bearer plants. Under these amendments, biological assets that meet the
definition of bearer plants will no longer be within the scope of PAS 41. Instead, PAS 16 will
apply. After initial recognition, bearer plants will be measured under PAS 16 at accumulated
cost (before maturity) and using either the cost model or revaluation model (after maturity).
These amendments also require that produce that grows on bearer plants will remain in the
scope of PAS 41 measured at fair value less costs to sell. For government grants related to
bearer plants, PAS 20, Accounting for Government Grants and Disclosure of Government
Assistance, will apply. The amendments are not relevant to the Company.
Amendments to PAS 27, Separate Financial Statements Equity Method in Separate

Financial Statements The amendments will allow entities to use the equity method to
account for investments in subsidiaries, joint ventures and associates in their separate financial
statements. Entities already applying PFRS and electing to change to the equity method in its
separate financial statements will have to apply that change retrospectively. The amendments
are relevant to the stand-alone financial statements and therefore not relevant to the
Companys consolidated financial statements.
Amendments to PFRS 10, Consolidated Financial Statements, PFRS 12, Disclosure of

Interests in Other Entities, and PAS 28, Investments in Associates and Joint Ventures
Investment Entities: Applying the Consolidation Exception These amendments clarify that
the exemption in PFRS 10 from presenting consolidated financial statements applies to a
parent entity that is a subsidiary of an investment entity that measures all of its subsidiaries at
fair value and that only a subsidiary of an investment entity that is not an investment entity
itself and that provides support services to the investment entity parent is consolidated. The
amendments also allow an investor (that is not an investment entity and has an investment
entity associate or joint venture), when applying the equity method, to retain the fair value
measurements applied by the investment entity associate or joint venture to its interests in
subsidiaries. These amendments are not applicable to the Company since none of the entities
within the group is an investment entity nor does the group have investment entity.
PFRS 11, Joint Arrangements Accounting for Acquisitions of Interest in Joint Operations
The amendments to PFRS 11 require that a joint operator accounting for the acquisition of an
interest in a joint operation, in which the activity of the joint operation constitutes a business
must apply the relevant PFRS 3 principles for business combinations accounting. The
amendments also clarify that a previously held interest in a joint operation is not remeasured
on the acquisition of an additional interest in the same joint operation while joint control is
retained. In addition, a scope exclusion has been added to PFRS 11 to specify that the
amendments do not apply when the parties sharing joint control, including the reporting entity,
are under common control of the same ultimate controlling party. The amendments apply to
both the acquisition of the initial interest in a joint operation and the acquisition of any
additional interests in the same joint operation. The amendments did not have any impact on
the Companys financial statements.
PFRS 14, Regulatory Deferral Accounts PFRS 14 is an optional standard that allows an
entity, whose activities are subject to rate-regulation, to continue applying most of its existing
accounting policies for regulatory deferral account balances upon its first-time adoption of
PFRS. Entities that adopt PFRS 14 must present the regulatory deferral accounts as separate
line items on the statement of financial position and present movements in these account
balances as separate line items in the statement of profit or loss and other comprehensive
*SGVFS021831*
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income. The standard requires disclosures on the nature of, and risks associated with, the
entity's rate-regulation and the effects of that rate-regulation on its financial statements. Since
the Company is an existing PFRS preparer, this standard is not relevant.
PAS 1, Presentation of Financial Statements Disclosure Initiative (Amendments) The

amendments are intended to assist entities in applying judgment when meeting the
presentation and disclosure requirements in PFRS. They clarify the following:
That entities shall not reduce the understandability of their financial statements by
either obscuring material information with immaterial information; or aggregating
material items that have different natures of functions
That specific line items in the statement of income and OCI and the statement of
financial position may be disaggregated
That entities have flexibility as to the order in which they represent the notes to
financial statements
That the share of OCI of associate and joint ventures accounted for using the equity
method must be presented in aggregate as a single line item, and classified between
those items that will or will not be subsequently reclassified to profit or loss.
Annual Improvements to PFRSs (2012-2014 cycle). The following improvements did not have
material impact on the Company:
PFRS 5, Non-current Assets Held for Sale and Discontinued Operations Changes in
Methods of Disposal. The amendment is applied prospectively and clarifies that
changing from a disposal through sale to a disposal through distribution to owners and
vice-versa should not be considered to be a new plan of disposal, rather it is a
continuation of the original plan. There is, therefore, no interruption of the
application of the requirements in PFRS 5. The amendment also clarifies that
changing the disposal method does not change the date of classification.
PFRS 7, Financial Instruments: Disclosures Servicing Contracts. PFRS 7 requires

an entity to provide disclosures for any continuing involvement in a transferred asset
that is derecognized in its entirety. The amendment clarifies that a servicing contract
that includes a fee can constitute continuing involvement in a financial asset. An
entity must assess the nature of the fee and arrangement against the guidance in
PFRS 7 in order to assess whether the disclosures are required. The amendment is to
be applied such that the assessment of which servicing contracts constitute continuing
involvement will need to be done retrospectively.
PFRS 7 Applicability of the Amendments to PFRS 7 to Condensed Interim Financial

Statements. The amendment is applied retrospectively and clarifies that the disclosures
on offsetting of financial assets and financial liabilities are not required in the
condensed interim financial report unless they provide a significant update to the
information reported in the most recent annual report.
PAS 19, Employee Benefits Regional Market Issue Regarding Discount Rate. The
amendment is applied prospectively and clarifies that market depth of high quality
corporate bonds is assessed based on the currency in which the obligation is
denominated, rather than the country where the obligation is located. When there is
no deep market for high quality corporate bonds in that currency, government bond
rates must be used.
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PAS 34, Interim Financial Reporting Disclosure of Information 'Elsewhere in the

Interim Financial Report'. The amendment is applied retrospectively and clarifies that
the required interim disclosures must either be in the interim financial statements or
incorporated by cross-reference between the interim financial statements and
wherever they are included within the greater interim financial report (e.g., in the
management commentary or risk report).
The principal accounting and financial reporting policies adopted in preparing the Companys
consolidated financial statements are as follows:
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 NCI in the acquiree. For each business combination, the Company
elects whether to measure the NCIs in the acquiree at fair value or at the proportionate share of the
acquirees identifiable net assets. Acquisition costs incurred are expensed and included in general
and administrative expenses.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as of the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is
re-measured at its acquisition date fair value and any resulting gain or loss is recognized in profit
or loss. It is then considered in the determination of goodwill.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at
the acquisition date. Contingent consideration classified as an asset or liability that is a financial
instrument and within the scope of PAS 39, Financial Instruments: Recognition and
Measurement, is measured at fair value with changes in fair value recognized 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 is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for NCI, and any previous interest held, over the net
identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in
excess of the aggregate consideration transferred, the Company re-assesses 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 immediately 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 Companys cash-generating units (CGUs) that are
expected to benefit from the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.
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Where goodwill has been allocated to a CGU and part of the operation within that unit is disposed
of, the goodwill associated with the disposed operation is included in the carrying amount of the
operation when determining the gain or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative values of the disposed operation and the portion
of the CGU retained.
If the initial accounting for business combination can be determined only provisionally by the end
of the period by which the combination is effected because the fair values to be assigned to the
acquirees identifiable assets and liabilities can be determined only provisionally, the Company
accounts for the combination using provisional values. Adjustments to those provisional values as
a result of completing the initial accounting shall be made within twelve (12) months from the
acquisition date. The carrying amount of an identifiable asset, liability or contingent liability that
is recognized as a result of completing the initial accounting shall be calculated as if its fair value
at the acquisition date had been recognized from that date. Goodwill or any gain recognized shall
be adjusted from the acquisition date by an amount equal to the adjustment to the fair value at the
acquisition date of the identifiable asset, liability or contingent liability being recognized or
adjusted.
Equity Method Investees

Equity method investees consist of the Companys investments in associates and joint ventures.
An associate is an entity over which the Company has significant influence. Significant influence
is the power to participate in the financial and operating policy decisions of the investee, but is not
control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint venture. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.
The considerations made in determining significant influence or joint control are similar to those
necessary to determine control over subsidiaries.
The Companys investments in its associate and joint ventures are accounted for using the equity
method.
Under the equity method, the investment in an associate or a joint venture is initially recognized at
cost. The carrying amount of the investment is adjusted to recognize changes in the Companys
share of net assets of the associate or joint venture since the acquisition date. If the Companys
share of losses of an associate or a joint venture equals or exceeds its interest in the associate or
joint venture, the Company discontinues recognizing its share of further losses. After the entitys
interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to
the extent that the Company has incurred legal or constructive obligations or made payments on
behalf of the associate or joint venture. If the associate or joint venture subsequently reports
profits, the Company resumes recognizing its share of those profits only after its share of the
profits equals the share of losses not recognized.
Goodwill relating to the associate or joint venture is included in the carrying amount of the
investment and is neither amortized nor individually tested for impairment.
*SGVFS021831*
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The Companys share of the results of operations of the associate or joint venture is included in
profit or loss. Any change in OCI of those investees is presented as part of the Companys OCI.
In addition, when there has been a change recognized directly in the equity of the associate or joint
venture, the Company recognizes its share of any changes, when applicable, in the consolidated
statement of changes in equity. Unrealized gains and losses resulting from transactions between
the Company and the associate or joint venture are eliminated to the extent of the Companys
interest in the associate or joint venture.
The aggregate of the Companys share of profit or loss of an associate and a joint venture is shown
on the face of the consolidated statement of comprehensive income outside operating profit and
represents profit or loss after tax and NCI in the subsidiaries of the associate or joint venture.
The financial statements of the associate or joint venture are prepared for the same reporting
period as the Company. When necessary, adjustments are made to bring the accounting policies in
line with those of the Company.
After application of the equity method, the Company determines whether it is necessary to
recognize an impairment loss on its investment in its associate or joint venture. At each reporting
date, the Company determines whether there is objective evidence that the investment in the
associate or joint venture is impaired. If there is such evidence, the Company calculates the
amount of impairment as the difference between the recoverable amount of the associate or joint
venture and its carrying value, then recognizes the impairment loss as Share in net earnings of
equity method investees in the consolidated statement of comprehensive income.
Upon loss of significant influence over the associate or joint control over the joint venture, the
Company measures and recognizes any retained investment at its fair value. Any difference
between the carrying amount of the associate or joint venture upon loss of significant influence or
joint control and the fair value of the retained investment and proceeds from disposal is recognized
in profit or loss.
For purposes of disclosures required under PFRS 12 in determining whether an equity method
investee is material to the Company, management employs both quantitative and qualitative
factors to evaluate the nature of, and risks associated with, the Companys interests in these
entities; and the effects of those interest on the Companys financial position. Factors considered
include, but not limited to, carrying value of the investee relative to the total equity method
investments recognized in the Companys consolidated financial statements, the equity investees
contribution to the Companys consolidated net income, and other relevant qualitative risks
associated with the equity investees nature, purpose and size of activities.
Current Versus Non-current Classification

The Company presents assets and liabilities in the consolidated statement of financial position
based on current/non-current classification.
An asset is current when it is:

Expected to be realized or intended to be sold or consumed in the normal operating cycle
Held primarily for the purpose of trading
Expected to be realized within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.
All other assets are classified as non-current.
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A liability is current when:

It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.
The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are
classified as non-current assets and liabilities, respectively.
Fair Value Measurement

The Company measures AFS financial assets and derivatives at fair value at each reporting date
and, for purposes of impairment testing, uses fair value less costs of disposal or value in use to
determine the recoverable amount of some of its non-financial assets. Also, fair values of
financial instruments measured at amortized cost are disclosed in Note 37.
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 by 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 non-financial 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 fair value for financial instruments traded in active markets at the reporting date is based on
their quoted price or binding dealer price quotations (bid price for long positions and ask price for
short positions), without any deduction for transaction costs. Securities defined in these accounts
as listed are traded in an active market. Where the Company has financial assets and financial
liabilities with offsetting positions in market risks or counterparty credit risk, it has elected to use
the measurement exception to measure the fair value of its net risk exposure by applying the bid or
ask price to the net open position as appropriate. For all other financial instruments not traded in
an active market, the fair value is determined by using valuation techniques deemed to be
appropriate in the circumstances. Valuation techniques include the market approach (i.e., using
recent arms length market transactions adjusted as necessary and reference to the current market
value of another instrument that is substantially the same) and the income approach (i.e.,
discounted cash flow analysis and option pricing models making as much use of available and
supportable market data as possible).
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The Company 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. 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 Company 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.
The Company determines the policies and procedures for both recurring fair value measurement,
such as derivatives, and non-recurring measurement, such as impairment tests. At each reporting
date, the finance team, with the assistance of the respective finance teams of the Parent
Companys subsidiaries, analyzes the movements in the values of assets and liabilities which are
required to be re-measured or reassessed as per the Companys accounting policies. For this
analysis, the finance team verifies the major inputs applied in the latest valuation by agreeing the
information in the valuation computation to contracts, counterparty assessment and other relevant
documents.
The finance team also compares the changes in the fair value of each asset and liability with
relevant external sources to determine whether the change is reasonable. On an interim basis, the
finance team presents the valuation results to the Companys top management for review. This
includes a discussion of the major assumptions used in the valuations.
For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities based on the nature, characteristics and risks of the asset or liability and the level of the
fair value hierarchy as explained above (see Note 37).
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 from acquisition date and that are subject to an insignificant risk of changes in
value.
Restricted Cash
Restricted cash represents cash in banks earmarked for long-term debt principal and interest
repayment maintained in compliance with loan agreements or placed in an escrow account
pursuant to a construction agreement.
Short-term Deposits
Short-term deposits, other than those classified as AFS, are highly liquid money market
placements with maturities of more than three months but less than one year from dates of
acquisition.
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Financial Instruments
The Company recognizes a financial asset or a financial liability in the consolidated statement of
financial position when it becomes a party to the contractual provisions of the instrument. All
regular way purchases and sales of financial assets are recognized on the settlement date. Regular
way purchases and sales are purchases or sales of financial assets that require delivery of assets
within the period generally established by regulation or convention in the marketplace.
Derivatives are recognized on a trade date basis.
Initial Recognition. 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). The fair
value of the consideration given or received is determined by reference to the transaction price or
other market prices. If such market prices are not reliably determinable, the fair value of the
consideration is estimated as the sum of all future cash payments or receipts, discounted using the
prevailing market interest rates for similar instruments with similar maturities. The initial
measurement of financial instruments, except for financial instruments at fair value through profit
or loss (FVPL), includes transaction costs.
The Company classifies its financial instruments in the following categories: financial assets at
FVPL, held-to-maturity (HTM) investments, loans and receivables, AFS financial assets, financial
liabilities at FVPL and other financial liabilities.
The classification depends on the purpose for which the financial instruments were acquired or
liabilities were incurred and whether they are quoted in an active market. Management determines
the classification of its instruments at initial recognition and, where allowed and appropriate,
re-evaluates such classification at every reporting date.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividend, gains and losses relating to a financial liability 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 related income
tax benefits.
Day 1 Profit or Loss

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 Company recognizes the difference
between the transaction price and fair value (a Day 1 profit or loss) in profit or loss unless it
qualifies for recognition as some other type of asset or liability. In cases where the data 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 Company determines the appropriate method of recognizing the Day 1
profit or loss amount.
Amortized Cost
Amortized cost is computed using the effective interest method less any allowance for impairment
and principal repayment or reduction. The calculation takes into account any premium or discount
on acquisition and includes transaction costs and fees that are integral part of the effective interest
rate.
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Subsequent Measurement. The subsequent measurement of financial assets and financial

liabilities depends on their classification discussed as follows:
Financial Assets and Liabilities at FVPL. Financial assets and liabilities at FVPL include
financial assets and liabilities held for trading and those designated upon initial recognition as at
FVPL. Financial assets and liabilities are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term. Derivatives are also classified as held for
trading unless they are designated as effective hedging instruments. Financial assets and liabilities
classified as at FPVL are carried at fair value in the consolidated statement of financial position,
with any gains or losses being recognized in the profit or loss. Interests earned on holding
financial assets at FVPL are reported as interest income using the effective interest rate.
Dividends earned on holding financial assets at FVPL are recognized in profit or loss when the
right to payment had been established.
Financial assets and liabilities may be designated at initial recognition as at FVPL if any of the
following criteria are met:
The designation eliminates or significantly reduces the inconsistent treatment that would
otherwise arise from measuring the financial assets or liabilities or recognizing gains or losses
on them on different bases; or
The assets are part of a group of financial assets, financial liabilities or both which are
managed and their performance evaluated on a fair value basis, in accordance with a
documented risk management or investment strategy; or
The financial instrument contains an embedded derivative, unless the embedded derivative
does not significantly modify the cash flows or it is clear, with little or no analysis, that it
would not be separately recorded.
The Company accounts for its derivatives (including embedded derivatives) under this category
with fair value changes being reported directly in profit or loss, except when the derivative is
designated in an effective hedging relationship. In that case, the fair value change is either
reported in profit or loss with the corresponding adjustment to the hedged item (fair value hedge)
or deferred in equity (cash flow hedge) presented as Fair value changes on cash flow hedges
under Other comprehensive income reserve account.
The Company has no financial assets and liabilities at FVPL as at December 31, 2016 and 2015.
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 classified as financial assets at FVPL,
HTM investments or AFS financial assets. After initial measurement, loans and receivables are
subsequently measured at amortized cost using the effective interest rate method, less any
impairment. The amortization is included as part of interest income in profit or loss. Losses
arising from impairment are recognized in profit or loss. Loans and receivables are included in
current assets if maturity is within 12 months after the end of reporting period, otherwise these are
classified as noncurrent assets.
Loans and receivables include cash and cash equivalents, short-term deposits (excluding Unit
Investment Trust Fund presented as short-term deposits but classified as AFS financial assets) and
long-term deposits, receivables, restricted cash and other deposits, and due from related parties
(see Notes 7, 8, 9, 21, 36 and 37).
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HTM Investments. HTM investments are quoted non-derivative financial assets with fixed or
determinable payments and fixed maturities for which the Companys management has the
positive intention and ability to hold to maturity. Investments intended to be held for an undefined
period are not included in this classification. When the Company sells or reclassifies other than an
insignificant amount of HTM investments, the entire category would be tainted for 2 years and
reclassified as AFS financial assets.
After initial measurement, these investments are subsequently measured at amortized cost. The
amortization is included as part of interest income in profit or loss. Gains and losses are
recognized in profit or loss when the HTM investments are derecognized and impaired, as well as
through the amortization process. The losses arising from impairment of such investments and the
effects of restatement on foreign currency denominated HTM investments are also recognized in
profit or loss. Assets under this category are classified as current assets if maturity is within 12
months from the reporting date and as noncurrent assets if maturity is more than a year from the
reporting date.
The Company has no HTM investments as at December 31, 2016 and 2015.
AFS Financial Assets. AFS financial assets are non-derivative financial assets that are designated
as such or not classified in any of the other categories. AFS financial assets include equity and
debt securities. They are purchased and held indefinitely and may be sold in response to liquidity
requirements or changes in market conditions.
After initial measurement, AFS financial assets that are quoted are subsequently measured at fair
value. The unrealized gains and losses arising from the change in fair value of AFS financial
assets are recognized and included in the Fair value changes on AFS financial assets under
Other comprehensive income reserve account until the investment is derecognized or
determined to be impaired, at which time the cumulative gains or losses are reclassified to profit or
loss. When the Company holds more than one investment in the same security, these are deemed
to be disposed of on an average cost method basis. Interest earned on holding AFS debt financial
assets are reported as interest income using the effective interest rate method. Dividends earned
on holding AFS equity financial assets are recognized in profit or loss when the right of payment
has been established. AFS equity financial assets that are unquoted and for which fair values
cannot be reliably determined are carried at cost less any impairment in value.
As at December 31, 201 6 and 2015, this category includes investments in quoted and unquoted
common shares and preferred shares, Unit Investment Trust Fund, investments in golf club shares
and investments in bonds (see Notes 7, 10, 11, 36 and 37).
Other Financial Liabilities. This category pertains to financial liabilities that are not held for
trading or not designated as at FVPL upon the inception of the liability. These include liabilities
arising from operations and borrowings.
Other 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 cost. Any effect of restatement of foreign currency-denominated liabilities are
recognized in profit or loss.
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All of the Companys financial liabilities, except for derivative liabilities, are classified as other
financial liabilities which include the following, among others (see Note 36):
a. Loans and Borrowings
All loans and borrowings are initially recognized at fair value of the consideration received
less directly attributable transaction costs (referred to as debt issue costs). Debt issue costs
are amortized over the life of the debt instrument using the effective interest method. After
initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the effective interest rate method. Gains and losses are recognized in
profit or loss when the liabilities are derecognized, as well as through the amortization
process. This category generally includes short-term and long-term debts.
b. Financial Guarantee Contracts
Financial guarantee contracts issued by the Company are those contracts that require a
payment to be made to reimburse the holder for a loss it incurs because the specified debtor
fails to make a payment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for
transaction costs that are directly attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the best estimate of the expenditure required to settle
the present obligation at the end of reporting period and the amount recognized less
cumulative amortization. This category generally includes financial guarantee obligation.
Derivatives and Hedge Accounting

Freestanding and separated embedded derivatives are classified as financial assets or financial
liabilities at FVPL unless they are designated as effective hedging instruments. The Company
uses derivative financial instruments, such as cross-currency swaps and interest rate swaps, to
hedge its foreign currency risks and interest rate risks, respectively. Derivative instruments are
initially recognized at fair value on the date in which a derivative transaction is entered into or
bifurcated, and are subsequently remeasured at fair value. Derivatives are carried as assets when
the fair value is positive and as liabilities when the fair value is negative. Consequently, gains and
losses from changes in fair value of derivatives not designated as effective accounting hedges are
recognized immediately in profit or loss.
For the purpose of hedge accounting, hedges are classified primarily as: (a) a hedge of the fair
value of a recognized asset or liability or an unrecognized firm commitment except for foreign
currency risk (fair value hedge); or (b) a hedge of the exposure to variability in cash flows
attributable to a recognized asset or liability or a highly probable forecasted transaction or foreign
currency risk in an unrecognized firm commitment (cash flow hedge); or (c) hedge of a net
investment in a foreign operation. The Company has no derivatives in 2016 and 2015 designated
as fair value hedges or hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Company formally designates and documents the
hedge relationship to which the Company wishes to apply hedge accounting and the risk
management objective and strategy for undertaking the hedge. The documentation includes
identifying the hedging instrument, the hedged item or transaction, the nature of the risk being
hedged and how the entity will assess the hedging instruments effectiveness in offsetting the
exposure to changes in the hedged items fair value or cash flows attributable to the hedged risk.
Such hedges are assessed on an ongoing basis to determine that they actually have been highly
effective throughout the financial reporting periods for which they were designated.
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In cash flow hedges, changes in the fair value of a hedging instrument that qualifies as a highly
effective cash flow hedge are included in equity, net of related deferred tax, and presented as Fair
value changes on cash flow hedges under Other comprehensive income reserve account in the
consolidated statement of financial position. The ineffective portion is immediately recognized in
profit or loss.
If the hedged cash flow results in the recognition of an asset or a liability, gains and losses initially
recognized in equity are transferred from equity to net income in the same period during which the
hedged forecasted transaction or recognized asset or liability affects profit or loss.
When the hedge ceases to be highly effective, hedge accounting is discontinued prospectively. In
this case, the cumulative gain or loss on the hedging instrument that had been recognized in other
comprehensive income reserve is retained as such until the forecasted transaction occurs. When
the forecasted transaction is no longer expected to occur, any net cumulative gain or loss
previously reported in other comprehensive income reserve is credited or charged immediately to
profit or loss.
For derivatives that are not designated as effective accounting hedges, any gains or losses arising
from changes in fair value are recognized directly in profit or loss.
Embedded Derivatives. An embedded derivative is separated from the host contract and
accounted for as derivative if all the following conditions are met:
The economic characteristics and risks of the embedded derivative are not clearly and closely
related to the economic characteristics of the host contract;
A separate instrument with the same terms as the embedded derivative would meet the
definition of the derivative; and
The hybrid or combined instrument is not recognized as at FVPL.
Embedded derivatives that are bifurcated from the host contracts are accounted for as financial
assets or liabilities at FVPL. Changes in fair values are recognized in profit or loss. Derivatives
are carried as assets when the fair value is positive and as liabilities when the fair value is
negative.
The Company assesses whether an embedded derivative is required to be separated from the host
contract and accounted for as a derivative when the entity first becomes a party to the contract.
Subsequent reassessment is prohibited unless there is a change in the terms of the contract that
significantly modifies the cash flows that otherwise would be required under the contract, in which
case reassessment is required. The Company determines whether a modification to cash flows is
significant by considering the extent to which the expected future cash flows associated with the
embedded derivative, the host contract or both have changed and whether the change is significant
relative to the previously expected cash flows on the contract.
Current Versus Noncurrent Classification of Derivatives

Derivative instruments that are not designated and considered as effective hedging instruments are
classified as current or noncurrent or separated into a current and noncurrent portion based on an
assessment of the facts and circumstances (i.e., the underlying contracted cash flows).
If the Company holds a derivative for trading purposes, irrespective of the timing of future
cash flows, it is classified as current.
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Where the Company holds a derivative as an economic hedge (and does not apply hedge
accounting), for period beyond 12 months after the end of reporting period, the derivative is
classified as noncurrent (or separated into current and noncurrent portions) consistent with the
classification of the underlying item.
Embedded derivatives that are not closely related to the host contract are classified consistent
with the cash flows of the host contract.
Derivative instruments that are designated as, and are considered effective hedging instruments,
are classified consistent with the classification of the underlying hedged item. The derivative
instrument is separated into a current portion and noncurrent portion only if a reliable allocation
can be made.
Classification of Financial Instruments Between Liability and Equity

A financial instrument is classified as a liability if it provides for a contractual obligation to:
Deliver cash or another financial asset to another entity; or

Exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Company; 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 Company 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.
Impairment of Financial Assets

The Company assesses at each end of reporting period whether a financial asset or group of
financial assets is impaired. If any such evidence exists, the Company applies the relevant
impairment policies by measurement type of financial asset to determine the amount of any
impairment loss. A financial asset or a group of financial assets is deemed to be impaired if, and
only if, there is objective evidence of impairment as a result of one or more events that have
occurred after the initial recognition of the asset (an incurred loss event) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated. Objective evidence of impairment may include
indications that the borrower or a group of borrowers is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will
enter bankruptcy or other financial reorganization, and where observable data indicate that there is
measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.
Assets Carried at Amortized Cost. The Company first assesses whether objective evidence (such
as the probability of insolvency or significant financial difficulties of the debtor) of impairment
exists individually for financial assets that are individually significant, and individually or
collectively for financial assets that are not individually significant. If it is determined 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.
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If there is objective evidence that an impairment loss on assets carried at amortized cost had 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 credit losses that have not
been incurred) discounted at the financial assets original effective interest rate (i.e., the effective
interest rate computed at initial recognition). 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. The
assets and the associated allowance are written off when there is no realistic prospect of future
recovery, and all collateral had been realized or had been transferred to the Company. If a write-
off is later recovered, the recovery is credited to profit or loss.
If, in a subsequent year, the amount of the impairment loss decreases because of an event
occurring after the impairment was recognized, the previously recognized impairment loss is
reversed. 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 what the amortized cost would have
been had the impairment not been recognized at the date impairment is reversed. The amount of
the reversal shall be recognized in profit or loss.
Assets Carried at Cost. If there is objective evidence that an impairment loss had been incurred
on an unquoted equity instrument that is not carried at fair value because its fair value cannot be
reliably measured, 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.
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. The asset together with the associated allowance
are written off when there is no realistic prospect of future recovery and all collateral had been
realized or had been transferred to the Company.
AFS Financial Assets. For AFS financial assets, the Company assesses at each end of reporting
period whether there is objective evidence that a financial asset or group of financial assets is
impaired.
In the case of equity investments classified as AFS financial assets, this would include a
significant or prolonged decline in the fair value of the investments below their cost. Significant
is evaluated against the original cost of the investment and prolonged against the period in which
the fair value has been below its original cost. 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 Other comprehensive income reserve account 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 directly in Other comprehensive income reserve account.
In the case of debt instruments classified as AFS financial assets, impairment is assessed based on
the same criteria as financial assets carried at amortized cost. However, the amount recorded for
impairment is the cumulative loss measured as the difference between the amortized cost and the
current fair value, less any impairment loss on that investment previously recognized in profit or
loss. Future interest income continues to be accrued based on the reduced carrying amount of the
asset, using the rate of interest used to discount future cash flows for the purpose of measuring the
impairment loss. Such accrual is recorded as part of Interest income in profit or loss. If, in
subsequent year, the fair value of a debt instrument increases 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.
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Derecognition of Financial Instruments
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 Companys rights to receive cash flows from the asset have expired;
The Company retains the right to receive cash flows from the asset, but has assumed an
obligation to pay them in full without material delay to a third party under a pass-through
arrangement; or
The Company has transferred its rights to receive 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.
Where the Company 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 Companys continuing involvement in the asset. In that case, the Company 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 Company has retained. 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 Company could
be required to repay.
Financial Liabilities. A financial liability is derecognized when the obligation under the liability
is discharged, cancelled or has expired. Where 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 and any costs or fees incurred are recognized in the profit or loss.
Offsetting of Financial Instruments

Financial assets and liabilities are offset and the net amount reported in the consolidated statement
of financial position if, and only if, there is a currently enforceable right to offset the recognized
amounts and there is intention to settle on a net basis, or to realize the asset and settle the liability
simultaneously. The Company assesses that it has a currently enforceable right of offset if the
right is not contingent on a future event, and is legally enforceable in the normal course of
business, event of default, and event of insolvency or bankruptcy of the Company and all of the
counterparties.
Inventories
Inventories, which are included as part of Other current assets in the consolidated statement of
financial position, are valued at the lower of cost and net realizable value (NRV).
Cost includes purchase price and import duties incurred in bringing each item of inventory to its
present location and condition. Cost is determined using the moving average method for the
healthcare segment and weighted average method for the tollways and the water segment.
Depending on the nature of the inventory, NRV is based either on current replacement cost or
estimated selling price less estimated cost to sell.
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Advances to Contractors and Consultants

Advances to contractors and consultants which is included as part of Other current assets in the
consolidated statement of financial position, represent advance payments for mobilization of the
contractors and consultants. These are stated at costs less any impairment in value. These
amounts are reduced upon receipt of the equivalent amount of services rendered by the contractors
and consultants.
Service Concession Arrangements

The Company accounts for its service concession arrangements in accordance with Philippine
Interpretation IFRIC 12 under the intangible asset model as it receives the right (license) to charge
users of public service (see Note 13).
Revenue and Cost Recognition. The Company recognizes and measures revenue and cost in
accordance with PAS 11, Construction Contracts, and PAS 18, Revenue, for the services it
performs. When the Company provides construction or upgrade services, the consideration
received or receivable by the Company is recognized at its fair value. The revenue and cost from
these services are recognized based on the percentage of completion measured principally on the
basis of estimated completion of a physical proportion of the contract works, and by reference to
the actual costs incurred to date over the estimated total cost of the project.
Contractual Obligations. The Company recognizes its contractual obligations to restore the toll
roads to a specified level of serviceability in accordance with PAS 37, Provisions, Contingent
Liabilities and Contingent Assets, as the obligation arises which is as a consequence of the use of
the toll roads and is proportional to the number of vehicles using the toll roads and increasing in
measurable annual increments (see Note 17).
Service Concession Assets. The service concession assets acquired through business combinations
are recognized initially at the fair value of the concession agreement using multi-period excess
earnings method. Additions subsequent to business combinations are initially measured at present
value of any additional estimated future concession fee payments pursuant to the concession
agreement (see Notes 13 and 18) and/or the costs of rehabilitation works incurred or additional
constructions.
Service concession assets acquired other than through business combinations include capitalized
upfront payments and expenditures directly attributable to the acquisition of the service
concession. Payments to the Grantor/s over the concession period are capitalized at their present
value using the incremental borrowing rate determined at inception date and is included as part of
the initial recognition of the service concession asset with a corresponding liability recognized as
Service concession fees payable. Borrowing cost in relation to service concession assets that are
considered as qualifying assets forms part of the cost of the service concession asset.
Following initial recognition, the service concession assets are carried at cost less accumulated
amortization and any impairment losses.
Following are the methods used to amortize the service concession assets:
Methods Company
Unit of Production (UOP) Maynilad, CIC and NLEX Corp
Straight-line LRMC, PHI
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The amortization period and method for an intangible asset with a finite useful life is reviewed at
each financial year-end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the service concession asset is accounted
for by changing the amortization period or method, as appropriate, and are treated as changes in
accounting estimates. The amortization expense is recognized under the Cost of sales and
services account in the consolidated statement of comprehensive income.
The service concession assets will be derecognized upon turnover to the Grantor. There will be no
gain or loss upon derecognition as the service concession assets, which are expected to be fully
amortized by then, will be handed over to the Grantor for no consideration.
Deferred Project Costs. Costs directly attributable to the acquisition of a service concession are
recorded as Deferred project costs until commencement of the concession term, whereupon the
costs are transferred to either Service concession asset or financial asset depending if the
concession arrangement is under an intangible asset and financial asset model, respectively.
Property and Equipment

Property and equipment, except land, are carried at cost, excluding day-to-day servicing, less
accumulated depreciation and any impairment loss. The initial cost of property and equipment
comprises its purchase price, including import duties and non-refundable purchase taxes and any
directly attributable costs of bringing the property and equipment to its working condition and
location for its intended use. Such cost includes the cost of replacing part of such property and
equipment and borrowing costs for long-term construction projects when the recognition criteria
are met. When significant parts of property and equipment are required to be replaced at intervals,
the Company recognizes such parts as individual assets with specific useful lives and depreciation.
Likewise, when major repairs are performed, its cost is recognized in the carrying amount of the
property and equipment as a replacement if the recognition criteria are satisfied. Land is stated at
cost less any impairment loss.
Expenditures incurred after the property and equipment have been put into operation, such as
repairs and maintenance, are normally recognized as expense in the period such costs are incurred.
In situations where it can be clearly demonstrated that the expenditures have resulted in an
increase in the future economic benefits expected to be obtained from the use of an item of
property and equipment beyond its originally assessed standard of performance, the expenditures
are capitalized as additional cost of the property and equipment.
Depreciation commences once the property and equipment are available for use and is computed
on a straight-line basis over the estimated useful lives of the assets:
Leasehold improvements 25 years or lease term

whichever is shorter
Land improvements 5 years
Building and building improvements 530 years
Office and other equipment, furniture and fixtures 25 years
Transportation equipment 25 years
Instruments, tools and other equipment 25 years
Library books 35 years
The property and equipments residual values, useful lives and depreciation method are reviewed,
and adjusted prospectively if appropriate, at each reporting date.
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An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of
the item) is included in profit or loss in the year the asset is derecognized.
Construction in progress is stated at cost less any impairment in value. This includes cost of
construction and other direct costs. Construction in progress is not depreciated until such time that
the relevant assets are completed and available for its intended use.
Intangible Assets
Intangible assets, other than service concession assets, acquired separately are measured on initial
recognition at cost. The costs of intangible assets acquired in a business combination are their fair
value as at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less any accumulated amortization and 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 as either finite or indefinite.
Intangible assets with finite lives are amortized over their estimated useful lives and assessed for
impairment whenever there is an indication that an intangible asset may be impaired. The
amortization period and the amortization method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset is accounted
for by changing the amortization period or method, as appropriate, and are treated as changes in
accounting estimates. The amortization expense on intangible assets with finite lives is recognized
in profit or loss in the expense category consistent with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment
annually, either individually or at the CGU level (see Notes 12 and 15). The assessment of
indefinite life is reviewed annually to determine whether the indefinite life continues to be
supportable. If no longer supportable, 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 theintangible asset and are
recognized in profit or loss when the intangible asset is derecognized.
Property Use Rights. Property use rights are made up of land and building use rights that arose
from transactions that qualified as business combinations, for which contracts are originally and
legally in the form of lease. Property use rights are initially recognized at fair value at the date of
business combination and subsequently amortized on a straight-line basis over the term of the
lease (see Notes 14 and 33) and assessed for impairment whenever there is an indication that these
are impaired.
Impairment of Nonfinancial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Company estimates the assets recoverable amount. An assets 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
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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,
recent market transactions are taken into account, if available. If no such transactions can be
identified, 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 are recognized in profit or loss.
The Company bases its impairment calculation on detailed budgets and forecast calculations
which are prepared separately for each of the Companys CGUs to which the individual assets are
allocated. These budgets and forecast calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and applied to project future cash flows after
the fifth year.
Impairment losses, including impairment on inventories, are recognized in profit or loss in those
expense categories consistent with the function of the impaired asset.
For nonfinancial assets excluding goodwill, an assessment is made at each reporting date to
determine whether there is an indication that previously recognized impairment losses no longer
exist or have decreased. If such indication exists, the Company estimates the assets or CGUs
recoverable amount. 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. The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, 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 a revalued amount,
in which case, the reversal is treated as a revaluation increase. After such a reversal, the
depreciation (in case of property and equipment) and amortization (in case of property use rights,
service concession assets and software cost) charges are adjusted in future periods to allocate the
assets revised carrying amount, less any residual value, on a systematic basis over their remaining
useful lives.
Goodwill. Goodwill is reviewed for impairment annually or more frequently if events or changes
in circumstances indicate that the carrying amount may be impaired. Impairment is determined
for goodwill by assessing the recoverable amount of the CGU, or group of CGUs, to which the
goodwill relates. Where the recoverable amount of the CGU, or group of CGUs, is less than the
carrying amount of the CGU or group of CGUs, to which goodwill had been allocated, an
impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future
periods.
Service Concession Assets not yet Available for Use. Service concession assets not yet available
for use are tested for impairment annually. Impairment is determined by comparing the carrying
value of the asset with its recoverable value. Where the recoverable value of the service
concession assets not yet available for use is less than the carrying value, an impairment is
recognized.
Assets Held For Sale

Assets are classified as assets held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. Sale is determined
to be highly probable, if management is committed to a plan to sell the asset (or disposal group),
and an active programme to locate a buyer and complete the plan have been initiated. Further, the
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asset (or disposal group) is actively marketed for sale at a price that is reasonable in relation to its
current fair value. In addition, the sale is expected to qualify for recognition as a completed sale
within one year from the date of classification, except as when the delay is caused by events or
circumstances beyond the Companys control and there is sufficient evidence that the Company
remains committed to its plan to sell the asset (or disposal group).
Assets held for sale are stated at the lower of carrying amount and fair value less costs to sell and
are presented as current assets in the consolidated statement of financial position.
Assets Held in Trust

Assets that are owned by Metropolitan Waterworks and Sewerage System (MWSS) but are used
in the operations of Maynilad under the Concession Agreement, are not reflected in the
consolidated statement of financial position but treated as Assets Held in Trust, except for certain
assets transferred to Maynilad as mentioned in Note 34.
Claims from the Grantors
Structural Defect Restoration (SDR) costs and Existing System Requirement (ESR) costs.
LRMCs claims from the Grantors of the LRT-1 Concession, based on the actual costs incurred,
are initially recorded as deferred charges lodged under Other noncurrent assets pending approval
from the Grantors. Subsequently, once the claims have been verified by the Independent
Consultant and agreed to by the Grantors, they will be reclassified to claims receivable under
Receivables. Claims that are not approved shall be reclassified to the Service concession
assets account.
Light Rail Vehicle (LRV) Shortfall, Fare Deficits and Grantors Compensation Payment. LRMC
shall recognize these claims as revenue only when it is probable that the economic benefit
associated with these transactions will flow to LRMC; that is until the consideration is received or
until an uncertainty is removed. The uncertainty is removed when the claim is acknowledged or
approved by the Grantors, whichever is earlier.
Equity Attributable to Owners of the Parent Company
Common Stocks. Common stocks are classified as equity and are measured at par value for all
shares issued. Proceeds and/or fair value of consideration received in excess of par value are
recognized as additional paid-in capital. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
Preferred Shares. Preferred share is classified as equity if it is non-redeemable, or redeemable

only at the Companys option, and any dividends are discretionary. Dividends thereon are
recognized as distributions within equity upon approval by the Parent Companys BOD.
Preferred share is classified as a liability if it is redeemable on a specific date or at the option of

the shareholders, or if dividend payments are not discretionary. Dividends thereon are recognized
as interest expense in profit or loss as accrued.
Retained Earnings. Retained earnings represent accumulated earnings net of cumulative

dividends declared, adjusted for the effects of equity restructuring and transactions with NCI and
the effects of changes in accounting policies as may be required by the standards transitional
provisions.
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Cash Dividend. The Company recognizes a liability to distribute cash to equity holders of the
Parent Company when the distribution is authorized and the distribution is no longer at the
discretion of the Company. As per the corporate laws in the Philippines, a distribution is
authorized when it is approved by the Board of Directors. A corresponding amount is recognized
directly in retained earnings.
Equity Reserves. Equity reserves are made up of equity transactions other than capital
contributions such as equity component of a convertible financial instrument, transactions with
NCI and share-based payment transactions or ESOP.
Other Comprehensive Income Reserve. OCI reserve comprises items of income and expenses that
are recognized directly in equity. OCI items are either reclassified to profit or loss or directly to
equity in subsequent periods.
Borrowing Costs
Borrowing costs are capitalized if they are directly attributable to the acquisition, construction or
production of a qualifying asset. To the extent that funds are borrowed specifically for the
purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalization
on that asset shall be determined as the actual borrowing costs incurred on that borrowing during
the period less any investment income on the temporary investment of those borrowings. To the
extent that funds are borrowed generally, the amount of borrowing costs eligible for capitalization
shall be determined by applying a capitalization rate to the expenditures on that asset. The
capitalization rate shall be the weighted average of the borrowing costs applicable to the
borrowings of the Company that are outstanding during the period, other than borrowings made
specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs
capitalized during a period shall not exceed the actual amount of borrowing costs incurred during
that period.
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 its 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.
Provisions and Contingencies

Provisions are recognized when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. Where the Company expects some or all of a provision to be reimbursed, for example
under an insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in profit or
loss, net of any reimbursement. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the
liability. Where discounting is used, the increase in the provision due to the passage of time is
recognized as an interest expense.
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Warranties and Guarantees. Provision relates to estimated expenses of concluded and

ongoing debt settlement negotiations and certain warranties extended in relation to debt for
asset swap arrangements entered in prior years. The amount of provision is recognized upon
entering into such arrangement and is based on historical experience or best estimate as a
result of ongoing negotiations.
Provision for Heavy Maintenance. Provision for heavy maintenance pertains to the present
value of the estimated contractual obligations of the Company to restore the service
concession assets or toll roads to a specified level of serviceability during the service
concession term and to maintain the same assets in good condition prior to turnover of the
assets to the Philippine Government. The amount of provision is accrued every year and
recognized in profit or loss and is reduced by the actual obligations paid for heavy
maintenance of the service concession.
Contingent Liabilities. Contingent liabilities are not recognized in the consolidated financial
statements but are disclosed in the notes to consolidated financial statements unless the possibility
of an outflow of resources embodying economic benefits is remote. Contingent assets are not
recognized in the consolidated financial statements but are disclosed in the notes to consolidated
financial statements when an inflow of economic benefits is probable.
Contingent Liabilities Recognized in a Business Combination. A contingent liability recognized in

a business combination is initially measured at its fair value. Subsequently, it is measured at the
higher of the amount that would be recognized in accordance with the requirements for provisions
above or the amount initially recognized less, when appropriate, cumulative amortization
recognized in accordance with the requirements for revenue recognition.
Related Parties
Enterprises and individuals that directly, or indirectly through one or more intermediaries, control
or are controlled by or under common control with the Company, including holding companies,
subsidiaries and fellow subsidiaries, are related parties of the Company. Associates, JVs and
individuals owning, directly or indirectly, an interest in the voting power of the Company that
gives them significant influence over the enterprise, key management personnel, including
directors and officers of the Company and close members of the family of these individuals, and
companies associated with these individuals also constitute related parties. In considering each
possible related entity relationship, attention is directed to the substance of the relationship and not
merely the legal form.
Revenue and Income Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment, excluding discounts, rebates and sales taxes
or duty. The Company assesses its revenue arrangements against specific criteria in order to
determine if it is acting as principal or agent. The Company has concluded that it is acting as a
principal in all of its revenue arrangements. The following specific recognition criteria must also
be met before revenue is recognized:
Revenue and income stream recognized under Operating Revenues:
Water and Sewerage Services Revenue. Revenues from water and sewerage services are
recognized upon supply of water to the customers. Billings to customers consist of water,
environmental and sewerage charges.
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Toll Fees. Revenue from toll fees is recognized upon sale of toll tickets. Toll fees received in
advance, through transponders or magnetic cards, is recognized as income upon the holders
availment of the toll road services, net of sales discounts. The unused portion of toll fees
received in advance is reflected in Unearned revenue and other deposits under Accounts
payable and other current liabilities account in the consolidated statement of financial
position.
Hospital and School Revenue. Hospital Revenue comprises of revenue from medical services
and school revenue. Revenue is recognized upon rendering of medical services and sale of
medicines and other pharmaceutical products. School Revenue comprising of tuition and
other school fees are recognized as income over the corresponding school term. Tuition and
other school fees related to the succeeding school term which are collected in advance are
presented in Unearned revenue and other deposits under Accounts payable and other
current liabilities in the consolidated statement of financial position.
Rail Revenue. Rail revenue is generally recognized in profit or loss when the journey is
completed or provided.
Logistics Revenue. Revenue from logistics services is recognized as services are rendered.
Other revenue and income stream recognized under Other income:
Construction Revenue. See accounting policy under Service Concession Arrangements:

Revenue and cost recognition.
Interest Income. Interest income is recognized as it accrues, using the effective interest rate
method.
Dividend Income. Revenue is recognized when the right to receive the payment is established
which is upon the declaration date.
Sale of Investments. Gain or loss is recognized when risk and rewards of ownership had been
transferred to the buyer.
Management Fees. Fees are recognized when services are rendered.
Rental Income. Rental income under operating leases is accounted for in accordance with the
terms of the leases and generally on a straight-line basis.
Others. Other income is recognized when there are incidental economic benefits, other than
the usual business operations, that will flow to the Company and can be measured reliably.
Cost and Expenses Recognition

Cost and expenses are recognized in profit or loss when a decrease in future economic benefit
related to a decrease of an asset or an increase of a liability has arisen that can be measured
reliably. Cost and expenses are recognized in profit or loss on the basis of systematic and rational
allocation procedures when economic benefits are expected to arise over several accounting
periods and the association with income can only be broadly or indirectly determined; or
immediately when expenditure produces no future economic benefits or when, and to the extent
that, future economic benefits do not qualify or cease to qualify, for recognition in the Companys
consolidated statement of financial position as an asset.
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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 and the arrangement conveys a right to use the asset. A
reassessment is made after inception of the lease only if one of the following applies:
a. There is a change in contractual terms, other than a renewal or extension of the agreement;
b. A renewal option is exercised or 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 the fulfillment is dependent on a specified
asset; or
d. There is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) and the date of
renewal or extension period for scenario (b).
Leases where the lessor retains substantially all the risks and benefits of ownership of the assets
are classified as operating leases. Initial direct costs incurred in negotiating operating leases are
added to the carrying amount of the leased asset and recognized over the lease term on the same
basis as rental income. Contingent rents are recognized as income in the period in which they are
earned.
Operating lease payments, net of aggregate of benefit of lease incentives, are recognized as
income in profit or loss on a straight-line basis over the lease term.
Retirement and Other Benefits
Defined Contribution Plan. Certain subsidiaries of the group each maintain a defined contribution
plan that covers all regular full-time employees. Under the defined contribution plan, fixed
contributions by the employer are based on the employees monthly salaries. However, entities
operating in the Philippines, are covered under Republic Act (RA) No. 7641, The Philippine
Retirement Law, which provides for qualified employees a defined benefit minimum guarantee.
The defined benefit minimum guarantee is equivalent to a certain percentage of the monthly salary
payable to an employee at normal retirement age with the required credited years of service based
on the provisions of RA 7641.
Accordingly, these entities account for the retirement obligation under the higher of the defined
benefit obligation relating to the minimum guarantee and the obligation arising from the defined
contribution plan.
For the defined benefit minimum guarantee plan, the liability is determined based on the present
value of the excess of the projected defined benefit obligation over the projected defined
contribution plan obligation at the end of the reporting period. The defined benefit obligation is
calculated annually by a qualified independent actuary using the projected unit credit method. The
Company determines the net interest expense (income) on the net defined benefit liability (asset)
for the period by applying the discount rate used to measure the defined benefit obligation at the
beginning of the annual period to the then net defined benefit liability (asset), taking into account
any changes in the net defined benefit liability (asset) during the period as a result of contributions
and benefit payments. Net interest expense (income) and other expenses (income) related to the
defined benefit plan are recognized in profit or loss.
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The defined contribution liability, on the other hand, is measured at the fair value of the defined
contribution assets upon which the defined contribution benefits depend, with an adjustment for
margin on asset returns, if any, where this is reflected in the defined contribution benefits.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding
interest), are recognized immediately in other comprehensive income.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit
that relates to past service or the gain or loss on curtailment is recognized immediately in profit or
loss. The Company recognizes gains or losses on the settlement of a defined benefit plan when the
settlement occurs.
Defined Benefit Plan. Certain subsidiaries have funded, noncontributory retirement benefit plans
covering all their eligible regular employees. 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: (a) service cost; (b) net interest on the net defined
benefit liability or asset; and (c) 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. These
remeasurements are not reclassified to profit or loss in subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance
policies. Plan assets are not available to the creditors of the Company, nor can they be paid
directly to the Company. Fair value of plan assets is based on market price information. When no
market price is available, the fair value of plan assets is estimated by discounting expected future
cash flows using a discount rate that reflects both the risk associated with the plan assets and the
maturity or expected disposal date of those assets (or, if they have no maturity, the expected period
until the settlement of the related obligations). If the fair value of the plan assets is higher than the
present value of the defined benefit obligation, the measurement of the resulting defined benefit
asset is limited to the present value of economic benefits available in the form of refunds from the
plan or reductions in future contributions to the plan.
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The Companys right to be reimbursed of some or all of the expenditure required to settle a
defined benefit obligation is recognized as a separate asset at fair value when and only when
reimbursement is virtually certain.
Termination benefit. Termination benefits are employee benefits provided in exchange for the
termination of an employees employment as a result of either an entitys decision to terminate an
employees employment before the normal retirement date or an employees decision to accept an
offer of benefits in exchange for the termination of employment.
A liability and expense for a termination benefit is recognized at the earlier of when the entity can
no longer withdraw the offer of those benefits and when the entity recognizes related restructuring
costs. Initial recognition and subsequent changes to termination benefits are measured in
accordance with the nature of the employee benefit, as either post-employment benefits, short-
term employee benefits, or other long-term employee benefits.
Employee leave entitlement. Employee entitlements to annual leave are recognized as a liability
when they are accrued to the employees. This is measured based on undiscounted amount of
liability for leave expected to be settled wholly before twelve months after the end of the annual
reporting period in which the employees rendered the related services.
ESOP
The Company has an ESOP for eligible executives to receive remuneration in the form of
share-based payment transactions, whereby executives render services in exchange for the share
option.
The cost of equity-settled transactions with employees is measured by reference to the fair value
of the stock options at the date at which they are granted. Fair value is determined using an
option-pricing model, further details of which are set forth in Note 31. In valuing equity-settled
transactions, no account is taken of any performance conditions, other than conditions linked to
the share price of the Parent Company (market conditions).
The cost of equity-settled transactions is recognized, together with a corresponding increase in

equity, over the period in which the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to the award (vesting date). The
cumulative expense recognized for equity-settled transactions at each end of reporting period until
the vesting date reflects the extent to which the vesting period has expired and the Companys best
estimate at that date of the number of awards that will ultimately vest. The profit or loss credit or
expense for a period represents the movement in cumulative expense recognized as at the
beginning and end of that period and is recognized as employee benefits.
No expense is recognized for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market condition, which are treated as vesting irrespective of whether or not
the market condition is satisfied, provided that all other performance and/or service conditions are
satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is the
expense as if the terms had not been modified, if the original terms of the award are met. If the
modification increases the fair value of the equity instruments granted, as measured immediately
before and after the modification, the entity shall include the incremental fair value granted in the
measurement of the amount recognized for services received as consideration for the equity
instruments granted. The incremental fair value granted is the difference between the fair value of
the modified equity instrument and that of the original equity instrument, both estimated as at the
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date of the modification. If the modification occurs during the vesting period, the incremental fair
value granted is included in the measurement of the amount recognized for services received over
the period from the modification date until the date when the modified equity instruments vest, in
addition to the amount based on the grant date fair value of the original equity instruments, which
is recognized over the remainder of the original vesting period. If the modification occurs after
vesting date, the incremental fair value granted is recognized immediately, or over the vesting
period if the employee is required to complete an additional period of service before becoming
unconditionally entitled to those modified equity instruments.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of

cancellation, and any expense not yet recognized for the award is recognized immediately. This
includes any award where non-vesting conditions within the control of either the entity or the
counterparty are not met. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new awards are
treated as if they were modifications of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
RSUP
The Company has an RSUP for eligible executives of the Company and subsidiaries to receive
remuneration in the form of share-based payment transactions, whereby executives render services
in exchange for the share awards.
The cost of equity-settled transactions (cost of RSUP) with employees is measured by reference to
the fair value of the shares at the date at which they are granted. Fair value is determined based on
the prevailing closing market price of the shares, further details of which are set forth in Note 31.
The cost of equity-settled transactions is recognized, together with a corresponding increase in

equity, over the period in which the performance and/or service conditions are fulfilled, ending on
the date on which the relevant employees become fully entitled to the award (vesting date). The
cumulative cost of RSUP recognized for equity-settled transactions at each end of reporting period
until the vesting date reflects the extent to which the vesting period has expired and the
Companys best estimate at that date of the number of awards that will ultimately vest. The profit
or loss credit or expense for a period represents the movement in cumulative expense recognized
as at the beginning and end of that period and is recognized as employee benefits.
No expense is recognized for awards that do not ultimately vest. The dilutive effect of outstanding
options is reflected as additional share dilution in the computation of earnings per share
(see Note 30).
Long-term Employee Benefits

The Companys Long-Term Incentives Plan (LTIP) grants cash incentives to eligible key
executives of the Parent Company and certain subsidiaries. Liability under the LTIP is determined
using the projected unit credit method. Employee benefit costs include current service costs,
interest cost, actuarial gains and losses, and past service costs. Past service costs and actuarial
gains and losses are recognized immediately in profit or loss.
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Foreign Currency-Denominated Transactions and Translations

The consolidated financial statements are presented in Philippine Peso, which is the Parent
Companys functional and presentation currency. All subsidiaries and associates evaluate their
primary economic and operating environment and determine their functional currency. Items
included in the consolidated financial statements of each entity are initially measured using that
functional currency.
Transactions and balances. Transactions in foreign currencies are initially recorded in the
functional currency rate of exchange ruling at the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional currency rate of
exchange ruling at the end of reporting period. All differences are taken to profit or loss except
when qualified as adjustment to borrowing costs, and as discussed below for Maynilad.
Foreign exchange differentials relating to the restatement of concession fees payable are deferred
in view of the automatic reimbursement mechanism as approved by the MWSS Board of Trustees
under Amendment No. 1 of the Concession Agreement of Maynilad. Net foreign exchange losses
are recognized as deferred Foreign Currency Differential Adjustments (FCDA) and net foreign
exchange gains are recognized as Deferred FCDA charges under Other noncurrent assets in
the consolidated statements of financial position. The write-off of the deferred FCDA or reversal
of deferred credits will be made upon determination of the new base foreign exchange rate as
approved by the Regulatory Office (RO) during every Rate Rebasing exercise, unless indication of
impairment of the deferred FCDA would be evident at an earlier date.
Foreign exchange differentials arising from other foreign currency-denominated transactions are
credited or charged to operations.
Group companies. On consolidation, the assets and liabilities of foreign operations are translated
into Philippine Peso at the rate of exchange prevailing at the reporting date and their statements of
comprehensive income are translated at exchange rates prevailing at the dates of the transactions.
The exchange differences arising on translation for consolidation are recognized in OCI. On
disposal of a foreign operation, the component of OCI relating to that particular foreign operation
is recognized in profit or loss.
Income Taxes
Current Tax. Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the tax authority. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted, at the reporting date
where the Company 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.
Deferred Tax. Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
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Deferred tax liabilities are recognized for all taxable temporary differences, except (a) where the
deferred tax liability arises from the initial recognition of goodwill or 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 income nor taxable income; and (b) in respect of taxable temporary differences
associated with investments in subsidiaries, associates and joint ventures, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, carryforward benefits
of unused tax credits from excess minimum corporate income tax (MCIT) over the regular
corporate income tax (RCIT) and unused net operating loss carryover (NOLCO), to the extent that
it is probable that taxable income will be available against which the deductible temporary
differences and carryforward benefits of unused tax credits from MCIT and NOLCO can be
utilized. Deferred tax, however, is not recognized when (a) 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 income nor taxable income or loss; and (b) in respect of
deductible temporary differences associated with investments in subsidiaries, associates and
interest in joint ventures, deferred tax assets are recognized only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable income will be
available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each end of reporting period and reduced
to the extent that it is no longer probable that sufficient taxable income will be available to allow
all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed
at each end of the reporting period and are recognized to the extent that it has become probable
that future taxable income will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
year when the asset is realized or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss.
Deferred tax items are recognized in correlation to the underlying transaction either in OCI or
directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to
offset current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same tax authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate
recognition at that date, are recognized subsequently if new information about facts and
circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it
does not exceed goodwill) if it was incurred during the measurement period or recognized in profit
or loss.
Sales Tax
Revenues, expenses and assets are recognized net of the amount of sales tax (commonly referred
to as value-added tax), except:
When the sales tax incurred on a purchase of assets or services is not recoverable from the tax
authority, in which case the sales tax is recognized as part of the cost of acquisition of the
asset or as part of the expense item, as applicable
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When receivables and payables are stated with the amount of sales tax included
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as
part of Other current assets or Accounts payable and other current liabilities in the
consolidated statement of financial position.
Earnings Per Share

Basic earnings per share is calculated by dividing the net income for the year attributable to the
owners of the Parent Company by the weighted average number of common shares outstanding
during the year, after considering the retroactive effect of stock dividend declaration, if any.
Diluted earnings per share attributable to owners of the Parent Company is calculated in the same
manner assuming that, the weighted average number of common shares outstanding is adjusted for
potential common shares from the assumed exercise of ESOP and other dilutive instruments.
Events after the Reporting Period

Post year-end events that provide additional information about the Companys financial position at
the reporting date (adjusting events), if any, are reflected in the consolidated financial statements.
Post year-end events that are not adjusting events are disclosed in the notes to consolidated
financial statements when material.
41. Future Changes in Accounting Policies
The standards, interpretations amendments and improvements to the standards that are issued, but
not yet effective, up to the date of issuance of the Companys financial statements are disclosed
below. The Company intends to adopt these, if applicable, when they become effective. Unless
otherwise specified, these will not have an impact on the Companys consolidated financial
statements.
Effective beginning on or after January 1, 2017
Amendments to PFRS 12, Clarification of the Scope of the Standard (Part of Annual
Improvements to PFRSs 2014 - 2016 Cycle) The amendments clarify that the disclosure
requirements in PFRS 12, other than those relating to summarized financial information, apply
to an entitys interest in a subsidiary, a joint venture or an associate (or a portion of its interest
in a joint venture or an associate) that is classified (or included in a disposal group that is
classified) as held for sale.
Amendments to PAS 7, Statement of Cash Flows, Disclosure Initiative The amendments to

PAS 7 require an entity to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising
from cash flows and non-cash changes (such as foreign exchange gains or losses). On initial
application of the amendments, entities are not required to provide comparative information
for preceding periods. Early application of the amendments is permitted.
Amendments to PAS 12, Income Taxes, Recognition of Deferred Tax Assets for Unrealized
Losses The amendments clarify that an entity needs to consider whether tax law restricts the
sources of taxable profits against which it may make deductions on the reversal of that
deductible temporary difference. Furthermore, the amendments provide guidance on how an
entity should determine future taxable profits and explain the circumstances in which taxable
profit may include the recovery of some assets for more than their carrying amount.
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Entities are required to apply the amendments retrospectively. However, on initial application
of the amendments, the change in the opening equity of the earliest comparative period may
be recognized in opening retained earnings (or in another component of equity, as
appropriate), without allocating the change between opening retained earnings and other
components of equity. Entities applying this relief must disclose that fact. Early application
of the amendments is permitted.
These amendments are not expected to have any impact on the Company.
Effective January 1, 2018
Amendments to PFRS 2, Share-based Payment, Classification and Measurement of Share-

based Payment Transactions The amendments to PFRS 2 address three main areas: the
effects of vesting conditions on the measurement of a cash-settled share-based payment
transaction; the classification of a share-based payment transaction with net settlement
features for withholding tax obligations; and the accounting where a modification to the terms
and conditions of a share-based payment transaction changes its classification from cash
settled to equity settled.
On adoption, entities are required to apply the amendments without restating prior periods, but
retrospective application is permitted if elected for all three amendments and if other criteria
are met. Early application of the amendments is permitted.
Amendments to PFRS 4, Insurance Contracts, Applying PFRS 9, Financial Instruments, with

PFRS 4 The amendments address concerns arising from implementing PFRS 9, the new
financial instruments standard before implementing the forthcoming insurance contracts
standard. They allow entities to choose between the overlay approach and the deferral
approach to deal with the transitional challenges. The overlay approach gives all entities that
issue insurance contracts the option to recognize in other comprehensive income, rather than
profit or loss, the volatility that could arise when PFRS 9 is applied before the new insurance
contracts standard is issued. On the other hand, the deferral approach gives entities whose
activities are predominantly connected with insurance an optional temporary exemption from
applying PFRS 9 until the earlier of application of the forthcoming insurance contracts
standard or January 1, 2021.
The overlay approach and the deferral approach will only be available to an entity if it has not
previously applied PFRS 9.
The amendments are not applicable to the Company since the Company does not have
activities that are predominantly connected with insurance or issue insurance contracts.
PFRS 15, Revenue from Contracts with Customers PFRS 15 establishes a new five-step
model that will apply to revenue arising from contracts with customers. Under PFRS 15,
revenue is recognized at an amount that reflects the consideration to which an entity expects to
be entitled in exchange for transferring goods or services to a customer. The principles in
PFRS 15 provide a more structured approach to measuring and recognizing revenue.
The new revenue standard is applicable to all entities and will supersede all current revenue
recognition requirements under PFRSs. Either a full or modified retrospective application is
required for annual periods beginning on or after January 1, 2018. The Company is currently
assessing the impact of adopting these standards.
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PFRS 9, Financial Instruments PFRS 9 reflects all phases of the financial instruments
project and replaces PAS 39, Financial Instruments: Recognition and Measurement, and all
previous versions of PFRS 9. The standard introduces new requirements for classification and
measurement, impairment, and hedge accounting. PFRS 9 is effective for annual periods
beginning on or after January 1, 2018, with early application permitted. Retrospective
application is required, but providing comparative information is not compulsory. For hedge
accounting, the requirements are generally applied prospectively, with some limited
exceptions.
The adoption of PFRS 9 will have an effect on the classification and measurement of the
Companys financial assets and impairment methodology for financial assets, but will have no
impact on the classification and measurement of the Companys financial liabilities. The
adoption will also have an effect on the Companys application of hedge accounting.
The Company is currently assessing the impact of adopting this standard.
Amendments to PAS 28, Measuring an Associate or Joint Venture at Fair Value (Part of
Annual Improvements to PFRSs 2014 - 2016 Cycle) The amendments clarify that an entity
that is a venture capital organization, or other qualifying entity, may elect, at initial
recognition on an investment-by-investment basis, to measure its investments in associates
and joint ventures at fair value through profit or loss. They also clarify that if an entity that is
not itself an investment entity has an interest in an associate or joint venture that is an
investment entity, the entity may, when applying the equity method, elect to retain the fair
value measurement applied by that investment entity associate or joint venture to the
investment entity associates or joint ventures interests in subsidiaries. This election is made
separately for each investment entity associate or joint venture, at the later of the date on
which (a) the investment entity associate or joint venture is initially recognized; (b) the
associate or joint venture becomes an investment entity; and (c) the investment entity associate
or joint venture first becomes a parent. The amendments should be applied retrospectively,
with earlier application permitted.
Amendments to PAS 40, Investment Property, Transfers of Investment Property The

amendments clarify when an entity should transfer property, including property under
construction or development into, or out of investment property. The amendments state that a
change in use occurs when the property meets, or ceases to meet, the definition of investment
property and there is evidence of the change in use. A mere change in managements
intentions for the use of a property does not provide evidence of a change in use. The
amendments should be applied prospectively to changes in use that occur on or after the
beginning of the annual reporting period in which the entity first applies the amendments.
Retrospective application is only permitted if this is possible without the use of hindsight.
Philippine Interpretation IFRIC-22, Foreign Currency Transactions and Advance

Consideration The interpretation clarifies that in determining the spot exchange rate to use
on initial recognition of the related asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or non-monetary liability relating to advance
consideration, the date of the transaction is the date on which an entity initially recognizes the
nonmonetary asset or non-monetary liability arising from the advance consideration. If there
are multiple payments or receipts in advance, then the entity must determine a date of the
transactions for each payment or receipt of advance consideration. The interpretation may be
applied on a fully retrospective basis. Entities may apply the interpretation prospectively to all
assets, expenses and income in its scope that are initially recognized on or after the beginning
*SGVFS021831*
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of the reporting period in which the entity first applies the interpretation or the beginning of a
prior reporting period presented as comparative information in the financial statements of the
reporting period in which the entity first applies the interpretation.
Effective January 1, 2019
PFRS 16, Leases Under the new standard, lessees will no longer classify their leases as
either operating or finance leases in accordance with PAS 17, Leases. Rather, lessees will
apply the single-asset model. Under this model, lessees will recognize the assets and related
liabilities for most leases on their balance sheets, and subsequently, will depreciate the lease
assets and recognize interest on the lease liabilities in their profit or loss. Leases with a term
of 12 months or less or for which the underlying asset is of low value are exempted from these
requirements.
The accounting by lessors is substantially unchanged as the new standard carries forward the
principles of lessor accounting under PAS 17. Lessors, however, will be required to disclose
more information in their financial statements, particularly on the risk exposure to residual
value. Entities may early adopt PFRS 16 but only if they have also adopted PFRS 15. When
adopting PFRS 16, an entity is permitted to use either a full retrospective or a modified
retrospective approach, with options to use certain transition reliefs.
The Company is currently assessing the impact of adopting PFRS 16.
Deferred Effectivity
Amendments to PFRS 10 and PAS 28, Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture The amendments address the conflict between PFRS 10 and
PAS 28 in dealing with the loss of control of a subsidiary that is sold or contributed to an
associate or joint venture. The amendments clarify that a full gain or loss is recognized when
a transfer to an associate or joint venture involves a business as defined in PFRS 3, Business
Combinations. Any gain or loss resulting from the sale or contribution of assets that does not
constitute a business, however, is recognized only to the extent of unrelated investors
interests in the associate or joint venture.
On January 13, 2016, the Financial Reporting Standards Council postponed the original
effective date of January 1, 2016 of the said amendments until the International Accounting
Standards Board has completed its broader review of the research project on equity accounting
that may result in the simplification of accounting for such transactions and of other aspects of
accounting for associates and joint ventures.
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42. Consolidated Subsidiaries

The consolidated subsidiaries of MPIC are as follows:
MPIC Direct MPIC MPIC Direct MPIC
Direct Interest of Effective Direct Interest of Effective
Name of Subsidiary Place of Incorporation Interest Subsidiary Interest Interest Subsidiary Interest Principal Activity
(In %) (In %)
MPIC Subsidiaries
Metro Pacific Tollways Corporation (MPTC) Philippines 99.9 99.9 99.9 99.9 Investment holding
Maynilad Water Holding Company, Inc. Philippines 51.3 51.3 51.3 51.3 Investment holding
(MWHC)
MetroPac Water Investments Corporation Philippines 100.0 100.0 100.0 100.0 Investment holding
(MPWIC)
Metro Pacific Hospital Holdings, Inc. Philippines 85.6 85.6 85.6 85.6 Investment holding; With the Exchangeable Bond, the
(MPHHI) non-controlling shareholder is entitled to 39.89%
effective ownership interest in MPHHI (see Note 22).
Metro Pacific Light Rail Corp. (MPLRC) Philippines 100.0 100.0 100.0 100.0 Investment holding
MetroPac Logistics Company, Inc. (MPLC) Philippines 100.0 100.0 100.0 100.0 Investment holding
MetroPac Clean Energy Holdings Philippines 100.0 100.0 Investment holding; Incorporated in 2016
Corporation (MCE)
Fragrant Cedar Holdings, Inc. (FCHI) Philippines 100.0 100.0 100.0 100.0 Real estate
Porrovia Corporation Philippines 50.0 50.0 100.0 50.0 50.0 100.0 Investment holding
Neo Oracle Holdings, Inc (NOHI) Philippines 96.6 96.6 96.6 96.6 Investment holding and Real estate; Formerly Metro
Pacific Corporation (MPC). NOHIs corporate life
ended December 31, 2013 and is currently under the
process of liquidation.
MPIC-JGS Airport Holdings, Inc. Philippines 58.8 58.8 58.8 58.8 Investment holding; BOD of MPIC-JGS approved the
(MPIC-JGS) shortening of the companys corporate life to until
February 15, 2016.
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(In %) (In %)
Metro Global Green Waste, Inc. (MGGW) Philippines 70.0 70.0 70.0 70.0 Investment holding; BOD of MGGW approved the
shortening of the companys corporate life to until
December 31, 2017.
MPIC Infrastructure Holdings Limited BVI 100.0 100.0 100.0 100.0 Investment holding
(MIHL)
MPTC Subsidiaries
Metro Pacific Tollways Development Philippines 100.0 99.9 100.0 99.9 Investment holding
Corporation (MPTDC)
Cavitex Infrastructure Corporation (CIC) and Philippines 100.0 99.9 100.0 99.9 Tollway operations; Interest in CIC is held through a
subsidiaries Management Letter Agreement. CIC holds the
concession agreement for the CAVITEX (see Note 1).
Metro Strategic Infrastructure Philippines 97.0 96.9 57.0 95.6 Investment holding; On June 16, 2016, MPTC
Holdings, Inc. (MSIHI) acquired 40% ownership in MSIHI from NOHI.
MPT Asia BVI 100.0 99.9 Investment holding; On September 29, 2016, MPTC
acquired from MIHL 100% of the total issued and
outstanding capital stock of MPT Asia (formerly FPM
Infrastructure Holdings Limited).
M+ Corporation Philippines 100.0 99.9 Tollway collection; Incorporated in 2016.
Metro Pacific Tollways South Corporation Philippines 100.0 99.9 Holding company; Incorporated in 2016.
MPTDC Subsidiaries
NLEX Corporation Philippines 75.6 75.5 75.6 75.5 Tollway operations (see Note 1); Change in the
corporate name from Manila North Tollways
Corporation was approved by the SEC on
February 13, 2017.
Collared Wren Holdings, Inc. (CWHI) Philippines 100.0 99.9 100.0 99.9 Investment holding
Larkwing Holdings, Inc. (LHI) Philippines 100.0 99.9 100.0 99.9 Investment holding
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(In %) (In %)
MPCALA Holdings, Inc. (MPCALA) Philippines 51.0 99.9 51.0 99.9 Tollway operations (see Note 1); MPCALA is owned
by MPTDC at 51% and the remaining 49% owned
equally by CWHI and LHI.
Cebu Cordova Link Expressway Corporation Philippines 100.0 99.9 Tollway operations; CCLEC holds the concession
(CCLEC) agreement for the CCLEX (see Note 1); Incorporated
in 2016
Metro Pacific Tollways Philippines 100.0 99.9 Investment holding; Incorporated in 2016.
Vizmin
Luzon Tollways Corporation (LTC) Philippines 100.0 99.9 100.0 99.9 Tollway operations; Dormant
NLEX Corp Subsidiary

NLEX Ventures Corporation Philippines 100.0 75.5 100.0 75.5 Service facilities management
MPT Asia Subsidiaries

MPT Thailand BVI 100.0 99.9 Investment holding
FPM Tollway (Thailand) Limited Hong Kong 100.0 99.9 Investment holding
AIF Toll Road Holdings (Thailand) Co., Ltd Thailand 100.0 99.9 Investment holding; holds the investment in DMT (see
(AIF) Note 11).
MIHL Subsidiaries
MPT Asia BVI 100.0 100.0 Investment holding; On September 29, 2016, MPTC
acquired from MIHL 100% of the total issued and
outstanding capital stock of MPT Asia (formerly FPM
Infrastructure Holdings Limited).
MPT Thailand BVI 100.0 100.0 Investment holding
FPM Tollway (Thailand) Limited Hong Kong 100.0 100.0 Investment holding
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(In %) (In %)
AIF Toll Road Holdings (Thailand) Co., Ltd Thailand 100.0 100.0 Investment holding
(AIF)
MWHC Subsidiary
Maynilad Water Services, Inc. (Maynilad) Philippines 5.2 92.9 52.8 5.2 92.9 52.8 Water and sewerage services; Holds the concession
agreement for the water distribution in the West
Concession Area (see Note 1).
Maynilad Subsidiaries
Amayi Water Solutions, Inc. (AWSI) Philippines 100.0 52.8 100.0 52.8 Water and sewerage services
Philippine Hydro, Inc. (PHI) Philippines 100.0 52.8 100.0 52.8 Water and sewerage services (see Note 1).
MPWIC Subsidiaries
MetroPac Cagayan De Oro, Inc. (MCDO) Philippines 100.0 100.0 100.0 100.0 Water services
MetroPac Iloilo Holdings Corp.(MILO) Philippines 100.0 100.0 Investment holding/ Water services
Metro Iloilo Bulk Water Supply Corp. Philippines 80.0 80.0 Bulk water services; Holds the joint venture agreement
for the bulk water supply in MIWD (see Note 1).
Eco-System Technologies International, Inc. Philippines 65.0 65.0 EPC and O&M contractor; Acquired in 2016 (see
(ESTII)( Note 4).
MPHHI Subsidiaries
Riverside Medical Center, Inc (RMCI) Philippines 78.0 66.7 78.0 66.7 Hospital operation
East Manila Hospital Managers Corp. Philippines 100.0 85.6 100.0 85.6 Hospital operation; Doing business under the name
(EMHMC) and style of Our Lady of Lourdes Hospital
Asian Hospital Inc. (AHI) Philippines 85.6 73.3 85.6 73.3 Hospital operation
Colinas Verdes Hospital Managers Corp. Philippines 100.0 85.6 100.0 85.6 Hospital operation; Doing business under the name
(CVHMC) and style of Cardinal Santos Medical Center.
AHI Hospital Holdings Corp. Philippines 100.0 85.6 100.0 85.6 Investment holding, Formerly Bumrungrad
International Philippines Inc.
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(In %) (In %)
De Los Santos Medical Center Inc. Philippines 51.0 43.7 51.0 43.7 Hospital operation
(DLSMC)
The Megaclinic, Inc. (Megaclinic) Philippines 51.0 43.7 51.0 43.7 Clinic management
Central Luzon Doctors Hospital, Inc. Philippines 51.0 43.7 51.0 43.7 Hospital operation
(CLDH)
Metro Pacific Zamboanga Hospital Corp. Philippines 100.0 85.6 100.0 85.6 Hospital operation; Doing business under the name
(MPZHC) and style of West Metro Medical Center.
Medigo Corporation Philippines 100.0 85.6 100.0 85.6 Telehealth operation; Formerly First Call 24/7
Corporation
Sacred Heart Hospital of Malolos Inc. Philippines 51.0 43.7 Hospital operation; Acquired in 2016 (see Note 4).
(SHHM)
Marikina Valley Medical Center, Inc. Philippines 93.0 79.6 Hospital operation; Acquired in 2016 (see Note 4).
(MVMC)
RMCI Subsidiary
Riverside College, Inc. (RCI) Philippines 100.0 66.7 100.0 66.7 School operations
CVHMC Subsidiary
Colinas Healthcare, Inc. Philippines 100.0 85.6 100.0 85.6 Clinic management
CLDH Subsidiary
Metro CLDH Cancer Center Corporation Philippines 100.0 43.7 Clinic management; Incorporated in 2016.
MPLRC Subsidiaries
Light Rail Manila Holdings Inc.(LRMH) Philippines 50.0 50.0 50.0 50.0 Investment holding
Light Rail Manila Corporation (LRMC) Philippines 55.0 55.0 55.0 55.0 Rail operations (see Note 1).
Light Rail Manila Holdings 2, Inc. Philippines 50.0 50.0 50.0 50.0 Investment holding
Light Rail Manila Holdings 6, Inc. Philippines 50.0 50.0 Investment holding; Incorporated in 2016.
MPLC Subsidiaries
MetroPac Movers, Inc (MMI) Philippines 76.0 76.0 60.0 60.0 Logistics (see Note 4).
LogisticsPro, Inc. Philippines 100.0 100.0 Logistics; Incorporated in 2016.
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(In %) (In %)
MMI Subsidiaries
MetroPac Trucking Company, Inc. Philippines 100.0 76.0 Logistics; Incorporated in 2016.
TruckingPro, Inc Philippines 100.0 76.0 Logistics; Incorporated in 2016.
PremierLogistics, Inc. Philippines 100.0 76.0 Logistics; Incorporated in 2016.
PremierTrucking, Inc. Philippines 100.0 76.0 Logistics; Incorporated in 2016.
OneLogistics, Inc. Philippines 100.0 76.0 Logistics; Incorporated in 2016.
NOHI Subsidiaries
First Pacific Bancshares Philippines, Inc. Philippines 100.0 96.6 100.0 96.6 Investment holding
Metro Pacific Management Services, Inc. Philippines 100.0 96.6 100.0 96.6 Management services
First Pacific Realty Partners Corporation Philippines 50.0 48.3 50.0 48.3 Investment holding
Metro Tagaytay Land Co., Inc. Philippines 100.0 96.6 100.0 96.6 Real estate; Pre-operating.
Pacific Plaza Towers Management Services, Philippines 100.0 96.6 100.0 96.6 Management services; Dormant.
Inc.
Philippine International Paper Corporation Philippines 100.0 96.6 100.0 96.6 Investment holding; Dormant.
Pollux Realty Development Corporation Philippines 100.0 96.6 100.0 96.6 Investment holding; Dormant.
Metro Asia Link Holdings, Inc. Philippines 60.0 58.0 60.0 58.0 Investment holding; Dormant.
*SGVFS021831*
EXHIBIT II
SUPPLEMENTARY SCHEDULES
SCHEDULE I

SUPPLEMENTARY SCHEDULE REQUIRED
UNDER SRC RULE 68, AS AMENDED (2011)
A. List of Philippine Financial Reporting Standards (PFRSs) effective as at December 31, 2016
PHILIPPINE FINANCIAL REPORTING STANDARDS Not

AND INTERPRETATIONS Not Not Early
Effective as at December 31, 2016 Adopted Adopted Applicable Adopted
Framework for the Preparation and Presentation of Financial
Statements
Conceptual Framework Phase A: Objectives and qualitative characteristics
PFRSs Practice Statement Management Commentary
Philippine Financial Reporting Standards

PFRS 1 First-time Adoption of Philippine Financial Reporting
(Revised) Standards
Amendments to PFRS 1 and PAS 27: Cost of an
Investment in a Subsidiary, Jointly Controlled Entity or
Associate
Amendments to PFRS 1: Additional Exemptions for
First-time Adopters
Amendment to PFRS 1: Limited Exemption from
Comparative PFRS 7 Disclosures for First-time Adopters
Amendments to PFRS 1: Severe Hyperinflation and
Removal of Fixed Date for First-time Adopters
Amendments to PFRS 1: Government Loans
Amendments to PFRS 1: Borrowing Costs
Amendments to PFRS 1: Meaning of Effective PFRSs
PFRS 2 Share-based Payment
Amendments to PFRS 2: Vesting Conditions and

Cancellations
Amendments to PFRS 2: Group Cash-settled Share-
based Payment Transactions
Amendments to PFRS 2: Definition of Vesting Condition
Amendments to PFRS 2: Clarification and Measurement

of Share-based Payment Transactions
PFRS 3 Business Combinations

(Revised)
Amendment to PFRS 3: Accounting for Contingent
Consideration in a Business Combination
Amendment to PFRS 3: Scope Exceptions for Joint
Arrangements
PFRS 4 Insurance Contracts
Amendments to PAS 39 and PFRS 4: Financial

Guarantee Contracts
Amendments to PFRS 4: Applying PFRS 9, Financial
Instruments, with PFRS 4
PFRS 5 Non-current Assets Held for Sale and Discontinued

Operations
Changes in Method of Disposal
PFRS 6 Exploration for and Evaluation of Mineral Resources

SCHEDULE II

PFRS 7 Financial Instruments: Disclosures
Amendments to PAS 39 and PFRS 7: Reclassification of

Financial Assets
Financial Assets - Effective Date and Transition
Amendments to PFRS 7: Improving Disclosures about
Financial Instruments
Amendments to PFRS 7: Disclosures - Transfers of
Financial Assets
Amendments to PFRS 7: Disclosures Offsetting
Financial Assets and Financial Liabilities
Amendments to PFRS 7: Mandatory Effective Date of
PFRS 9 and Transition Disclosures
Amendments to PFRS 7: Servicing Contracts
Amendments to PFRS 7: Applicability of the

Amendments to PFRS 7 to Condensed Interim Financial
Statements
PFRS 8 Operating Segments
Amendments to PFRS 8: Aggregation of Operating

Segments and Reconciliation of the Total of the
Reportable Segments Assets to Condensed Interim
Financial Statements.
PFRS 9 Financial Instruments
Amendments to PFRS 9: Mandatory Effective Date of

PFRS 9 and Transition Disclosures
Financial Instruments New hedge accounting
requirements
PFRS 10 Consolidated Financial Statements
Amendments to PFRS 10: Investment Entities
Amendments to PFRS 10: Sale or Contribution of Assets

Between Investor and its Associate or Joint Venture
PFRS 11 Joint Arrangements
Amendments to PFRS 11: Accounting for Acquisitions

of Interests in Joint Operations
PFRS 12 Disclosure of Interests in Other Entities
Amendment to PFRS 11: Accounting for Acquisitions of

Interests in Joint Operations
PFRS 13 Fair Value Measurement
Amendment to PFRS 13: Short-term Receivables and

Payables
Amendment to PFRS 13: Portfolio Exception
PFRS 14 Regulatory Deferral Accounts
Philippine Accounting Standards

PAS 1 Presentation of Financial Statements
(Revised)
Amendment to PAS 1: Capital Disclosures
SCHEDULE II

Amendments to PAS 32 and PAS 1: Puttable Financial
Instruments and Obligations Arising on Liquidation
Amendments to PAS 1: Presentation of Items of Other
Comprehensive Income
Amendment to PAS 1: Clarification of the Requirements
of Comparative Information
PAS 2 Inventories
PAS 7 Statement of Cash Flows
Disclosure Initiative
PAS 8 Accounting Policies, Changes in Accounting Estimates

and Errors
PAS 10 Events after the Reporting Period
PAS 11 Construction Contracts
PAS 12 Income Taxes
Amendment to PAS 12 - Deferred Tax: Recovery of

Underlying Assets
Recognition of Deferred Tax Assets for Unrealized
Losses
PAS 16 Property, Plant and Equipment
Amendment to PAS 16: Classification of Servicing and

Equipment
Amendment to PAS 16: Revaluation Method
Proportionate Restatement of Accumulated
Depreciation
Amendment to PAS 16: Clarification of Acceptable
Methods of Depreciation and Amortization
Amendment to PAS 16: Bearer Plants
PAS 17 Leases
PAS 18 Revenue
PAS 19 Amendments to PAS 19: Actuarial Gains and Losses,

Group Plans and Disclosures
Employee Benefits (Amended)
Employee Benefits - Defined Benefit Plans: Employee

Contributions (Amendments)
Employee Benefits: Regional Market Issue Regarding
Discount Rate
PAS 20 Accounting for Government Grants and Disclosure of
Government Assistance
PAS 21 The Effects of Changes in Foreign Exchange Rates
Amendment: Net Investment in a Foreign Operation
PAS 23 Borrowing Costs

(Revised)
PAS 24 Related Party Disclosures
(Revised)
Amendments to PAS 24: Key Management Personnel
SCHEDULE II

PAS 26 Accounting and Reporting by Retirement Benefit Plans
PAS 27 Separate Financial Statements

(Amended)
Amendments to PAS 27: Investment Entities
Amendments to PAS 27: Equity Method in Separate

Financial Statements
PAS 28 Investments in Associates and Joint Ventures
(Amended)
Amendments to PFRS 10: Sale or Contribution of Assets
Between an Investor and its Associate or Joint Venture
PAS 29 Financial Reporting in Hyperinflationary Economies
PAS 32 Financial Instruments: Disclosure and Presentation
Amendments to PAS 32 and PAS 1: Puttable Financial

Instruments and Obligations Arising on Liquidation
Amendment to PAS 32: Classification of Rights Issues
Amendments to PAS 32: Offsetting Financial Assets and

Amendments to PAS 32: Tax Effect of Distribution to
Holders of Equity Instruments
PAS 33 Earnings per Share
PAS 34 Interim Financial Reporting
Amendments to PAS 34: Interim Financial Reporting and

Segment Information for Total Assets and Liabilities
Amendments to PAS 34: Disclosure of Information
Elsewhere in the Interim Financial Report
PAS 36 Impairment of Assets
Impairment of Assets - Recoverable Amount Disclosures

for Non-Financial Assets (Amendments)
PAS 37 Provisions, Contingent Liabilities and Contingent Assets
PAS 38 Intangible Assets
Amendments to PAS 38: Revaluation Method

Proportionate Restatement of Accumulated Amortization
Amendments to PAS 38: Clarification of Acceptable
Methods of Depreciation and Amortization
PAS 39 Financial Instruments: Recognition and Measurement
Amendments to PAS 39: Transition and Initial

Recognition of Financial Assets and Financial Liabilities
Amendments to PAS 39: Cash Flow Hedge Accounting
of Forecast Intragroup Transactions
Amendments to PAS 39: The Fair Value Option
Amendments to PAS 39 and PFRS 4: Financial

Guarantee Contracts
Financial Assets
Financial Assets Effective Date and Transition
SCHEDULE II

Amendments to Philippine Interpretation IFRIC9 and
PAS 39: Embedded Derivatives
Amendment to PAS 39: Eligible Hedged Items
Financial Instruments: Recognition and Measurement -

Novation of Derivatives and Continuation of Hedge
Accounting (Amendments)
PAS 40 Investment Property
Amendments to PAS 40: Clarifying the Interrelationship

between PFRS 3 and PAS 40 when Classifying Property
as Investment Property or Owner Occupied Property
Amendments to PAS 40: Transfers of Investment
Property
PAS 41 Agriculture
Amendments to PAS 41: Bearer Plants
Philippine Interpretations
IFRIC 1 Changes in Existing Decommissioning, Restoration and
Similar Liabilities
IFRIC 2 Members' Share in Co-operative Entities and Similar
Instruments
IFRIC 4 Determining Whether an Arrangement Contains a Lease
IFRIC 5 Rights to Interests arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds
IFRIC 6 Liabilities arising from Participating in a Specific Market
- Waste Electrical and Electronic Equipment
IFRIC 7 Applying the Restatement Approach under PAS 29
Financial Reporting in Hyperinflationary Economies
IFRIC 8 Scope of PFRS 2
IFRIC 9 Reassessment of Embedded Derivatives
Amendments to Philippine Interpretation IFRIC9 and

PAS 39: Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 PFRS 2- Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programmes
IFRIC 14 The Limit on a Defined Benefit Asset, Minimum

Funding Requirements and their Interaction
Amendments to Philippine Interpretations IFRIC- 14,
Prepayments of a Minimum Funding Requirement
IFRIC 16 Hedges of a Net Investment in a Foreign Operation
IFRIC 17 Distributions of Non-cash Assets to Owners
IFRIC 18 Transfers of Assets from Customers
IFRIC 19 Extinguishing Financial Liabilities with Equity

Instruments
IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine
SCHEDULE II

IFRIC 21 Levies
IFRIC 22 Foreign Currency Transactions and Advance

Consideration
SIC-7 Introduction of the Euro
SIC-10 Government Assistance - No Specific Relation to

Operating Activities
SIC-12 Consolidation - Special Purpose Entities
Amendment to SIC - 12: Scope of SIC 12
SIC-13 Jointly Controlled Entities - Non-Monetary

Contributions by Venturers
SIC-15 Operating Leases Incentives
SIC-25 Income Taxes - Changes in the Tax Status of an Entity or

its Shareholders
SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a Lease
SIC-29 Service Concession Arrangements: Disclosures.
SIC-31 Revenue - Barter Transactions Involving Advertising

Services
SIC-32 Intangible Assets - Web Site Costs
Annual improvements to PFRSs 2010 2012 Cycle
With Deferred Effective date:
Amendments to PFRS 10 and PAS 28: Sale or Contribution of Assets

between Investor and its Associates or Joint Venture
The following new standards issued by the IASB has not yet been adopted
by the FSRC:
IFRS 15, Revenue from Contracts with Customers
IFRS 16, Leases

SCHEDULE II

SUPPLEMENTARY SCHEDULE REQUIRED
UNDER SRC RULE 68, AS AMENDED (2011)
Financial Soundness Indicators
December 31, December 31,

Financial Ratios Formula
2016 2015
a) Current Ratio Total Current Assets

1.18 1.07
Total Current Liabilities
Net Profit After Tax (NPAT) +

b) Solvency Ratio
Depreciation and Amortization 0.13 0.13
Total Liabilities
c) Total Liabilities-to-Equity Ratio Total Liabilities

0.87 1.00
Total Stockholders' Equity
d) Long-term Debt-to-Equity Ratio Long-term Debt

0.52 0.58
e) Asset to Equity Ratio Total Assets

1.87 2.00
f) Interest Rate Coverage Ratio Earnings before Interest and Taxes

5.26 4.78
Net Interest Expense
g) Net Profit Margin NPAT

37.44% 40.48%
Net Revenues
h) Return on Asset NPAT + Interest expense (net of tax)

6.46% 7.29%
Average Total Assets
i) Return on Equity NPAT

9.90% 10.75%
Average Total Stockholders Equity
SCHEDULE III
RECONCILIATION OF RETAINED EARNINGS

AVAILABLE FOR DIVIDEND DECLARATION
As at December 31, 2015

10th Floor, MGO Building
Legaspi corner Dela Rosa Streets
Legaspi Village, Makati City
Amount
(In Millions)
Unappropriated retained earnings available for dividend declaration,
beginning P
=15,078.0
Add: Net income based on the face of Audited Financial Statements 6,654.8
Less: Dividend declarations during the period (2,715.8)
Total retained earnings end, available for dividend declaration P

=19,017.0
SCHEDULE IV
METRO PACIFIC INVESTMENTS CORPORATION (MPIC) AND SUBSIDIARIES

Supplementary Schedules Required by Paragraph 6D, Part II
Under SRC Rule 68, As Amended (2011)
Schedule A. Financial Assets
Number of shares Amount shown Value based on

Income
Name of issuing entity and or principal in the statement market quotation at
received and
association of each issue amount of bonds of financial end of reporting
accrued
and notes position period
Available-for-sale Financial
Assets
Investment in Preferred shares of 1,541,629,914 shares =20,622
P =
P =1,215
P
Beacon Electric
Investments in shares of stock:
Citra Metro Manila Tollways 1,379,674 shares 316 138
Corporation
Bonifacio Land Corporation 35,448 shares 5
Pacific Global One Aviation 37,500,000 shares 38
Company, Inc.
Subic Water Sewerage Co., 915,580 shares 132
Inc.
Manila Polo Club 1 share 14 14
Palms Country Club 1 share 2 2
Alabang Country Club 1 share 2 2
Pico de Loro Club 1 share 1 1
Investment in Unit Investment =968
P 972 972
Trust Fund
Investments in quoted treasury =946
P 901 901 23
bonds and notes
Investments in quoted corporate =450
P 453 453 17
bonds
P
=23,458 P
=2,345 P
=1,406
The Company does not have any Financial Assets at Fair Value through Profit or Loss and Held-to-Maturity
investments.
SCHEDULE IV
Schedule B. Amounts Receivable from Directors, Officers, Employees, Related Parties, and Principal
Stockholders (Other than Related Parties)
Balance at Balance
Name and Designation of Amounts
beginning Additions Reversal Current Noncurrent at end of
debtor collected
of period period
(In Millions)
Receivables:
Advances to officers and
employees =82
P =106
P (P
=82) =
P =106
P =
P =106
P
Due from related parties:
Tollways Management
Corporation 110 56 (128) 38 38
AF Payments, Inc. 29 29 29
Landco Pacific Corporation 13 13 13
First Pacific Company, Ltd. 2 7 (8) 1 1
Lucena Land Corporation 7 7 7
Others 5 (1) 4 4
P
=219 P
=198 (P
=219) =
P P
=198 =
P P
=198
Schedule C. Amounts Receivable from Related Parties which are eliminated during the consolidation of
financial statements
Balance at Balance at
Name and Designation of Amounts Amounts
beginning Additions Current Noncurrent end of
debtor collected written off
of period period
(In Millions)
Metro Pacific Investments
Corporation (MPIC):
Metro Pacific Hospital
Holding, Inc. =11
P P5
= =
P =
P =16
P =
P =16
P
MetroPac Movers, Inc. 12 12 12
Metro Pacific Tollways
Corporation 5 (3) 2 2
MetroPac Water Investmens
Corporation 1 1 1
Colinas Verdes Hospital
Managers Corporation 12 (12)
East Manila Hospital
Managers Corporation 12 (12)
Metro Pacific Light Rail
Corporation 5 (5)
Asian Hospital, Inc. 6 (6)
Bumrungrad International
Philippines, Inc. 14 (14)
Neo Oracle Holdings, Inc.:

MPIC 359 359 359
Metro Pacific Tollways
Corporation 2 2 2
Metro Pacific Hospital

Holdings, Inc.:
MPIC 21 21 21
P
=421 P
=25 (P
=52) =
P P
=394 =
P P
=394
SCHEDULE IV
Schedule D. Intangible Assets Other Assets
Charged to Charged Other charges

Beginning Additions Ending
Description cost and to other additions
balance at cost* balance
expenses accounts (deductions)*
(In Millions)
Service Concession Assets:
Cost P157,279
= =20,612
P =
P =
P =
P P177,891
=
Accumulated Amortization (21,519) (3,679) (25,198)
Carrying Value 135,760 20,612 (3,679) 152,693
Property Use Rights:

Cost 777 777
Accumulated Amortization (181) (42) (223)
Carrying Value 596 (42) 554
Intangible assets arising from

business combinations**:
Cost 1,213 1,213
Accumulated Amortization (42) (42)
Carrying Value 1,213 (42) 1,171
Software Cost**:
Cost 153 87 11 251
Accumulated Amortization (101) (41) (142)
Carrying Value 52 87 (41) 109
Basketball franchise** 100 100
Goodwill 18,308 2,696 21,004

P
=154,816 P
=24,608 (P
=3,804) =
P P
=11 P
=175,631
*Note for Additions at cost and other charges additions (deductions)

Additions to service concession assets mainly pertains to the NLEX, MPCALA, CCLEC, Maynilad, MIBWSC
and LRT1. For the movements in the service concession assets account, refer to Note 13 to the 2016 Audited
Intangible assets arising from business combination pertains to ESTIIs customer relationship and contracts and
licenses to use intellectual property rights over patents and utility models and MMIs customer contracts.
Other charges to Software Cost pertains to reclassification from Non-current asset.
**Included under Other noncurrent assets or refer to Note 15 to the consolidated statement of financial position.
SCHEDULE IV
Schedule E. Long Term Debt
Amount shown
Amount shown
under caption
under caption Interest rates, amount or
Amount Current
Title of Issue and type of Long-Term number of periodic
authorized by portion of long-
obligation Debt in installments, and
indenture term debt in
related balance maturity dates
related balance
sheet
sheet
(In Millions)
Metro Pacific Tollways Corporation and subsidiaries,
Manila North Tollways Corporation and Cavitex Infrastructure Corporation
Philippine National Bank =5,000
P =148
P =2,838
P Interest rate: 5.0% fixed
(PNB) Loan rate per annum on the first
5 years, subject to repricing
on the 5th year
Payment terms: Principal
payable within 10 years up
to December 2025
Series A Corporate Notes
Facility Agreement:
Series A-7 Notes 4,210 24 3,952 Interest rate: Subject to
BPI 7.2704% fixed interest per
Robinsons Bank annum
Corp. (RBC) Payment terms: 7 years
BDO Capital & bullet-like repayment,
Investment Corp. minimal annual
PNB amortizations aggregating
The Insular Life 6% between March 2012 to
Assurance Co., Ltd March 2017 and 94% in
Security Bank April 2018
Corporation (SBC)
Series A-10 Notes 1,000 7 930 Interest rate: Subject to
BDO Capital & 7.7038% fixed interest per
Investments annum
Corporation Payment terms: 10 years
The Insular Life bullet-like repayment,
Assurance Co Ltd. minimal annual
SBC amortizations aggregating
9% between March 2012 to
March 2020 and 91% in
April 2021
Insular Life Assurance 200 199 Interest rate: 5.0303%
Company, Ltd. fixed interest per annum
Payment terms: 10 years
bullet-like repayment with
principal payable in
November 2023
Philippine American Life 1,000 993 Interest rate: 5.7971%

and General Insurance fixed interest per annum
Company Payment terms: 15 years
December 2028
SunLife of Canada Phils., 800 795 Interest rate: 5.2979%
Inc. fixed interest per annum
October 2023
SCHEDULE IV
Amount shown
Amount shown
under caption
Amount Current
related balance
sheet
sheet
(In Millions)
BDO =6,100
P =159
P =5,521
P Interest rate:
Rizal Commercial (a) 6.50% fixed interest per
Banking Corporation annum from December
(RCBC) 2013 to December 2018
(b) during the period from
December 2018 to
December 2023 the rate per
annum is the higher of:
(i) 5-year PDSTF plus 3%;
or (ii) 6.25% per annum
quarterly repayment
starting January 2014 to
December 2023
Bank of New York Mellon 7,232 108 550 Interest rate: Subject to
(Series 2010-1 Note - (or US $160) 12% fixed interest per
Dollar denominated) annum
quarterly repayment
starting March 2013 to
September 2022
BDO Capital & 4,400 4,326 Interest rate: Subject to
Investment Corporation 5.07% interest per annum
Payment terms:7 years
principal payable in 2021
BDO Capital & 2,600 2,578 Interest rate: Subject to
Investment Corporation 5.50% interest per annum
Banco De Oro Bank loan 3,250 79 2,980 Interest rate: Subject to
interest rate of the higher
of: (i) 5-year PDST-F rate
plus 1.75%; or (ii) 5.5%,
which will be repriced after
5 years Payment terms: 10
years semi-annual principal
and interest repayment
starting March 2014 to
January 2024
Banco De Oro Bank loan 2,100 103 1,987 Interest rate: 5.25% interest
per annum for the first 5
years, subject to repricing
on the 5th year
=
P5.0 Billion Term Loan 5,000 99 1,891 Interest rate: 5.49% Fixed
Facility with Unionbank interest per annum
of the Philippines Payment terms: 10 years
annual repayment until
February 3, 2026
SCHEDULE IV
Amount shown
Amount shown
under caption
Amount Current
related balance
sheet
sheet
(In Millions)
Maynilad Water Holding Company, Inc. and subsidiaries,
Maynilad Water Services, Inc. and Philippine Hydro Inc.
Development Bank of =21,152
P P1,692
= =13,537
P Interest rate: 5.75% fixed
the Philippines interest per annum for the
Landbank of the first 5 years, for the
Philippines remaining 5 years, higher
Chinabank of: (i) benchmark rate plus
SBC 0.75% per annum; or (ii)
BPI 5.75% per annum
BDO Leasing & Payment terms: 10 years
Finance, Inc. semi-annual installments
BDO Unibank, Inc. until March 2023
BDO Unibank, Inc. 5,000 100 4,822 Interest rate: Fixed rate per
Loan annum equal to the higher
of: (i) PDSTF rate plus
0.75% per annum; or
(ii)5.75% per annum
subject to repricing on the
5th year
installment with a 3 years
grace period and maturity
in April 2023
Landbank of the 6,104 3,324 Interest rate: Floating
Philippines (or US $ 137.5) interest rate plus 1.25% per
annum based on the World
Bank Lending Rate, subject
to semi-annual repricing
semi-annual installments
with 7 years grace period
Development Bank of the 5,246 2,959 Interest rate: 6.0% interest
Philippines per annum
Payment terms: Interest and
principal payable in semi-
annual installments within
20 years up to April 2035
Landbank of the 255 16 238 Interest rate: Fixed rate per
Philippines annum equal to the higher
of (i) the PDST-F rate +
1.0%, or (ii) 5.5% per
annum
Payment terms: Payable in
quarterly installments
within 8 years to commence
after the end of the 8th
quarter

International Finance 1,008 143 Interest rate: Fixed rate
Corporation Term loan note, subject to 8.5% per
annum
Payment terms: Payable on
equal semi-annual
SCHEDULE IV
Amount shown
Amount shown
under caption
Amount Current
related balance
sheet
sheet
(In Millions)
installments until
November 2017
International Finance =252
P =35
P =
P Interest rate: Fixed rate
Corporation Term loan note, subject to 8.1% per
annum
Payment terms: Payable on
equal semi-annual
installments until
November 2017
Deutsche Investitions 476 67 Interest rate: Fixed rate
Entwicklungsgeselleschaft note, subject to 9.1% per
Term Loan annum
Payment terms: Semi-
annual interest and
principal payments until
September 2017
Deutsche Investitions 119 17 Interest rate: Fixed rate
Entwicklungsgeselleschaft note, subject to 8.59% per
Term Loan annum
annual interest and
principal payments until
September 2017
International Finance 50 50 Interest rate: LIBOR + IPA
Corporation - (or US $ 1) (1% to 2% of EBITDA)
Subordinated Term Loan Payment terms: Lump sum
payable on April 2017

BDO Omnibus Notes 6,480 65 6,188 Interest rate: 7.5% fixed
Facility and Security rate interest per annum, to
Agreement be repriced in August 2018
based on the higher of:
(i) 5-year PDST-F on the
repricing date plus 1.75%
per annum; or (ii)7.5% per
annum; or (iii) the floor
rate, if any, applicable on a
5 year fixed rate corporate
loans of Noteholder
prevailing as of 30 days
prior to the repricing date
semi-annual interest and
principal payment until
June 2023
=
P25B Loan Facility
Bank of the 10,000 95 9,711 Interest rate: Fixed interest
Philippines Island ranging from 5.24% to
5.89% per annum
Payment terms: Payable
semi-annual within 10
years until June 2025
SCHEDULE IV
Amount shown
Amount shown
under caption
Amount Current
related balance
sheet
sheet
(In Millions)
Philippine National =10,000
P =95
P =9,711
P Interest rate: Fixed interest
Bank ranging from 4.93% to
5.79% per annum for the
first 5 years, subject to
repricing on the 5th year
Banco De Oro 5,000 47 4,857 Interest rate: Fixed interest
of 5.39% per annum for the
first 5 years, subject to
repricing on the 5th year
P16.5B Loan Facility
= 16,500 56 5,914 Interest rate: Fixed interest
Banco De Oro of 5.00% per annum
years until July 2026
Light Rail Manila Corporation

=
P24.0B Omnibus Loan 25,000 644 Interest rate: Subject to
and Security Agreement 7.14% for the first five (5)
(OLSA) years and is subject to
interest repricing every five
(5) years thereafter.
with payment of principal
balance on a quarterly until
March 2031

BDO Short-term facility 12 3 4 Interest rate: Floating Rate
Note
payable in July 2019
De Los Santos Medical Center

China Bank 300 145 Interest rate: Subject to
3.0% fixed rate
Payment terms: 1 year due
in August 2017
Banco De Oro 150 55 Interest rate: Subject to
3.0% fixed rate
in March 2017

Security Bank Corporation 250 70 Interest rate: Subject to
- Short term facility 3.75% fixed rate
in March 2017
SCHEDULE IV
Amount shown
Amount shown
under caption
Amount Current
related balance
sheet
sheet
(In Millions)
AIF Toll Road Holding (Thailand) Limited
Thanachart Bank Public THB 2,100 319 1,770 Interest rate: Subject to
Company Limited floating interest rate of
Minimum Lending Rate
minus 1.50% per annum
annual 15 installments with
final installment due
November 2021
TOTAL P
=3,797 P
=93,219
SCHEDULE IV
Schedule F. Indebtedness to Related Parties (Long term loans from Related Companies)
Name of related party Balance at beginning of period Balance at end of period

(In Millions)
PLDT Communications and =
P =8,352.6
P
Energy Ventures
Schedule G. Guarantees of Securities of Other Issuers
Name of issuing entity of Amount owned

Total amount
securities guaranteed by Title of issue of each class of by person for Nature of
guaranteed and
the Company for which securities guaranteed which statement guarantee
outstanding
this statement is filed is files
Not Applicable. There are no guarantees made by the Company as at December 31, 2016.
Schedule H. Capital Stock
Number of Number of
shares issued shares
and reserved for Number of Directors,
Number of
outstanding options, shares held officers
Title of Issue shares
as shown warrants, by related and Others
authorized
under related conversion parties employees
balance sheet and other
caption rights
Common 38,500,000,000 31,503,878,752 92,495,000 13,222,948,170 68,333,735 18,212,596,847

Preferred
Class A - 20,000,000,000 9,128,105,319 9,128,105,319
=0.01 par value
P
Class B - 1,350,000,000
=1.00 par value
P
SCHEDULE V
MPIC GROUP STRUCTURE
as of December 31, 2016
December 31, 2016
WATER
41.9%(2)
METRO PACIFIC
INVESTMENTS
CORPORATION TOLLROADS
Enterprise 60.0%
Investments
Holding, Inc. (1)
100.0%
Metro Pacific POWER
Infrastructure
Corporation
First Pacific 13.3% Metro Pacific
International HOSPITAL
Holdings, Inc.
Limited
60.0% Metro Pacific
Resource, Inc.
RAIL
26.7%
Intalink B.V.
60.0% Two Rivers LOGISTICS

Holdings Corp.
OTHERS
(1) First
Pacific Company Limited holds 40% equity interest in EIH
(2) Metro Pacific Holdings, Inc. (MPHI) owns 41.9% of the total issued common shares (or 42.0% of the total outstanding common shares
WATER
100.0% Philippine
Hydro, Inc.
51.3% Maynilad Water 92.9% Maynilad Water

Holding
5.2% Services, Inc.
Company, Inc.
100.0% Amayi Water
Solutions Inc.
METRO PACIFIC 100.0% MetroPac Water

INVESTMENTS Investments
Corp.
CORPORATION
MetroPac Eco-System
100.0% 49.0% Watergy Business 30.0% Equipacific 65.0%
Cagayan Technologies
Solutions, Inc. Holdco Inc.
De Oro, Inc. International, Inc.
Laguna Water
Cavite Business
District Aquatech
100.0% Resources Inc. 90.0% Resources Corp.
40.0% Karayan Diliman

100.0% MetroPac Iloilo 39.0% Manila Water
Management,
Holdings Corp. Consortium Inc.
Inc.
Metro Iloilo Bulk Cebu Manila Water
80.0% Water Supply Corp. 51.0% Development, Inc.
Cavitex
Manila North NLEX Ventures
TOLLROADS
100.0% 100.0%
Infrastructure
Tollways Corp(2) Corporation
Corporation(1)
75.6%
100.0%
Metro Pacific M+ Corporation Tollways 60.0% 100.0% Collared
99.9%
Tollways Management Wren Holdings,
Corporation Corp Inc.
100.0% Metro Pacific
Tollways 24.5%
Development Corp.
Easytrip 50.0% 51.0%
MPCALA
Metro Strategic Services
97.0% Holdings, Inc
METRO PACIFIC Infra Holdings Corporation(3)
Inc. 24.5%
INVESTMENTS
CORPORATION CII Bridges and 100.0% 100.0%
45.0% Roads Investment Luzon Tollways Larkwing
Joint Stock Co. Corporation Holdings, Inc.
(Vietnam)
100.0% Metro Pacific Cebu Cordova 100.0% 100.0% Metro Pacific

Tollways South Link Expressway Tollways Vizmin
Corporation Corporation Corporation
MPT AIF Toll Roads Don Muang
MPT Asia FPM Tollway
(Formerly FPM Thailand Holdings Tollway Public
(Thailand)
Infrastructure (Formerly FPM (Thailand) Company Ltd
100.0% 100.0% Tollway Holdings 100.0% Limited 100.0% Limited 29.5%
Holdings Limited)
Limited) (Thailand)
(1) Byvirtue of the Management Letter-Agreement, MPTC acquired control over CIC effective Jan 2, 2013.
(2) 4.6% is owned through 46% ownership in Egis Investment Partners Philippines Inc.
(3) ESC is a Joint venture between MPTDC and EGIS. Equity interest of 50% plus one share.
75.0% Beacon Electric 100.0% Beacon
Asset Holdings PowerGen
POWER Inc. (1) Holdings Inc.
35.0% 56.0%
15.0% Global Business

Manila Electric
Power
Co.
Corporation
Mindanao Energy
100.0% Toledo Holdings 100.0% GBH Power 100.0%
Development
Corp.(2) Resource, Inc. Corp.
METRO PACIFIC
INVESTMENTS Toledo Cebu
89.8% 9.2% 100.0% Global Hydro 89.3% Panay Power
CORPORATION International Trading
Power Corp. Holdings Corp.
Resources Corp.
Panay Power
Global Formosa 100.0% Corp.
93.2% 100.0% ARB Power
Power Panay Energy
Ventures, Inc.
Holdings, Inc. Development
100.0% Corp.
56.0% Cebu Energy
Development
Corp. Global
13.9% Toledo Power 86.1% 100.0%
Renewables
Co.
Power Corp.
100.0% Global Luzon Energy CACI Power
Development Corp.
100.0% Corporation
100.0% Global Energy
Supply Corp.
(1) MPICs ownership of common and preferred shares at 75% but voting rights remain at 50% as per Omnibus Agreement between MPIC and PCEV.
(2) Includes beneficial ownership of the 16% share of GBH Cebu Limited Duration Company, which was dissolved in December 2014.
Metro Pacific
Hospital
Metro Pacific
HOSPITAL Colinas Verdes
Hospital Managers
Holdings, Inc. (1)
100.0%
Zamboanga
Hospital Corp.
100.0% Corp. (Cardinal Santos Central Luzon
Medical Center)
Riverside Medical
Colinas Healthcare, 51.0% Doctors' Hospital
78.0% Center Inc.
100.0% Inc.
Metro CLDH Cancer
100.0% Center Corporation Riverside College Inc.
100.0%
De Los Santos
Medical Center, Manila Medical
51.0%
Lipa Medix Cancer
Inc. Services, Inc.
50.0% Center Corporation
20.0%
AHI Hospital East Manila Hospital

METRO PACIFIC Holdings Corp. Managers Corp. (Our
Medical Doctors,
INVESTMENTS (formerly Bumrungrad 100.0% Lady of Lourdes Hospital) 33.0% Inc.
100.0%
International Phils. Inc.)
CORPORATION Computerized
Sacred Heart 60.0% Imaging Institute, Inc.
Hospital of
Asian Hospital Inc. 51.0% Malolos Inc.
58.1% 27.5% Davao Doctors
85.6%
Marikina Valley Hospital (Clinica
Metro Pacific Medical Center, 35.2% Hilario) Inc.
Hospital 93.1% Inc. Davao Doctors
The Megaclinic,
Holdings, Inc. (1) 30.0% Oncology Center Inc.
51.0% Inc.
Metro Sanitas
Allied Professional
50.0%
Corporation Development Corp.
Lasik Surgery, Inc. 100.0%
50.0%
Davao Doctors
Medigo Corporation
Megacorrrs, Inc. (formerly First Call 24/7 100.0% College, Inc.
50.0% 100.0% Corp.)
(1) GIC
also holds an Exchangeable Bond issued by MPIC which can be exchanged into a 25.5% stake in NSHI in the future, subject to certain
conditions.
RAIL
50.0%
Light Rail
Manila Holdings
Inc. (1) 70.0%
Light Rail
20.0%
Manila
Corporation
METRO PACIFIC Metro Pacific Light Rail

100.0% Manila Holdings
INVESTMENTS Light Rail 50.0%
Corporation 2 Inc. (1)
CORPORATION
50.0%
Light Rail
Manila Holdings
20.0% AF Payments, 6 Inc. (1)
Inc.
50.0% Porrovia
Corporation
50.0%
(1) Controlling interest in LRMHI, LRMH2 and LRMH6. Equity interest of 50% plus one share.
LOGISTICS
100.0%
& SYSTEMS MetroPac Trucking
Company, Inc.
25.0% Indra 100.0% LogisticsPro, 100.0%

TruckingPro, Inc.
Philippines, Inc. Inc.
METRO PACIFIC MetroPac

100.0% 76.0% MetroPac 100.0% PremierLogistics,
INVESTMENTS Logistics
Movers Inc. Inc.
CORPORATION Company, Inc.
100.0% PremierTrucking,
Inc.
100.0%
OneLogistics, Inc.
Metro Global First Gen MPIC-JGS
OTHERS
Fragrant Cedar
Green Waste, Northern Energy Airport
Holdings Inc.
Inc. (2) Corp (3) Holdings, Inc. (4)
100.0% 70.0% 33.3% 58.8%
100.0% 100.0%
Metropac Clean MPIC
Energy Holdings Infrastructure
Corporation Holdings Limited
Metro Pacific First Pacific First Pacific

Neo Oracle
Management Bancshares Realty Partners
METRO PACIFIC 96.6% Holdings, Inc. (1)
Services, Inc. Philippines, Inc. Corporation
INVESTMENTS 100.0% 100.0% 50.0%
CORPORATION
100.0% 62.0% 49.0%
Costa de Metro Pacific

Metro Tagaytay
Madera Land Holdings,
Land Co., Inc
Corporation Inc.
(1) End of corporate life (under liquidation). 100.0% 100.0% 100.0% 60.0%
(2) Corporate life has been shortened to
Pacific Plaza Pollux Realty
until December 31, 2017. Philippine
Towers Metro Asia Link
(3) Corporate life has been shortened to
Management
International Development
until December 31, 2016. Paper Corporation Holdings, Inc.
(4) BOD approved shortening of corporate Services, Inc. Corporation
life to until February 15, 2016.

Mpic 2016 17a - Final

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COVER SHEET

SEC Registration Number

PRINCIPAL OFFICE ( No. / Street / Barangay / City / Town / Province )

1,313 as of 12.31.2016 Last Friday of May December 31

CONTACT PERSON INFORMATION

Mr. David J. Nicol djnicol@mpic.com.ph +632-888-

CONTACT PERSONs ADDRESS

10/F MGO Building, Legaspi corner Dela Rosa Streets

SEC FORM 17-A

December 31, 2016

PART I BUSINESS AND GENERAL INFORMATION ...................................................... 1

Item 1. Description of Business

(A) Business Development

MPIC is a leading infrastructure holding company in the Philippines. MPICs intention is to

Operating companies contribution (%) 23% 23% 4% 48% 2% 100% - -

Operating companies contribution (%) 38% 22% 4% 36% 0% 100% - -

Direct ownership stake of 65% Eco-System Technologies International, Inc. (ESTII). On

Patents, Trademarks, Licenses, Franchises, Concessions or Labor Contract

Dependence on Licenses and Government Approval

Effect of Existing or Probable Governmental Regulations on the Business

Source and availability of raw materials

Transactions with related parties

Costs and effects of compliance with environmental laws

(B.2) Toll Operations

Through its 75.60% effective interest in NLEX Corp:

MPTC also has the following offshore investments:

Patents, Trademarks, Licenses, Franchises, Concessions or Labor Contract

Dependence on Licenses and Government Approval

Effect of Existing or Probable Governmental Regulations on the Business

Sales contributed by foreign sales

Source and availability of raw materials

On October 1, 2016, CIC and M+ Corporation (M+; a wholly-owned subsidiary of MPTC)

Transactions with related parties

Costs and effects of compliance with environmental laws

(B.3a) Power - MERALCO

Through Clark Electric Distribution Corporation (Clark Electric), a 65%-owned subsidiary,

MGen Corporation, a wholly owned subsidiary of MERALCO, was organized as MERALCOs

SBPL is expected to achieve commercial operations in 2019.

Patents, Trademarks, Licenses, Franchises, Concessions or Labor Contract

Principal Products or Services

Contribution in terms of Sales Volume

Dependence on Licenses and Government Approval

Source and availability of raw materials

Business Development/ Products and Services/Customers

Distribution Methods of Products and Services

New Products and Services

Coal Sources Principal Suppliers

Cebu Energy Development Corporation (CEDC)

Wholesale Electricity Spot Market (WESM)

Retail Competition and Open Access

Renewable Energy Act of 2008

income tax holiday for the first seven years of operation;

The power generation companies of GBPC possess the required COCs.

Government Approval Process

MPHHI completed the following acquisitions in 2015 and 2016:

Transactions with related parties

Patents, Trademarks, Licenses, Franchises, Concessions or Labor Contract

Dependence on Licenses and Government Approval

Effect of Existing or Probable Governmental Regulations on the Business

Transactions with related parties

Costs and effects of compliance with environmental laws

Dependence on a Single Customer

Source of Raw Materials

(C) Registrants present employees