MPIC: Annual Report

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
O R A T I O N
A N D
I N V E S T M E N T S
C O R P
S U B S I D I A R I E S
Principal Office (No./Street/Barangay/City/Town/Province)

1 0 t h
s p i
F l o o r ,
c o r n e r
L e g a s p i
MG O
D e l a
B u i l d i n g ,
R o s a
V i l l a g e ,
Form Type
L e g a
S t r e e t s ,
M a k a t i
Department requiring the report
C i t y
Secondary License Type, If Applicable
A C F S
COMPANY INFORMATION
Companys Email Address
Companys Telephone Number/s
Mobile Number
info@mpic.com.ph
+632-888-0888
No. of Stockholders
Annual Meeting
Month/Day
Fiscal Year
Month/Day
1,334 as at 12.31.2014
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
info@mpic.com.ph
+632-888-0888
Contact Persons Address
10/F MGO Building, Legaspi corner Dela Rosa Streets

Legaspi Village, Makati 0721 Philippines
Note: 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.
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 44.0% of
outstanding common shares is P
=61,942 million, computed on the basis of the closing price as at
February 28, 2015 of P
=5.40 per share.
METRO PACIFIC
INVESTMENTS
CORPORATION
SEC FORM 17-A
December 31, 2014
TABLE OF CONTENTS
PART I BUSINESS AND GENERAL INFORMATION
Item 1. Description of Business ........................................................................................ 1
Item 2. Description of Properties .................................................................................... 15
Item 3. Legal Proceedings............................................................................................... 16
Item 4. Submission of Matters to a Vote of Security Holders ........................................ 16
PART II OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Registrants Common Equity and Related Stockholder Matters...... 17
Item 6. Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD & A)
Financial Highlights and Key Performance Indicators ....................................... 20
Operational Review ............................................................................................ 22
I - MPIC Consolidated .................................................................................. 22
II - Operating Segments of the Group........................................................... 26
MPIC Consolidated Statement of Financial Position ......................................... 35
Liquidity and Capital Resources ......................................................................... 39
Comparison of Other Financial Years ................................................................ 42
Item 7. Consolidated Financial Statements ..................................................................... 52
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures ...................................................................................................................... 52
PART III CONTROL AND COMPENSATION INFORMATION
Item 9. Directors and Executive Officers of the Issuer ................................................... 53
Item 10. Executive Compensation ................................................................................. 64
Item 11. Security Ownership of Certain Record and Beneficial Owners and
Management .................................................................................................................... 67
Item 12. Certain Relationships and Related Party Transactions ..................................... 69
PART IV CORPORATE GOVERNANCE
Item 13. Part IV - Corporate Governance portion of the Annual Report ....................... 69
PART V EXHIBITS AND SCHEDULES
Item 14. Exhibits and Reports on SEC Form 17-C (Current Reports) ........................... 70
Item 15. Signatures ......................................................................................................... 71
Item 16. Index to Financial Statements and Supplementary Schedules ......................... 72
i. Exhibit I - 2013 Audited Financial Statements
ii. Exhibit II - Supplementary Schedules
iii. Exhibit III - Annual Corporate Governance Report
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.
MPIC is 55.8% owned by Metro Pacific Holdings, Inc. (MPHI) as at December 31, 2014 and
2013. MPHIs economic interest in MPIC is reduced from 55.8% to 52.1% as at
February 26, 2015 as a result of the overnight placement on February 9, 2015 (see Note 39 of the
attached 2014 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 utilities, toll roads, electricity distribution, healthcare services and light rail. 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 contained in Note 2 of the attached 2014 Audited Consolidated
Financial Statements.
(B) Business of the Issuer
For management purposes, the Company is organized into the following segments based on
services and products:
Water utilities, which relate 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 bulk water 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 Manila North Tollways
Corporation (MNTC) and Cavitex Infrastructure Corporation (CIC), and an associate,
Tollways Management Corporation (TMC), and MPIC's associate, Don Muang Tollway
Public Ltd (DMT).
Power distribution, which primarily relates to the operations of Manila Electric Company
(MERALCO) in relation to the distribution and supply of electricity. The investment in
MERALCO is held primarily through a joint venture, Beacon Electric Holdings, Inc. (Beacon
Electric).
Healthcare, which primarily relates to operations and management of hospitals, nursing and
medical schools and such other enterprises that have similar undertakings.
Rail, which primarily relates to operations and maintenance of the Light Rail Transit (LRT)
and construction of the extension by Light Rail Manila Corporation (LRMC) and ticketing
services by Automated Fare Collection Services, Inc (AFCSI).
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, 2014 (in Php Millions)
Water
Utilities
Total revenue from external sales
MPIC's share in the Core Income
Operating companies contribution (%)
Toll
Operations
Healthcare
Power
Distribution
Rail
Total
HO Expense
and Interest Consolidated
18,363
8,641
6,828
33,832
33,832
4,376
2,239
465
3,027
(28)
10,079
(1,571)
8,508
43%
22%
5%
30%
0%
100%
Non-recurring income (charges)
(278)
(92)
(33)
(55)
(52)
(510)
(58)
(568)
Segment Income (Loss)
4,098
2,147
432
2,972
(80)
9,570
(1,629)
7,940
The revenues of the Group were primarily derived from sales within the Philippines.
In 2013, MPIC made its first offshore investment, through its wholly owned subsidiary MPIC
Infrastructure Holdings Limited (MIHL), by acquiring a 25% ownership in FPM Infrastructure
Holdings Limited (FPM Infra) which holds a 29.45% stake in a Thai toll road operator, DMT. In
2014, MPIC acquired, through MIHL, from FPC the remaining 75% ownership in FPM Infra.
Accumulated equity in net earnings in DMT amounted to 83.9 million as at December 31, 2014.
Except as stated in the succeeding paragraphs and in the discussion for each of the 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 the
registrant for the past three years.
(B.1) Water Utilities

Business Development
MPIC operates its water utilities business through MWHCI. 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 56.80% as at December 31, 2012 and at 52.80%
as at December 31, 2013 and 2014. The reduction in effective ownership in Maynilad resulted
from MCNK JV Corporations (MCNK) entry as investor in MWHCI. On February 13, 2013,
MCNK completed and fully paid its total subscription of 678,470,727 common shares of stock of
MWHCI at a total subscription price of 10,400.0 million giving it 21.54% equity interest in
MWHCI. MCNK is 90.0% owned by Marubeni Corporation, a company incorporated in Japan

and 10% owned by MAPL Holdings B.V., a company incorporated in the Netherlands.
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
the Concession Area.
MPICs bulk water supply services are operated through its wholly owned subsidiary, MPWIC.
MPWIC has an effective interest of 20% in Cebu Manila Water Development, Inc. (CMWD)
through its direct ownership of 39% in Manila Water Consortium Inc. (MWCI). In 2013, CMWD
signed a 20-year Water Purchase Agreement (WPA) for the supply of 18 million liters per day for
the first year and 35 million liters per day of water for the second to 20th year. CMWD made its
initial delivery of water in January 2015.
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 certain part of Bulacan
under concession agreements granted by the Philippine government for 25 years to 2035.
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 13 of the
2014 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 Companys results of operations and financial
condition.
Effect of Existing or Probable Governmental Regulations on the Business
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 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. for the basic water charge. While there has been a two (2)-year delay in
implementing an adjustment in the average 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.
Customers
The water business of the Company 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 miniboosters. As at December 31, 2014, Maynilad's network consisted of around 7,458 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.
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 of the 2014 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. The
Companys regular maintenance procedures involve regular disinfection of service reservoirs and
mains and replacement of corroded pipes. The Company 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 the majority of its toll road assets through MPTC. MPTC holds a 75.60%
effective interest in MNTC, which holds the concession rights to construct, operate and maintain
the North Luzon Expressway (NLEX). Beginning 2013, MPTC also consolidates Cavitex
Infrastructure Corporation (CIC), which holds the concession rights for the operation and
maintenance of the Manila-Cavite Toll Expressway (CAVITEX). MPTC consolidates CIC by
virtue of a Management Letter-Agreement dated December 27, 2012, for the management of CIC
by MPTC. Under the Management Letter-Agreement, management of CIC by MPTC commenced
on January 2, 2013 and will continue until the issuance of the New CIC Shares in favor of MPTC.
MNTC and CICs 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 13 to the 2014 Audited Consolidated Financial Statements).
MNTC holds the concession for the largest toll road in the Philippines, the NLEX Project. The
NLEX currently spans approximately 84 kilometers and services an average of 185,000 vehicles
per day. The NLEX is the main infrastructure backbone that connects Metro Manila to 15 million
people in Central and Northern Luzon. MNTC 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.
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.

Necessary government approvals in relation to the operation of the toll roads have been secured
and documented in the related concession agreements. However, the following toll projects are
still in the process of obtaining necessary Philippine Government approvals:
Subic-Clark-Tarlac Expressway (SCTEX) Concession Agreement. On February 9, 2015,

MNTC, received the Notice of Award from the Bases Conversion and Development
Authority (BCDA) for the management, operation and maintenance of the 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. On February 26, 2015, MNTC
and BCDA signed the Business Agreement (BA), marking the culmination of BCDAs effort
to privatize the management, operation and maintenance of the SCTEX. The BA binds
MNTC and BCDA to a contract for the management, operation and maintenance of SCTEX
until the end of the SCTEX concession period (October 30, 2043). The privatization provides
the opportunity to realize MNTCs vision of integrating the operation of NLEX with SCTEX,
thereby offering seamless expressway travel to motorists. The effectivity of the BA is subject
to conditions precedent, among which is the TRB approval and signing of the Supplemental
Toll Operation Agreement (STOA). On February 26, 2015, the Business Operating
Agreement was signed with full takeover of the SCTEX operation expected by second quarter
of 2015.
NLEX-SLEX Connector Road Project. The Connector Road Project was approved by the
National Economic and Development Authority (NEDA) Board on February 20, 2015 as an
unsolicited proposal under the Build-Operate-Transfer Law. This is expected to trigger the
commencement of the Swiss Challenge within 2nd quarter of 2015. MPTDC is still awaiting
Philippine Government information on the implementation mode of the Connector Road
Project..

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 MPIC is the ability of the toll road businesses to secure the tariff adjustments under the
concession agreements that govern their concessions.
The concession agreements establish a toll rate formula and adjustment procedure for setting the
appropriate toll rate. Subject to the Toll Regulatory Board validating the calculation of the toll
rate adjustment in accordance with the formula, toll rate adjustment is scheduled every two
calendar years for the NLEX and every three calendar years for the CAVITEX.
As at February 26, 2015, MPTC continues to await approval by the Government of toll rate
adjustments for R1 of CAVITEX and NLEX, which should have been effective from
January 1, 2012 and January 1, 2013, respectively and January 2015 for both.
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.
Distribution
Tollroads revenues are from manual toll fee payment, electronic toll collection and badges/cards
for buses, trucks and jeepneys.
Competition
While MNTC and CIC were granted sole right to operate and maintain toll roads under their
respective concession agreements with the Philippine Government (see Note 13 to the 2013
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 roads have
limited capacity and narrow lanes. They are controlled by traffic lights and stop signs and 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.
The Operation & Maintenance (O&M) of the NLEX and Segment 7 is undertaken by TMC
pursuant to the O&M Agreement between MNTC and TMC. This agreement shall be effective
for the entire concession period. TMC, of which MPTC owns 46%, oversees the day-to-day
operations of the NLEX, including securing toll collection, depositing of funds to MNTCs
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, MNTC engaged the services of Easytrip Services Corporation (ESC) to
assist MNTC in increasing the usage of the electronic toll collection facility along the NLEX.
ESC became a related party of the Company 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, MNTC 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 under
Note 21 to the 2014 Audited Consolidated Financial Statements).
Costs and effects of compliance with environmental laws
Prior to the commencement of construction activities, the grantee must obtain an environmental
compliance certificate (ECC) from the Department of Environment and Natural Resources. 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.
MNTC has a dedicated team that regularly monitors compliance with its ECCs and ensures
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. MNTC
submits an annual safety and health report to its creditors detailing the activities and monitoring
results, as well as other significant related, undertaken throughout each year in relation to
MNTCs compliance with legal and statutory environmental requirements.
Status of any publicly announced product or services
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.
The NLEX Harbour Link and Citilink projects, together with expansion of the CAVITEX, would
see MPTC invest approximately 31 billion over the next few years to complete construction of
this vital road infrastructure. MPTC and MPIC would fund this sum using internal resources and
external debt.
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 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, First Pacific transferred its 75% shareholding in FPM Infra to MPIC for a
consideration of approximately US$101.25 million. FPM Infra became 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 21.9kilometer 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 4.0 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.
(B.3) Power Distribution

Investment in MERALCO is primarily held through Beacon Electric, a special purpose company
jointly owned with MPIC and PLDT Communications and Energy Ventures, Inc. As at
December 31, 2013, Beacon Electric owns approximately 49.96% of MERALCO. However, in
June 2014, MPIC entered into a Share Purchase Agreement with Beacon Electric for the sale of
the latters 56.35 million shares, comprising approximately 5%, in MERALCO for an aggregate
consideration of 13.24 billion. Thus, the Companys aggregate effective interest in MERALCO
after this transaction increased from 24.98% to 27.48%.
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. MERALCO has a unit for its participation in retail
electricity supply or RES. The MERALCO local Retail Electricity Supplier, otherwise known as
MPower, is a business unit within Meralco.
MERALCO was among the first entrants to the Performance-Based Regulation (PBR). Ratesetting 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 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 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 third RP
is from July 1, 2011 to June 30, 2015.
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
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
Distribution of electricity at its usable voltage to end-consumers is performed by investor-owned
electric utilities, notably Meralco and, its subsidiary, Clark Electric Distribution Corporation
(CEDC), 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
CEDC have no significant competition in their franchise areas.
As MERALCO broadens the scope of its activities to encompass power generation and retail
electricity sales it will become increasingly exposed to market competition.
Distribution
Power is distributed through network facilities which consists of substations, circuits and
distribution transformers.
Source and availability of raw materials
The principal sources of power (in MWh) of Meralco and CEDC and their relative contribution in
2014 are as follows:
First Gas Power Corporation (Sta. Rita) and FGP
Corp.(San Lorenzo) Natural Gas
South Premiere Power Corporation (Ilijan) Natural Gas
San Miguel Energy Corporation (Sual) Coal
AES Philippines (Masinloc) Coal
Quezon Power Philippines Limited Co. Coal
SEM-Calaca Power Corporation (Calaca) Coal
Therma Luzon, Inc. (Pagbilao) Coal
Philippine Electricity Market Corporation
Others Various
Total
28.47%
22.79%
9.19%
9.19%
8.88%
8.71%
7.02%
2.81%
2.94%
100.00%
(B.4) Healthcare
MPICs Hospital group comprises eight full-service hospitals 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.
This division comprises five hospitals in Metro Manila, and one in each of Central Luzon,
Bacolod City and Davao City.
In addition to the traditional hospital services, MPIC in 2013 made its first investment in a nonhospital-based diagnostic center, Megaclinic at SM Megamall in Metro Manila.
AHI received on December 9, 2013 the Joint Commission International (JCI) accreditation,
validating AHIs commitment to provide world-class patient-centered health care services. AHI
focused its efforts in pursuing the Gold Seal of Approval of the JCI, the worlds most prestigious
accreditation body for health care institutions. The Joint Commission helps organizations all over
the world in delivering the highest quality of care and achieve maximum performance by
providing strict standards and continuous patient care and patient safety solutions.
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
Holdings, Inc. (MPHHI, formerly Neptune Stroika Holdings, Inc.). 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 6.5 billion by way of an
Exchangeable Bond which will be exchanged into a 25.5% stake in MPHHI in the future, subject
10
to certain conditions. The proceeds from the bond will be used by MPIC for continuing
investments in infrastructure projects.
Customers
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 Metro Manila.
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 tertiary hospitals located in major cities and
regions where the hospitals operate: (a) MMC in Makati, Metro Manila; (b) CSMC in San Juan,
Metro Manila; (c) OLLH in Sta. Mesa, Manila; (d) AHI in Southern Manila; (e) DLSMC in
Quezon City, Metro Manila; (f) CLDH in Tarlac Central Luzon; (g) RMCI in Bacolod City; and
(h) DDH in Mindanao. However, increasing health awareness creates unsatisfied demand in the
industry.
The Company uses its skill as a corporate manager to enhance operating efficiency and streamline
the business models of its hospitals. Additionally, the Company continues to realize economies of
scale through group purchasing and the sharing of technical and human resources.
On April 13, 2012, Colinas Verdes Hospital Managers Corp. (CVHMC) entered into a
Memorandum of Agreement (MOA) with Meralco for the operation and management of the
Meralco Corporate Wellness Center (Wellness Center), an outpatient diagnostic and consultation
center for its employees and their dependents. In accord of the contract, CVHMC agreed to take
steps to improve healthcare services, expand diagnostic services, enhance customer services
levels, increase operational efficiencies, rationalize equipment upgrade and renovate and improve
infrastructure. Income recognized for this arrangement in 2014 and 2013 amounted to a total of
42.7 million and 41.1 million included under the hospital revenue account. The total revenue
comprises a retainers fee, pharmacy handling and manpower and administrative reimbursement
plus margin.
(B.5) Rail
The rail segment is a new segment beginning 2014. Companies under this segment, LRMH,
LRMC and AFCSI are still under the pre-operating stage.

On March 31, 2014, Automated Fare Collection Systems, Inc. (AFCS), in which MPIC has a 20%
shareholding, signed a 10-year concession agreement with the Department of Transportation and
Communications (DOTC) to build and implement a new Automated Fare Collection System
project for the LRT and MRT lines in Metro Manila. This project will offer a revolutionary new
solution for the mass transit lines and enable the creation of a new form of electronic payment
11
similar to the Octopus card in Hong Kong or the EZ link system in Singapore. The payment
system has the potential to move into toll roads and parking facilities, creating an integrated
solution for Metro Manilas commuters and eventually an electronic payments ecosystem for the
country. AFCS targets to deliver the new electronic payment system initially for LRT Lines 1, 2
and the MRT Line 3 by the second half of 2015.
On October 2, 2014, LRMC, in which MPIC effectively has a 55% shareholding, signed together
with the DOTC and the Light Rail Transit Authority (LRTA) the 32-year Concession Agreement
for the 65-billion Light Rail Transit Line 1 Cavite Extension and Operations & Maintenance
Project. LRMC was formally awarded the project by the DOTC and LRTA following the
submission of a lone bid with a premium of 9.35 billion.
The concession agreement for the LRT Line 1 Project sets out the terms and conditions on how
the Grantor will regulate the operations and maintenance activities of the Concessionaire
throughout the concession period. Likewise, the fare to be charged to the users of the LRT 1 Line
must be approved by the Grantors (or other Government Authority having jurisdiction over fare
levels).
The tariff increase announced by Government in January 2015 is insufficient to reach the opening
fare in the LRT Line 1 Concession Agreement. This increases risks to achieving financial close
and hence formal handover.
(B.6) 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 the change in name from Metro Pacific Corporation to Neo Oracle
Holdings, Inc., shortened corporate life until December 31, 2013 and 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-forasset swap arrangements, negotiation for discounts on principal and waiver of interests and
penalties.
(C) Registrants present employees
As at December 31, 2014, the Parent Company has a total headcount of 56 employees
(Administrative: 45, Clerical: 11), who are neither unionized nor covered by special incentive
arrangements. The Parent Company expects to decrease its headcount to 50 in the next twelve months
with the transfer of the hospital management and finance team to MPIC's hospital holding company,
MPHHI.
12
(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
MPIC has taken steps to increase its presence in Southeast Asia through its equity investments in
Thailand's DMT and Vietnam's CII B&R, while remaining committed to its core busienss in the
Philippines. MPICs geographic focus remains to be predominantly the Philippines within which
its management team has extensive experience.
Prior to making a new investment, any business to be acquired is subject to an extensive due
diligence including financial, operational, regulatory and risk management. 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 - to varying degrees - a partnership approach with MPIC taking a
controlling position and key operating partners providing operational and technological input and
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 will
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.
(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 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 Statement of Financial Position 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 the MPIC
Audit and Risk Management Committee, together with MPICs designated Chief Risk
Officer, and each of the respective operating companies board of directors.
Regulatory. The majority of our 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 rail. Each of these businesses has concession or
franchise agreement which involve a degree of operating performance obligation in order to
13
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.
o
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.
Competition and Market. Competitive and market-driven demand risks are most pronounced
in Meralco, MPTC and the Healthcare group.
o
Meralco carries a degree of market risk and its returns in the short term may be
impacted by consumers who elect to self-generate and disconnect from the
distribution grid. MPIC is 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 will take on risks associated with buying and selling power
on its own account instead of on a pass through basis. Meralco has long prepared for
this and has an experienced management team already in place to lead this new
business. Meralco is now also invested in power generation with attendant demand
volume and price risks and fuel source price and supply risks. The primary mitigants
are contracting to match demand and supply side volumes where possible and
employing highly experienced power market professionals to manage any open
positions by trading in the market.
At MPTC, MPIC sets tariff on new road projects based on traffic projections agreed
with the regulator. Rising fuel prices, alternative means of transport and existing or
prospective alternative routes are all factors that can affect the number of vehicles
that use our roads.
MPIC 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, even with the prior factors
included in the assessment, 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. MPIC mitigate this risk by ensuring MPIC knows our target
market and scale our improvements to their ability to pay. The pace of medical
innovation is accelerating requiring 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.
The water company 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
14
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 arising indirectly
from typhoons, the business has experienced periods of lower water supply than allowed for
in its concession. MPIC have worked to moderate our reliance on Angat by developing the
Putatan Water Treatment Plant. However, our regulator does not now wish us to invest further
in alternative water sources and this means the logical way to mitigate our supply side risk is
now largely prohibited to us.
(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 to the 2014 Audited Consolidated
Financial Statements). The Board of Directors of each 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 its Regulator.
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 Company's 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 PSE on a volume weighted 30
trading day average calculation. Meralcos share price would have to decline by 54.35% from
its price as at December 31, 2014 before Beacon Electric would be required to top-up
collateral with cash or pay-down debt.
Item 2. Description of Properties

Toll Roads Segment. MNTC and CIC, owns 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.
MNTC 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.
Water Utilities 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
15
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 to the 2014 Audited Consolidated Financial Statements.
Healthcare Segment. The Company 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:
Makati Medical Center is a multi-specialty tertiary medical centre situated in the central
business district of Makati, Metro Manila.
Asian Hospital and Medical Center is a hospital located in Alabang, Muntinlupa in Southern
Metro Manila.
De Los Santos Medical Center is a mid-market teaching and training hospital in Quezon City,
the largest city in Metro Manila.
Davao Doctors Hospital is considered to be the largest and one of the best medical facilities
offering modern diagnostic, therapeutic and intensive care services in Southern Philippines.
Riverside Medical Center, 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.
Central Luzon Doctors Hospital 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) and CVHMC entered into
lease agreements with Servants of the Holy Spirit, Inc. and Roman Catholic Archbishop of Manila for
the management and operation of OLLH and CSMC, respectively. Each of these lease agreements is
for a period of 20 years, renewable for successive periods of 10 years upon the mutual consent of both
parties. 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. The schedule of fixed
and variable monthly rent is provided for in Note 33 to the 2013 Audited Consolidated Financial
Statements.
Please refer to Note 14 in the accompanying 2014 Audited Consolidated Financial Statements for the
carrying values of the property and equipment of the Group.
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 to the 2014 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.
16
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
(1) 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 year 2012, 2013, 2014 and the 1st quarter of 2015 are set out
below. The share price as at the close of business on February 28, 2015 was P
=5.40.
Quarter
Low
1st
2nd
3rd
4th
3.48
3.85
4.06
4.00
1st
2nd
3rd
4th
4.43
4.60
4.40
4.24
1st
2nd
3rd
4th
4.06
4.70
4.77
4.22
1st
4.59
High
2012
4.34
4.60
4.32
4.58
2013
5.64
6.33
5.69
4.95
2014
4.77
5.40
5.32
5.24
2015
5.53
17
(2) Holders
The total number of stockholders as at February 28, 2015 is 1,333
Top 20 Stockholders as at February 28, 2015
Number of
Shares
Percent
14,522,948,170
52.13%
PCD Nominee Corporation (Non-Filipino)
9,431,034,166
33.85%
PCD Nominee Corporation (Filipino)
3,868,205,726
13.88%
Albert F. Del Rosario and/or Margaret

Gretchen V. Del Rosario
6,500,000
0.02%
Albert F. Del Rosario
5,016,624
0.02%
Victorico Paredes Vargas
3,500,001
0.01%
Lucio W. Yan and/or Clara Y. Yan
2,850,000
0.01%
Amado R. Santiago III
2,500,001
0.01%
Alberto B. Carlos
1,000,000
0.00%
10
Raul L. Ignacio
1,000,000
0.00%
11
Ferdinand G. Inacay
1,000,000
0.00%
12
Tessa G. Acosta
1,000,000
0.00%
13
Baby Lea M. Wong
1,000,000
0.00%
14
First Life Financial Co., Inc.
830,000
0.00%
15
Berck Y. Cheng
650,000
0.00%
16
J. Luigi L. Bautista
650,000
0.00%
17
Edwin U. Lim
600,000
0.00%
18
Ronaldo C. Padua
600,000
0.00%
19
Aurora Canape
500,000
0.00%
20
Eric U. Lim
500,000
0.00%
Marjorie Ann Lim Lee
500,000
0.00%
Helen S. Uy
500,000
0.00%
Rank
Stockholder Name
Metro Pacific Holdings, Inc.
18
(3) 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 1.5x; 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 2012, 2013 and 2014:
Year
2012
Rate per
Common Share
=0.015
P
=0.012
P
P0.020
=
=0.015
P
=0.022
P
2014
=0.026
P
=0.040*
P
*Special one-off dividend
2013
Preferred
Dividends
=1.8 million
P
=2.5 million
P
P2.5 million
=
=2.5 million
P
=2.5 million
P
=2.5 million
P
=1.3 million
P
Record Date
Payable Date
3/16/2012
8/28/2012
4/16/2012
9/21/2012
3/18/2013
8/28/2013
4/8/2014
8/29/2014
4/16/2013
9/20/2013
4/30/2014
9/24/2014
12/2/2014
12/18/2014
On February 26, 2015, the BOD approved the declaration of the cash dividends of P
=0.037 per
common share in favor of the Parent Companys shareholders of record as at March 25, 2015
with payment date of April 17, 2015. On the same date, the BOD approved the declaration of
cash dividends amounting to P
=1.25 million in favor of the preferred shareholders.
(4) Recent Sales of Unregistered or exempt Securities

During the last three years, MPIC issued the following shares (either via private placements
and/or conversion of debt to equity) for which exemptions from registration were claimed and
notices of exempt transactions were accordingly filed with the Philippine SEC:
1. 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
(or agreeing to subscribe) to the same number of shares at the offer price or a total of
approximately 8.9 billion.
2. On January 23, 2013, MPIC raised P
=6.12 billion in an overnight placement of 1.33 billion
in new MPIC shares worth P
=4.60 apiece. The shares came from the shareholdings of
MPHI. As a result of this transaction, MPHIs interest in MPIC was reduced from 59.0%
as at December 31, 2012 to 55.8% as at December 31, 2013.
19
The abovementioned notices of exempt transactions were made on the basis of:
1. 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,
exclusively and no commission or other remuneration was paid or given directly or
indirectly in connection with such issuances.
2. 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.
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 and as at December 31, 2014 and 2013 and for the years ended December 31, 2014,
2013, and 2012 included in this Report. Key performance indicators of the Group are as follows:
Operating Revenues
Income before income tax
Net income attributable to owners of the Parent
Company
Core EBITDA
Core income
Non-recurring income (expense)
Core EBITDA margin
Increase
2014
2013
(Decrease)
Audited
Amount
(in Php Millions)
33,832
30,877
2,955
13,782
12,072
1,710
7,940
7,209
731
19,188
8,508
(568)
57%
17,264
7,229
(20)
56%
1,924
1,279
548
1%
%
10
14
10
11
18
>100
2
20
Overview
Highlights for 2014 which had significant impact on the financial results of the Group are as follows:
Benefit from new/increase in investments. The Company benefitted from the following
acquisitions and increase in ownership interest:
o
Increase in equity ownership in MNTC. On January 10, 2014, MPTDC acquired 3.9% of
MNTC from Egis Projects, SA (Egis) for P
=1.5 billion; and on July 18, 2014, entered into an
agreement to acquire an additional economic interest of 4.6% from Egis and Egis Investment
Partners Philippines Inc. (EIP) for P
=1.7 billion. MPICs effective economic interest in MNTC
is now 75.65% from 67.00%.
o Increase in effective ownership interest in Meralco. On June 24, 2014, MPIC entered into a
Share Purchase Agreement with Beacon Electric for the sale of the latters 56.35 million
shares, comprising approximately 5%, in Meralco for an aggregate consideration of P
=13.24
billion. This transaction resulted to an effective increase in ownership in Meralco of 2.5%.
o
Acquisition of FPM Infrastructure. On July 31, 2014, MPIC acquired its 75% shareholding in
FPM Infra from FPC 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, a
major toll road operator in Bangkok, Thailand. Prior to the acquisition , MPICs equity
effective ownership interest in DMT was at 7.36%. Share in equity in net earnings in DMT
amounted to P
=210.0 million for the year ended December 31, 2014.
Impact of change in accounting policy. Beginning January 1, 2014, the service concession asset
of MNTC is amortized on a units of production (UOP) basis. MPTC determined that it is more
appropriate to use the UOP basis for amortizing the service concession asset as the economic
benefit of this asset is more closely aligned with the traffic volume and kilometers travelled for
the segments of the toll road using an open toll collection system and closed toll collection
system, respectively. The change in the method of amortization is also consistent with the toll
segments move to unify the accounting policies of its subsidiaries. This change in accounting
policy resulted in a decrease in amortization expense by P
=131.0 million of the service concession
asset for the period ended December 31, 2014.
Maynilads Redundancy and Right Sizing Program. In line with its strategic goal to improve
operational efficiency, Maynilad offered a Special Opportunity Program (SOP), a redundancy and
right-sizing program in 2014. This program offered a separation package based on the number of
years, or fractions thereof, on a pro-rated basis, of service with Maynilad plus monetary
equivalent of some benefits. Total estimated severance for the separated employees amounted to
=524.0 million, of which, P
P
=263.0 million is paid out of Maynilads funds while the remaining was
paid out of Maynilads retirement plan asset. The reduction in the number of employees resulted
in a curtailment gain of P
=257.3 million.
GICs Investment in the Hospital Group. Although the hospital segment results improved, the
segments contribution to MPICs core income declined with the entry of GIC as an investor in
MPHHI beginning of July 2014. Hospital groups contribution to MPICs core income amounted
to P
=465.0 million for the period ended December 31, 2014, from last years P
=581.0 million
21
Adoption of New Standards and Interpretations

The Company's 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 Accounting Standards
(PAS), Philippine Financial Reporting Standards (PFRS) and Philippine Interpretations of the
International Financial Reporting Interpretations Committee (IFRIC), which became effective on
January 1, 2014. Adoption of new standards did not have a material impact on the Companys
financial results. Please refer to Note 2 to the 2014 Audited Consolidated Financial Statements.
Description of Operating Segments of the Group
As discussed under Item 1 B. Business of Issuer, the Group is organized into six major business
segments based on services and products namely water utilities, toll operations, power distribution,
healthcare, rail 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.
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.
22
2014 versus 2013

MPIC Consolidated Statements of Income
Operating Revenues
Cost of Sales and Services
General and administrative expenses
Interest expense
Share in net earnings of associates and a joint
venture
Interest income
Other income (expense) - net
Provision for income tax
Company
Other comprehensive income (loss)
Total comprehensive income attributable to
owners of the Parent Company
Core income
Increase
2014
2013
(Decrease)
Audited
Amount
(in Php Millions)
33,832
30,877
2,955
13,082
11,845
1,237
6,823
6,261
562
4,301
4,001
300
3,167
2,286
881
(77)
50
615
731
%
10
10
9
7
39
385
604
1,208
7,940
462
554
593
7,209
(17)
9
>100
10
(76)
7,849
384
7,550
(460) (>100)
299
4
8,508
(568)
7,229
(20)
1,279
(548)
18
>100
Revenues
The Companys revenues increased by 10% to P
=33,832 million in 2014, reflecting improved
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 MNTC
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.
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
23
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
Interest expense increased by 7% to P
=4,301 million in 2014 mainly due to additional loans
(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 MNTC.
Share in net earnings of associates and a joint venture
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 and expenses
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.
Consolidated net income attributable to equity holders of the Parent Company
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.
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
24
method investees at an aggregate of P

=506 million in 2013 as compared with current years aggregate
actuarial loss of P
=53 million in 2014.
Core Income attributable to equity holders of the Parent Company
MPICs share in the consolidated core income increased by 18% from P
=7,229 million in 2013 to
=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

=2,239 million in 2014 due to strong traffic growth, increase in effective interest in MNTC
P
and contribution from DMT.
30% increase in contribution from Beacon Electric/Meralco from P

=3,027 million in 2014 mainly due to the 2.5% increase in effective ownership in Meralco
P
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
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.
25
II - Operating Segments of the Group

Water utilities
Maynilad Water Services, Inc.
2014
2013
Increase
(Decrease)
Audited
Amount
(in Php Millions)
Consolidated Statements of Income
Revenues
Costs and Expenses
Interest income (expense) - net
Benefit from (Provision for) income tax
Core Income
Reported Net Income
Core EBITDA
Core EBITDA margin
Capital Expenditure
18,363
7,414
(2,082)
(640)
28
8,777
(522)
8,255
12,857
70%
4,345
16,895
7,147
(2,480)
(739)
407
7,530
(594)
6,936
11,083
66%
5,558
Non-domestic (commercial and industrial)
9
4
(16)
(13)
(93)
17
(12)
19
16
6
(22)
Increase
(Decrease)
Key Performance Indicators

Volume of water supplied (MCM)
Volume of water billed (MCM)
Volume of water billed (MCM) - Consolidated
Non revenue water % (average)
Non revenue water % (period end)
Billed customers (period end)
Customer mix (% based on billed volume)
Domestic (residential and semi-business)
1,468
267
(398)
(99)
(379)
1,247
(72)
1,319
1,774
4%
(1,213)
2014
701.0
463.2
473.4
33.9%
32.9%
1,190,062
2013
724.2
443.8
453.3
38.7%
35.4%
1,129,497
Amount
(23.2)
19.4
20.1
(4.8%)
(2.5%)
60,565
%
(3)
4
4
(12)
(7)
5
80.1%
79.7%
0.3%
19.9%
20.3%
(0.3%)
(2)
Operational highlights
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
26
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%.
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.
27
Revenues
2014
Water Services
Sewer Services
Other Contract & Services
Total Revenues
2013
Increase
(Decrease)
Audited
Amount
(in Php Millions)
13,587
1,058
14,645
2,909
385
3,294
399
25
424
16,895
1,468
18,363
%
8
13
6
9
Total revenues for the year rose 9% to P

=18,363 million from P
=16,895 million in 2013 due to the
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.
28
Toll Roads
Metro Pacific Tollways Corporation

Net toll revenues
Cost of Services
Operating expenses
Share in earnings of an associate
Core Income
Reported net income
Reported net income attributable to equity holders
of MPTC
Core EBITDA
Core EBITDA margin
Capital Expenditure
Increase
2014
2013
(Decrease)
Audited
Amount
%
(in Php Millions)
8,641
3,533
819
(1,114)
290
270
952
2,154
(92)
2,779
2,062
8,154
3,305
730
(944)
247
198
731
1,963
38
2,784
2,001
487
6
228
7
89
12
170
18
43
17
72
36
221
30
191
10
(130) (>100)
(5)
(0)
61
3
5,788
67%
2,592
5,540
68%
401
248
(1%)
2,191

Average Daily Vehicle Entries - NLEX
Average Daily Vehicle Entries - CAVITEX
Average Kilometers Travelled - NLEX
Average Daily Vehicle Entries - DMT
2014
185,297
110,393
3,505,833
80,698
2013
173,067
102,280
3,272,638
76,842
4
(1)
>100
Increase
(Decrease)
Amount
%
12,230
7
8,113
8
233,195
7
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 MNTC 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
29
additional issues surrounding the tariff regime for the Harbour Link are constraining continued and
needed expenditure on our road construction.
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 MNTC'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, MNTC 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, MNTC 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. MNTC 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 CebuCordova 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.
30
Net Toll Revenues

Net toll revenues amounted to P
=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.
Costs of services and Operating expenses
Total cost and expenses increased by 8% to 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 MNTC and TMC. Toll operation and maintenance costs increased by
=338 million in 2014. The increase in toll O&M costs is partially offset by the decrease in
P
amortization of service concession assets from P
=757 million in 2013 to P
=646 million in 2014. The
decrease in amortization expense resulted from MNTCs 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 MNTC.
Core income
Core income increased by 10% to P
=2,154 million mainly due to the 8.5% increased shareholding in
MNTC and lower amortization of Concession asset from change in amortization method to units-ofproduction 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 attributable to equity holders of MPTC
Reported Net income increased by 3% in 2014 mainly due to increase in toll revenues from higher
traffic.
31
Power
2014
Manila Electric Company
Revenues
Expenses
Core Income
Reported net income attributable to equity holders
of MERALCO
Capital Expenditure
2013
Audited
Amount
(in Php Millions)
298,636
(32,300)
266,336
274,846
(34,656)
240,190
17,023
1,105
18,128
18,053
12,350
17,211
10,187
842
2,163
%
(11)
(13)
6
5
21
Increase
(Decrease)

Volume Sold (in mln kwh)
System Loss (12-month moving average)
Average Distribution Revenue per kWh YTD
Increase
(Decrease)
2014
35,160
6.49%
1.60
2013
34,084
6.92%
1.65
Amount
1,076
(0.43%)
(0.05)
%
3
(6)
(3)
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
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.
32
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.
Healthcare
2014
Healthcare Group
Gross Revenues
Expenses
Core EBITDA
Core Income
Reported Net Income
2013
Audited
Amount
(in Php Millions)
12,493
1,603
14,096
10,144
1,238
11,382
2,656
290
2,946
879
128
1,007
886
125
1,011

Occupancy rate (%) - Standard Beds
Total beds available
No. of Patients In patient
No. of Patients Out patient
No. of Accredited Doctors
No. of Enrollees (schools) - average YTD
Increase
(Decrease)
2014
67%
2,134
124,467
1,849,301
5,367
4,228
2013
72%
2,021
115,570
1,626,017
5,418
3,897
Increase
(Decrease)
Amount
(5%)
113
8,897
223,284
(51)
331
%
13
12
11
15
14
%
(7)
6
8
14
(1)
8
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
33
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.
34
MPIC Consolidated Statement of Financial Position

Assets
The following table summarizes the individual increase (decrease) of consolidated asset accounts.
Audited
2014
ASSETS
Current assets
Cash and cash equivalents and short-term
deposits
Restricted cash
Receivables
Due from related parties
Other current assets
Asset held for sale
Noncurrent Assets
Restricted cash
Receivables
Available for sale financial assets
Investments and advances
Goodwill
Service concession assets
Property use rights
Property and equipment
Other noncurrent assets
Increase
Audited
(Decrease)
%
2013 % Amount
%
(in Php Millions)
25,758
2,367
3,676
140
2,458
34,399
1,370
35,769
72
7
10
7
96
4
100
15,263
1,827
3,749
229
3,821
24,889
24,889
61
7
15
1
16
100
100
10,495
540
(73)
(89)
(1,363)
9,510
9,510
69
30
(2)
(39)
(36)
38
38
889
263
2,162
65,175
18,308
98,260
608
7,368
5,210
198,243
1
33
9
50
4
3
100
593
65
2,770
48,854
18,308
94,540
649
6,859
3,057
175,695
2
29
9
54
4
2
100
889
100
(330) (56)
(65) (100)
(608) (22)
16,321
33
3,720
4
(41)
(6)
509
7
2,153
70
22,548
13
Cash and cash equivalents and short-term deposits (Increase) Mainly due to the proceeds from
MNTC's P
=7.0 billion Bond offering and from GICs equity infusion into MPPHI of P
=3.7 billion
for a 14.4% stake in MPHHI. In addition, GIC also advanced to MPIC P
=6.5 billion as
consideration for the exchangeable bond that can be exchanged into a 25.5% stake in MPHHI in
the future.
Restricted Cash (Current) (Increase) Represents amount set aside to cover semi-annual
principal and interest payments of certain long-term debt.
Receivables current portion and non-current portions (Decrease) Following the restructuring
of Landco in preparation for its eventual sale, MPIC classified all interests in Landco as Assets
35
Held for Sale. Interests in Landco comprise of common shares in Landco, receivable from
Landco and ABHC and preferred shares (previously classified as Receivables) that were
converted to Landcos common shares in 2014 (see Note 33 to the 2014 Audited Consolidated
Financial Statements).
Due from related parties current portion and non-current portions (Decrease) Settlement of
intercompany advances for the period.
Other current assets (Decrease) The decrease is mainly due to the reclassification of
investments in UITF from Available-for-sale financial assets to short-term deposits account. As
at December 31, 2014, the fund comprises of extremely short-term money market securities, time
and special deposit accounts with average maturity of less than 30 days.
Available-for-sale financial assets (Decrease) Mainly due to the sale of AFS financial asset
(NEPSCC) in January 2014 and reclassification of the 19% Landco investment to Assets held for
sale.
Restricted Cash (Noncurrent) (Increase) Restricted cash classified as part of noncurrent assets
pertains to cash held in escrow account in relation with the construction contract for the NLEX
Segment 10 (see Note 33 to the 2014 Audited Consolidated Financial Statements).
Investments and advances (Increase) Increase substantially relates to the acquisition of

additional interests in Meralco and DMT. MPIC acquired 5% of direct interest in Meralco from
Beacon Electric for a gross consideration of P
=13.2 billion. MPIC also increased its effective
ownership interest in DMT from 7.36% to 29.45% by acquiring 75% interest in FPM Infra for a
total purchase cost of approximately P
=4.3 billion.
Service concession assets (Increase) Mainly due to the additional capital expenditure for the
year, net of amortization. Additions to toll service concession asset included civil works
construction on MNTCs Segments 9 and 10 and CAVITEXs Modified Zapote Interchange and
fixed operating equipment design, supply and installation for the toll collection system migration.
Additions in 2014 also include pre-construction costs of Segment 8.2 of Phase II of the NLEX
and capitalized borrowing costs amounting to P
=335.9 million. Additions to the water service
concession assets for substantially relate cost of rehabilitation, additional constructions and to the
additional concession fees pertaining to the drawn portion of the MWSS loans relating to new
projects.
Property use rights (Decrease) Represents the intangible asset of CVHMC and EMHMC
acquired through business combinations where the legal forms of the arrangements are leases.
Decrease pertains to amortization for 2014.
Property and equipment, net (Increase) Increase pertains to additional property and equipment
for the year, net of depreciation.
Other noncurrent assets (Increase) Mainly due to the capitalized deferred project cost incurred
for the service concession relating to the LRT Line 1 Project. As at December 31, 2014, the
deferred project costs included P
=105.0 million of transaction advisory fee paid to Development
Bank of the Philippines and International Finance Corporation and P
=935.0 million as 10% of the
total bid amount for the project (see Note 33 to the 2014 Audited Consolidated Financial
Statements).
36
Liabilities and Equity

The following table summarizes the individual increase (decrease) of consolidated liability and equity
accounts.
Audited
2014
Audited
2013
Increase
(Decrease)
Amount
%
(in Php millions)

Current Liabilities
Accounts payable and other current liabilities
Income tax payable
Due to related parties
Current portion of:
Provisions
Service concession fees payable
Long-term debts
Noncurrent Liabilities
Noncurrent portion of:
Provisions
Long-term debts
Other long-term liabilities
Deferred tax liabilities
Equity
Capital stock
Additional paid-in capital
Equity reserves
Retained earnings
Other comprehensive income reserve
Total equity attributable to owners of the
Parent Company
Non-controlling interest
12,049
254
7,279
41
1
25
13,476
260
93
59
1
-
5,545
500
3,573
29,200
19
2
12
100
4,677
603
3,512
22,621
21
3
16
100
868
(103)
61
6,579
19
(17)
2
29
228
7,271
57,494
6,019
4,228
75,240
10
76
8
6
100
312
7,909
47,536
5,152
3,774
64,683
12
74
8
6
100
(84)
(638)
9,958
867
454
10,557
(27)
(8)
21
17
12
16
26,096
42,993
6,245
27,525
836
25
41
6
27
1
26,076
42,933
2,643
21,882
927
28
45
3
23
1
103,695
100
94,461
100
25,877
18,819
(1,427) (11)
(6)
(2)
7,186 >100
20
60
3,602 >100
5,643
26
(91) (10)
9,234
10
7,058
38
Accounts payable and other current liabilities - (Decrease) Due to lower trade payables in MPTC
and Maynilad and lower accrued construction cost as Maynilad experienced delays in the progress
of its capital expenditure due to right of way issues and difficulty in acquiring land for sewage
treatment plants.
Due to related parties (Increase) Included the remaining payable to Beacon Electric amounting
to P
=7.2 billion as at December 31, 2014 for the acquisition of a 5% direct interest in Meralco.
37
Provisions current and noncurrent portions (Increase) Increase resulted from recognition of
additional provisions and MPTCs periodic provision for heavy maintenance partially offset by
payments made during the period (see Notes 17 and 33 to the 2014 Audited Consolidated
Financial Statements).
Service concession fees payable current and noncurrent portions (Decrease) Decrease
represents actual payment of Maynilads concession fees.
Long-term debt current and noncurrent portions (Increase) Mainly due to MNTCs
=7.0 billion Bond issuance in March 2014, MPTDCs P
P
=3.3 billion debt for the acquisition of
additional 8.5% effective interest in MNTC and AIF's debt drawdown of Baht 2.1 billion loan
used to partially finance acquisition of 75% shareholding in FPM Infrastructure.
Other long-term liabilities (Increase) Mainly due to the unpaid subscription to AFCS amounting
to P
=203.2 million and interest payable amounting to P
=143.0 million which represents the present
value of the interest due on the Exchangeable Bond issued to GIC.
Deferred tax liabilities (Increase) Increase pertains to deferred tax liabilities arising from
business combination and concession asset accounting.
Capital stock and Additional paid-in capital (Increase) Minimal increase resulting from
employees' exercise of their stock options under the ESOP.
Equity reserves (Increase) Increase is attributable to gain on dilution of interest in MPHHI

partially offset by the premium on acquisition of additional interest in MNTC.
Retained earnings (Increase) Attributable to the net income earned for the period, net of
dividends declared in 2014.
Other comprehensive income reserves (Decrease) Due to the recycling of the unrealized fair
value gain on AFS financial asset from equity to net income as the Company realized the gain
arising from the sale of NEPSCC shares in 2014.
Non-controlling interest (Increase) Resulted mainly from adjustment made in the noncontrolling interest with the entry of GIC as investor in MPHHI.
38
Liquidity and Capital Resources

The following table shows a summary of the Groups audited statements of cash flows for the years
ended 2014 and 2013 as well as the consolidated capitalization as at December 31, 2014 and 2013:
Audited
2014
2013
Increase (Decrease)
Amount
%
(in Php Millions)

Cash Flows
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
Net increase in cash and cash equivalents
Capital expenditures
Capitalization
Long-term debt net of current portion
Current portion of long-term debt
Total
Total equity attributable to owners of the Parent
Company
Cash and cash equivalents
Short-term deposits
15,185
(19,027)
9,931
6,089
8,186
15,871
(14,521)
1,181
2,531
7,138
(686)
4,506
8,750
3,558
1,048
(4)
31
(>100)
141
15
57,494
3,573
61,067
25,877
47,536
3,512
51,048
18,819
9,958
61
10,019
7,058
21
2
20
38
103,695
94,461
9,234
10
17,725
8,033
11,636
3,627
6,089
4,406
52
>100
As at December 31, 2014, MPICs consolidated cash and cash equivalents and short-term investments
totaled P
=25,758 million, an increase of P
=15,263 million as at
December 31, 2013.
Principal sources of the consolidated cash and cash equivalents in 2014 were cash inflows from
operating activities amounting to P
=15,185 million and financing activities amounting to
=9,931 million. Further details are provided below.
P
Operating Activities
MPICs consolidated net operating cash flow in 2014 posted a 4% decrease from P
=15,871 million to
=15,185 million due to net outflow in working capital with the settlement of current liabilities. The
P
decrease in operating cash flows by 4% was experienced despite the improvement in net income.
Improvement in net income does not necessarily translate to improvement in operating cash flow as
the consolidated net income included share in net earnings of the associates and joint ventures. While
the share in equity in net earnings of the associates and joint venture increased by P
=881 million,
dividends received amounted to P
=533 million.
A large portion of the Groups cash flow from operating activities is generated by the water utility
which accounted for 54% and 55% of the Groups total revenues in 2014 and 2013, respectively.
Revenues from the toll roads business accounted for 26% in 2014 and 2013. Hospital business
accounts for the remaining 20% and 19% in 2014 and 2013, respectively.
39
Investing activities
Net cash used by investing activities amounted to P
=19,027 million. Aside from the additional
investments in short-term deposits and AFS, below are the significant investing activities made during
2014:
Investments in equity method investees (associate and joint venture) - The Company invested
in the following entities during 2014 (see Note 11 to the 2014 Audited Consolidated Financial
Statements):
AFCSI - MPIC's investment in AFCSI paid for in cash, amounted to P

=300.0 million,
representing capital infusion in 2014.
Easytrip Services Corporation (ESC) - On June 30, 2014, MPTDC acquired equity
interest equivalent to 50% plus one share of the capital stock of ESC through a
combination of subscription to a total of 87,000 new shares of ESC and purchase of
13,001 shares from Egis Easytrip Services SA (ESSA). The total consideration is P
=103.0
million.
Meralco - On June 24, 2014, MPIC entered into a Share Purchase Agreement with
Beacon Electric for the sale of the latter's 56.35 million shares, comprising approximately
5% in Meralco at an aggregate consideration of P
=13.24 billion with P
=6.0 billion payable
immediately. Of P
=6.0 billion payable immediately, only P
=1.55 billion was settled in cash
while the remaining P
=4.45 billion is through offsetting with MPICs share of dividends
declared by Beacon Electric.
DMT - On July 31, 2014 MPIC acquired its 75% shareholding in FPM Infra from First
Pacific for a consideration of approximately US$ 101.25 million (or approximately
=4.3 billion). After the acquisition, MPIC's effective ownership interest in DMT
P
increased from 7.36% to 29.45%.
Capital expenditures. The Groups capital expenditures amounted to P

=8,186 million in 2014,
compared with P
=7,138 million in 2013. Capital expenditures in 2014 comprised additions to
service concession assets of Maynilad and MPTC and continuous improvements for the
Hospitals.
Financing Activities
The Companys consolidated cash inflows from financing activities increased from P
=1,181 million in
2013 to P
=9,931 million in 2014.
Below are the significant sources of cash inflow during 2014:
Proceeds from long-term debt. The Company availed of the following debt:
Fixed-rate Bonds of up to =
P 7,000 million due 2021 and 2024. On February 7, 2014,
MNTC filed a registration statement with the SEC for the offering of fixed rate bonds
with aggregate principal amount of up to P
=7,000.0 million comprising of 7-year fixed rate
bonds due in 2021 and 10-year fixed rate bonds due in 2024. The proceeds are intended
to partially fund the 5.65 km Segment 10 of the NLEX Project which will connect the
MacArthur Highway in Valenzuela City to C-3 Road in Caloocan City.
40
Term Loan Facility Agreement with BDO. On January 9, 2014, MPTDC entered into
Term Loan Facility Agreement with BDO for up to P
=3,250 million loan due 2024 for the
purpose of financing its acquisition of approximately 8.5% of the total issued and
outstanding capital stock of MNTC from EGIS Projects SA (Egis) and for other corporate
purposes.
Term Loan Facility Agreement with Thanachart Bank Public Company Limited
(Thanachart). On August 1, 2014, AIF Toll Road Holdings (Thailand) Limited (AIF), a
100% owned subsidiary of FPM Infra, entered into Term Loan Facility Agreement with
Thanachart, a bank incorporated under the laws of Thailand, of up to Baht 2,100 million
(or approximately US$65 million) loan for the purpose of reorganizing AIF's capital
structure. AIF availed of the full amount of the facility on August 6, 2014. The proceeds
of this loan was used to finance MPICs step-up increase in the effective ownership
interest in DMT.
Dilution in interest in MPHHI. On July 2, 2014, GIC, through its affiliates, invested
=3.7 billion for a 14.4% stake in MPHHI. GIC also advanced to MPIC P
P
=6.5 billion by way of
an Exchangeable Bond which can be exchanged into a 25.5% stake in MPHHI in the future,
subject to certain conditions. Proceeds from the bond will be used by MPIC for continuing
investments in infrastructure projects.
Aside from scheduled payment of debt (including interest) and service concession fees of Maynilad,
below are the significant financing activities made during the period:
Acquisition of Non-Controlling Interest in MNTC. On January 10, 2014, MPTDC acquired

3.9% of MNTC from Egis Projects, SA (Egis) for P
=1.5 billion; and on July 18, 2014, entered
into an agreement to acquire an additional interest of 4.6% from Egis and Egis Investment
Partners Philippines Inc. (EIP) for P
=1.7 billion. MPTDC's economic interest in MNTC is now
at 75.6%.
Dividends Paid to owners of the Parent Company. the BOD approved the declaration of the
following cash dividends:
Rate per Common
Preferred Dividends
Share
P
=0.022
=2.5 million
P
P
=0.026
=2.5 million
P
P
=0.040*
=1.3 million
P
*special one-off dividends
Record Date
Payable Date
4/8/2014
8/29/2014
12/2/2014
4/30/2014
9/24/2014
12/18/2014
Dividends Paid to non-controlling shareholders. Dividends paid to non-controlling

shareholders amounted to P
=1,178 million, significant portion of which is attributable to share
in the dividends of the non-controlling shareholders of MNTC and MWHCI.
41
Comparison of Other Financial Years

2013 versus 2012
MPIC Consolidated Statements of Income
in Php Millions
Operating Revenues
Interest expense
Share in net earnings of associates and a joint
venture
Interest income
Company
Total comprehensive income attributable to
owners of the Parent Company
Core income
Non-recurring expense
Audited
2013
2012
30,877
27,807
11,845
11,168
6,261
5,384
4,001
3,679
Increase
(Decrease)
Amount
%
3,070
11
677
6
877
16
322
9
2,286
462
554
593
1,765
652
876
1,662
521
(190)
(322)
(1,069)
30
(29)
(37)
(64)
7,209
384
5,907
602
1,302
(218)
22
(36)
7,550
7,229
(20)
6,485
6,564
(657)
1,065
665
(637)
16
10
(97)
Revenues
The Companys revenues increased by 11% to P
=30,877 million in 2013, reflecting improved
performance of the Companys major operating subsidiaries, Maynilad and MPTC. Maynilad posted
a 6% increase in revenues brought about by 4% billed volume growth coupled with 3% inflationary
increase in average effective tariff. MPTC likewise posted 20% higher revenues mainly due to 6%
higher average daily vehicle entries in NLEX and consolidation of CIC starting January 2, 2013
through Management-Letter Agreement. Hospital revenues also increased by 10% mainly driven by
increasing number of patients served at MMC and AHI and consolidation of DLSMC and CLDH.
Cost of sales and services increased by 6% to P
=11,845 million in 2013. Salaries, wages and benefits
increased by 21% due to increase in headcount and annual salary. In addition, operators fee and
provision for heavy maintenance increased by 14% and 56%, respectively, due to consolidation of
CIC. The increases in these items of cost of sales and services were offset by the lower amortization
of service concession asset driven by the change in Maynilads amortization method from straight line
to units-of-production (UOP).
General and administrative expenses increased by 16% to P
=6,261 million in 2013 due to increases in
personnel costs, professional fees and depreciation & amortization driven by consolidation of CIC,
DLSMC and CLDH. Annual salary increases and expanded headcount caused the increase in
42
personnel cost while continuing capital expenditure program caused the increase in depreciation and
amortization cost. Increase in professional fees is due to the Companys project bidding expenses.
Interest expense
Interest expense increased by 9% to P
=4,001 million in 2013 mainly due to consolidation of CICs own
loan and interest from the P
=4.7 billion loan to fund the acquisition of CAVITEX.
Share in net earnings of associates and a joint venture
Increase in MPICs share in the cumulative net earnings of associates and joint venture in 2013 was
due to increases in operational performance at Meralco, TMC, MDI. and DDH plus increase in
ownership in Meralco which was partially held back by Meralcos recognition of gain from recovery
of Local Franchise Tax in 2012.
Interest income
Interest income decreased by 29% to P
=462 million in 2013 mainly due to lower level of placements in
2013 as compared with 2012. The proceeds from the equity placement in January 2013 were
subsequently used to pay the P
=4.7 billion loan due in March 2013.
Other income and expenses decreased by 37% to P
=554 million with income from reversal of certain
provisions recognized in 2012 in relation to the prescription of the Transitional and Clarificatory
Agreement and Maynilad's offer to fully settle claim of MWSS. (see Notes 3 and 20 to the 2013
Audited Consolidated Financial Statements)
Provision for income tax decreased by 64% to P
=593 million due to Maynilads higher deferred tax
benefit from IFRIC 12, lower current tax due to MNTCs election of the Optional Standard Deduction
(OSD) for taxable year 2013 and recognition of deferred tax asset from reassessment of recoverability
of NOLCO of CIC.
Consolidated net income attributable to equity holders of the Parent Company
The 22% increase from P
=5,907 million to P
=7,209 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 and additional
contribution from acquisition of CIC; and increase in hospital revenue and effective cost management
in Healthcare group.
Other comprehensive income
Other comprehensive income of P
=384 million is mainly composed of recognition of unrealized gain
on fair value change in available for sale financial assets and the Companys share in the other
comprehensive income (loss) of Beacon Electric which includes actuarial gain on defined benefit plan
of Meralco offset by the loss on fair value change in Beacon Electric's cash flow hedge.
43
Core Income attributable to equity holders of the Parent Company

MPICs share in the consolidated core income increased by 10% from P
=7,229 million in 2013 mainly reflecting the following:
P
7% increase in contribution from Maynilad from P

=3,789 million in
2013 due to all-in effective tariff increase of 3%, lower amortization of concession asset and
4% increase in billed volume.
19% increase in contribution from MPTC from P

=1,874 million in
2013 mainly due to contribution from CIC, strong traffic growth and benefit from lower tax
rate due to election of OSD by MNTC.
5% increase in contribution from Beacon Electric/Meralco from P

=2,333 million in 2013 due to higher energy sold and increase in average ownership.
P
15% increase in contribution from Healthcare group from P

=507 million in 2012 to
=581 million in 2013 mainly due to hospital revenue growth, lower operating expenses and
P
consolidation of DLSMC.
These represent MPICs share in the stand-alone core income of the operating companies, net of
consolidation adjustments.
Maynilad, Beacon Electric/Meralco, MPTC and Healthcare accounted for 44%, 27%, 22% and 7%,
respectively of MPICs share of operating income.
Non-recurring expenses
Non-recurring expenses amounted to P
=20 million and P
=657 million in 2013 and 2012, respectively.
Non-recurring expenses are mainly composed of debt refinancing costs of Maynilad, MPIC and
Beacon Electric in 2012.
44
Water utilities

in Php Millions
Revenues
Costs and Expenses
Benefit from (Provision for) income tax
Reported Net Income
Core Income
Core EBITDA
Core EBITDA margin
Capital Expenditure

Volume of water supplied (MCM)
Volume of water billed (MCM)
Non revenue water % (average)
Non revenue water % (period end)
Billed customers (period end)
Customer mix (% based on billed volume)
Domestic (residential and semi-business)
Non-domestic (commercial and industrial)
Audited
2013
2012
16,895
7,147
(2,480)
(739)
407
6,936
7,530
(594)
11,083
66%
5,558
15,883
6,814
(2,340)
(223)
(126)
6,380
6,800
(420)
10,456
66%
6,989
2013
724.2
443.8
38.7%
35.4%
1,129,497
2012
757.9
428.4
43.5%
41.0%
1,073,508
79.7%
20.3%
79.1%
20.9%
Increase
(Decrease)
Amount
%
1,012
333
140
516
533
557
730
174
627
0%
(1,431)
6
5
6
231
423
9
11
41
6
0
(20)
Increase
(Decrease)
(33.7)
(4)
15.4
4
(4.8%)
(11)
(5.6%)
(14)
55,989
5
0.6%
(0.6%)
1
(3)
Maynilad, the biggest water utility in the Philippines, saw a 4% increase in the volume of water sold
in its concession area in 2013, a rate of growth held back by ongoing project delays in Cavite. The
increase in water sold was achieved even as Maynilad managed to draw 4% less water from the Angat
Dam.
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 35.4% as at the end of December 2013 from
41.0% a year earlier. The improvement was achieved on the strength of Maynilads continuing leak
repair program, which saw 41,171 leaks repaired in 2013.
The program, coupled with pipe rehabilitation and more efficient management of water pressure and
supply, has resulted in the recovery of over 138 million liters per day of water. Maynilad continues to
push forward with its ambitious NRW reduction program by allocating P
=1.7 billion in 2013 for NRW
diagnostics, leak repairs and the establishment and maintenance of District Metered Areas.
Maynilad now delivers 24-hour water supply to 97.8% of its customers, while 99.9% of customers
also receive water pressure of at least seven pounds per square inch, the minimum pressure necessary
45
to pump water to the second floor. The year-earlier percentages were 96.0% and 99.8%, respectively.
The number of billed customers rose 5% to 1,129,497 by the end of December 2013 from 1,073,508 a
year earlier.
Revenues
Water Services
Sewer Services
Other Contract & Services
Total Revenues
Audited
2013
2012
12,538
13,587
2,907
2,909
438
399
15,883
16,895
Increase
(Decrease)
Amount
%
1,049
8
2
0
(39)
(9)
1,012
6
Revenues for the period grew 6% to P

=15,883 million last year due to the
combined effect of a 4% increase in billed volume coupled with the inflationary basic tariff increase
of 3.2% in January 2013. Percentage increases in the components of Maynilads revenues are set out
above.
Costs and Expenses
Increased by 5% from P
=6,814 million to P
=7,147 million attributable to increases in personnel cost,
utilities and outside services 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). The Increase was
offset by lower amortization expense driven by the change in the amortization method of the service
concession asset from straight line to units of production.
Reported Net Income
Reported Net Income increased by 9% in 2013 due to the cost of refinancing fixed rate loans despite
higher core income at 11%.
Core income
Maynilads core income increased by 11% to P
=7,530 million in 2013 from P
=6,800 million last year
due to increased billed volume and higher average tariff as discussed above plus impact of lower
amortization of concession assets due to change in amortization method to UOP.
Non-recurring items include foreign exchange loss from US dollar transactions and refinancing cost
of fixed rate loans.
46
Toll Roads

Net toll revenues
Cost of Services
Operating expenses
Share in earnings of an associate
Core Income
Reported net income
Reported net income attributable to equity
holders of MPTC
Core EBITDA
Core EBITDA margin
Capital Expenditure

Average Daily Vehicle Entries - NLEX
Average Daily Vehicle Entries - CAVITEX
Average Kilometers Travelled - NLEX
Increase
Audited
(Decrease)
2013
2012
Amount
%
(in Php Millions, unless otherwise stated)
8,154
3,305
730
(944)
247
198
731
1,963
38
2,784
6,784
2,767
703
(549)
228
156
854
1,575
(101)
2,116
1,370
538
27
395
19
42
(123)
388
139
668
20
19
4
72
8
27
(14)
25
>100
(32)
2,001
5,540
68%
401
1,474
4,438
65%
264
527
1,102
3%
137
36
25
5
52
2013
173,067
102,280
3,272,638
2012
163,362
93,700
3,125,065
Increase
(Decrease)
9,705
8,580
147,573
6
9
5
MPTCs Core Net Income of P
=2.0 billion for 2013 was 25% higher than a year earlier as a result of
strong traffic growth and lower tax rates, interest and operating costs on the NLEX as well as the first
contribution from CAVITEX, beginning on January 2, 2013. Average daily entries rose 6% on the
NLEX and 9% on the CAVITEX in 2013 from a year earlier.
Construction continues on the first stage of the NLEX Harbour Link extension following a groundbreaking ceremony last year. The 8-kilometer road to link NLEX to the North Manila Port will see its
first stage open as soon as the second quarter of next year.
MNTC signed a Joint Venture Agreement with PNCC to build an elevated expressway to connect the
Northern and Southern toll road systems. The Metro Expressway Link Project is a planned fourlane elevated expressway to connect the Harbour Link to Southern Luzon. MPTC expects the
Connector Road to increase traffic on existing Northern and Southern toll road systems by enabling
commercial vehicles to traverse Metro Manila without violating a daytime truck ban and by slashing
travel time between the two road systems to as little as 20 minutes from over an hour or more today.
CAVITEX is a 14-kilometer toll road built in two segments running from Paraaque to Cavite with
average traffic of 100,000 vehicle entries a day. The road offers significant expansion prospects as a
47
result of the Ninoy Aquino International Airport 2 and Cavite-Laguna expressway projects which aim
to connect to CAVITEX, as well as from the recently opened Ternate-Nasugbu tunnel which will
substantially reduce the journey time between Batangas and Manila.
The NLEX Harbour Link, Citilink and Metro Expressway Link projects together with expansion of
the CAVITEX will see MPTC invest approximately P
=41 billion over the next few years to complete
construction of this vital road infrastructure. MPTC and MPIC intend to fund this sum using internal
resources and external debt.
As negotiations with the Government approach their fourth year without resolution, MNTC continues
to await the turning-over of management of the SCTEX from the BCDA. MNTC plans to invest
=400 million to integrate SCTEX with NLEX to facilitate seamless travel between the two
P
expressways but cannot move forward until this basic question is settled.
In addition, MPTC continues to await approval of toll rate adjustments which are overdue by over two
years for R1 of CAVITEX, which should have been effective from January 1, 2012 and more than one
year for NLEX, which was to be effective from January 1, 2013.
Net Toll Revenues
Net toll revenues amounted to P
=8,154 million, 20% higher year-on-year, mainly due to contribution
from CIC and traffic volume growth in 2013. Average daily traffic along NLEX reached 173,067
vehicle entries in 2013, 6% higher than in 2012.
Costs of services and Operating expenses
Total cost and expenses increased primarily on account of consolidation of CIC starting January 2,
2013 which contributed P
=439 million of the total expenses. Excluding the effect of CIC, total cost and
expenses increased by 3% largely due to NLEXs operators fee.
Financing cost increased by 72% or P
=395 million mainly due to consolidation of CIC with interest
expense on its long term debt amounting to P
=457 million. This was partly offset by lower interest
expense from MNTC due to pre-termination of PNB interest rate swap agreement which also
decreased the interest rate from 6.01% to 1.44%.
Core income
Core income increased by 25% to P
=1,963 million mainly due to contribution from CIC plus higher
traffic volume, lower operating cost and interest expense in NLEX.
Non-recurring income
Non-recurring items include forex gain from CIC's dollar loans and business development expenses.
Reported Net income attributable to equity holders of MPTC
Reported Net income increased by 36% in 2013 mainly due to contribution from CIC and higher toll
revenues.
48
Power

Revenues
Expenses
Reported net income attributable to equity
holders of MERALCO
Capital Expenditure

Volume Sold (in mln kwh)
System Loss (12-month moving average)
Increase
Audited
(Decrease)
2013
2012
Amount
%
285,270
13,366
5
298,636
266,162
8,684
3
274,846
17,211
10,187
2013
34,084
6.92%
17,117
10,321
2012
32,771
7.04%
94
(134)
1
(1)
Increase
(Decrease)
1,313
4
(0.12%)
(2)
Meralco's Reported Net Income for 2013 was broadly flat at P
=17.2 billion. Core Net Income for 2013
rose marginally to P
=17.0 billion on the strength of a 4% increase in energy sales to 34,084 gigawatt
hours and a slightly improved distribution tariff. The volume growth was buoyed by sustained healthy
demand from the commercial and residential segments, which grew by 4.3% and 4.7%, respectively,
followed by growth of 3.0% in industrial electricity consumption.
Capital expenditures for 2013 declined to P
=10.2 billion from P
=10.3 billion a year earlier, and was
invested mainly in new substations designed to decongest critical loads, provide additional capacity
for load growth and improve network reliability.
Meralco's capex commitment is delivering strong returns. The 12-month moving average system loss
fell to just 6.92% as at the end of December 2013. This level is 1.58 percentage points lower than the
regulatory cap of 8.5%, and marks the best performance in MERALCO's 110-year history. Gains
achieved from such system loss accrue to MERALCOs customers for 2013, alone, the decline in
System loss translated to customers benefit of P
=3.9 billion.
Meralco continues to build out businesses crucial to its growth.
Meralco's goal of participating in power generation in the Philippines moved forward on
August 29, 2013, when MGen signed a Joint Development Agreement with a wholly-owned
subsidiary of EGCO of Thailand for the development of a new 460 MW supercritical coal-fired power
plant in Mauban, Quezon. MGen's equity in the joint venture company will be 49% with a right to
nominate a preferred investor for an additional 2%. Together with EGCO, MGen is selecting a
financial advisor for project financing and tendering the Engineering, Procurement and Construction
contract for the project.
On October 22, 2013, MGen and FMIC announced that they had signed a SHA to complete the sale of
FMIC's 20% stake in Global Business Power Corporation (GBPC) to MGen for a consideration of
=7.15 billion. GBPC is one of the largest power producers in the Visayas with nine coal and diesel
P
power plants amounting to a total installed capacity of 627 MW with two more projects on the way,
an 82 MW plant in Toledo City and a 150 MW expansion in Panay.
49
In Singapore, PacificLight Power in which Meralco holds a 28% effective economic interest,
completed commissioning of both its power generating units by January 2014.
In the meantime, MGens project to build a 2x300MW coal-fired plant in Subic Bay continues to be
held back by regulatory and legal constraints, despite efforts to implement it for over three years.
On June 26, 2013, Retail Competition and Open Access commenced on a voluntary basis, allowing
major electricity consumers to shop for the lowest electricity prices. Out of 782 qualified customers in
the Meralco franchise area, 287 customers opted for immediate contestability and of those, 167 signed
up with Meralco's Retail Electricity Supply unit MPower. This testifies to the competitiveness of
Meralco's pricing and its commitment to its customers.
Healthcare
Healthcare Group
Gross Revenues
Expenses
Core EBITDA
Core Income
Reported Net Income

Occupancy rate (%) - Standard Beds
Total beds available
No. of Accredited Doctors
No. of Enrollees (schools) - average YTD
Increase
Audited
(Decrease)
2013
2012
Amount
%
11,329
1,164
10
12,493
9,135
1,009
11
10,144
2,328
328
14
2,656
720
159
22
879
712
174
24
886
2013
65%
2,021
5,418
3,897
2012
71%
1,696
4,546
3,291
Increase
(Decrease)
(6%)
325
872
606
(8)
19
19
18
Aggregate Core Net Income for the Hospital Group rose 22% to P
=879 million in 2013 from
=720 million a year earlier as a result of increasing patient revenues, gains from completed capital
P
expenditure programs and savings from group synergy projects.
MPIC's Hospital Group now comprises eight (8) full-service hospitals with approximately 2,150 beds
in total: MMC, CSMC, OLLH, AHI and DLSMC in Metro Manila; CLDH in central Luzon; RMCI in
the Visayas; and DDH 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.
50
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 2014 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
The Company has not yet recorded the unpaid concession fee payable relating to the LRT
Line 1 concession agreement amounting to P
=8.4 billion (nominal amount) as at
December 31, 2014. The present value of the concession fee payable shall be recognized
upon effective date as set forth in the concession agreement. For further details and other
transactions relating to off-balance sheet transactions and obligations, please refer to Note 33
Significant Contracts, Agreements and Commitments and Note 21 Related Party
Transactions to the 2014 Audited Consolidated Financial Statements.
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 2014
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 5 Operating Segment Information to the 2014 Audited Consolidated
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 utilities 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.
51
Item 7. Consolidated Financial Statements

Please see Exhibit I - 2014 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
Type of Service
Audit and Audit
related fees
i. Audit and
review of registrants
annual / interim
financial statements
Nature of Service
Audit of registrants
annual financial
statements and review
of quarterly results
2014
=23,140,875
P
2013
=23,140,875
P
2012
=21,550,000
P
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 2014 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.
52
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 reelection at the Annual Meeting:
Name
Manuel V. Pangilinan
Jose Ma. K. Lim
David J. Nicol
Edward S. Go*
Augusto P. Palisoc, Jr.
Antonio A. Picazo
Amado R. Santiago, III
Artemio V. Panganiban*
Ramoncito S. Fernandez
Lydia B. Echauz*
Edward A Tortorici
Ray C. Espinosa
Robert C. Nicholson
Victorico P. Vargas
Washington Z. SyCip*
* Independent Directors
Age
Citizenship
67
62
55
76
57
73
47
78
58
67
75
58
59
63
93
Filipino
Filipino
Australian
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
American
Filipino
British
Filipino
Filipino
Period during which

individual has served as such
March 2006 up to present
May 2010 up to present
July 2006 up to present
August 2007 up to present
June 2009 up to present
November 2009 up to present
May 2011 to present
August 2011 to present
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:
67
Chairman
Filipino
Period during which

individual has served as
such
Jose Ma. K. Lim
62
President & CEO
Filipino
David J. Nicol
55
Chief Finance Officer
Australian
April 2010 up to present
Edward A. Tortorici
75
Executive Advisor
American
57
Executive Director
Filipino
Antonio A. Picazo
73
Corporate Secretary
Filipino
Cristina S. Palma GilFernandez

Melody M. del Rosario
46
Assistant Corporate
Secretary
Vice President - Media
and Corporate
Communications
Filipino
Filipino
Name
Age
50
Position
Citizenship
53
Name
Age
Position
Citizenship
Period during which

individual has served as
such
July 2007 up to
December 2014
Jose Noel de la Paz (a)
58
Director for Corporate

Development
Filipino
Robin Velasco
44
Filipino
Albert W. L. Pulido
43
Filipino
Maida B. Bruce
41
Filipino
Reymundo Cochangco (a)
48
Jose Jesus G. Laurel
60
November 2009 up to
present
January 2010 up to
December 2014
Ferdinand G. Inacay (b)
49
Mabini Pablo (c)
65
Vice President - Group

Human Resources
Vice President - Investor
Relations
Vice President - Group
Controller
Hospital Group
Vice President Legal/General Counsel
and Compliance Officer
Vice President Business Development
Senior Advisor
Karim G. Garcia (b)
47
Filipino
Santhea V. delos Santos
37
Filipino
February 2014 to present
Loudette Anne M. Zoilo
38
Filipino
Celso Bernard G. Lopez
41
Filipino
January 2014 to present
Ricardo M. Pilares (d)
33
Filipino
Melanie G. Bendijo (d)
41
Vice President
Assistant Vice President
- Chief Risk Officer
Assistant Vice-President
- Human Resources
Assistant Vice-President
- Business Development
Legal
Treasury
November 2009 up to
December 2014
January 2011 up to
December 2014
January 2015 to present
Filipino
Filipino
Filipino
Filipino
Filipino
(a)
Mr. de la Paz andMr. Cochangco has transferred to Metro Pacific Hospital Holdings, Inc. effective January 2015.
Mr. Inacay has transferred to another company and has been replaced by Mr. Karim Garcia effective January 2015.
(d)
Mr. Pablo retired on December 31, 2014.
(c)
Atty. Pilares and Ms. Bendijo have recently been appointed as Assistant Vice Presidents in the year 2015.
(b)
Business Experience and Other Directorships

The business experience of each of the directors of the Parent Company is as follows:
Born in the Philippines in July 1946, Mr. Pangilinan graduated cum laude in 1966 from the Ateneo de
Manila University, the Philippines, with a Bachelor of Arts degree in Economics. He received his
MBA degree in 1968 from the Wharton School of Finance and Commerce at the University of
Pennsylvania, where he was a Procter & Gamble Fellow.
After graduating from Wharton, he 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 served as Managing Director until 1999. He was
appointed Executive Chairman until June 2003, when he was named as CEO and Managing Director.
54
Within the First Pacific Group, he holds the positions of President Commissioner of P.T. Indofood
Sukses Makmur Tbk, the largest food company in Indonesia.
In the Philippines, he is the Chairman of Philippine Long Distance Telephone Company (PLDT), the
country's dominant telecom company after serving as its President and CEO until February 2004. He
also serves as Chairman of Smart Communications Incorporated - the largest mobile phone operator
in the Philippines - PLDT Communications and Energy Ventures Incorporated (formerly Piltel),
Beacon Electric Asset Holdings Incorporated, Metro Pacific Investments Corporation, Landco Pacific
Corporation, Medical Doctors Incorporated, Colinas Verdes Corporation (operating the Makati
Medical Center and Cardinal Santos Medical Center, respectively), Davao Doctors Incorporated,
Riverside Medical Center Incorporated in Bacolod City, Our Lady of Lourdes Hospital, Asian
Hospital, Incorporated, Maynilad Water Services Corporation (Maynilad), Mediaquest Incorporated,
Associated Broadcasting Corporation (TV5), Philex Mining Corporation, and Manila North Tollways
Corporation. On May 2009, he became a member of the Board of Directors of the Manila Electric
Company (Meralco) and recently became its Chairman after serving as its President and CEO from
July 2010 to May 2012.
Outside the First Pacific Group, Mr. Pangilinan was a member of the Board of Overseers of The
Wharton School, University of Pennsylvania in the United States. He was Chairman of the Board of
Trustees of the Ateneo de Manila University. He is currently the Chairman of the Board of Trustees of
the San Beda College. He also serves as Chairman of the Hong Kong Bayanihan Trust, a non-stock,
nonprofit foundation which provides vocational, social and cultural activities for Hong Kong's foreign
domestic helpers. On February 5, 2007, Mr Pangilinan was named the President of the Samahang
Basketbol Ng Pilipinas (SBP), a 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 the amateur boxers in the country. In October 2009, Mr. Pangilinan has been
appointed as Chairman of the Philippine Disaster Recovery Foundation, Incorporated (PDRF), a nonstock, non-profit foundation established to formulate and implement a reconstruction strategy to
rehabilitate and rebuild areas devastated by recent floods and other calamities. Mr. Pangilinan is
Chairman of Philippine Business for Social Progress (PBSP), a social action organization made up of
the country's largest corporations, Vice Chairman of the Foundation for Crime Prevention, a private
sector group organized to assist the government with crime prevention, a member of the Board of
Trustees of Caritas Manila and Radio Veritas-Global Broadcasting Systems, Inc., a former
Commissioner of the Pasig River Rehabilitation Commission, and a former Governor of the
Philippine Stock Exchange. In June 2012, he was appointed as Co-Chairman of the newly organized
US-Philippines Business Society, a non-profit society which seeks to broaden the relationship
between the United States and the Philippines in the areas of trade, investment, education, foreign and
security policies and culture.
Mr. Pangilinan has been awarded the Ten Outstanding Young Men of the Philippines (TOYM) for
International Finance (1983), the Presidential Pamana ng Pilipino Award by the Office of the
President of the Philippines (1996), Best CEO in the Philippines by Institutional Investor (2004), CEO
of the Year (Philippines) by Biz News Asia (2004), People of the Year by People Asia Magazine
(2004)Distinguished World Class Businessman Award by the Association of Makati Industries, Inc.
(2005), Man of the Year by BizNewsAsia (2005), and Management Man of the Year by the
Management Association of the Philippines (2005). In May 2006, the Office of the President of the
Republic of the Philippines awarded him the Order of Lakandula, rank of a Komandante in
recognition of his contributions to the country. On December 2008, BizNewsAsia magazine awarded
to Mr. Pangilinan the Business Icon Gold Award "for having greatly contributed to the Philippine
economy through achievements in business and society." In February 2010, the Philippine
Sportswriters Association (PSA), the country's oldest media organization, named him the Sports
Patron of the Year for his invaluable contributions to the Philippine Sports. In November 2010, Mr.
Pangilinan was chosen by the Asia CEO Awards as the Global Filipino Executive of the Year for
55
2010. In June 2012, FinanceAsia awarded Mr. Pangilinan as the Philippines Best CEO for 2012. Just
recently in January 2014, Mr. Pangilinan received another recognition from the Philippine
Sportswriters Association (PSA) with the Executive of the Year award.
Mr. Pangilinan has been awarded four Honorary Doctorate in Humanities (Honoris Causa). First to
confer him was San Beda College in 2002. Second was the Xavier University in 2007. Holy Angel
University in Angeles, Pampanga awarded him his third degree in 2009. In April 2010, Far Eastern
University awarded him his fourth.
Jose Ma. K. Lim
Born in the Philippines in April 1952, Mr. Lim graduated from the Ateneo de Manila University, with
a Bachelor of Arts degree in Philosophy. He received his MBA degree in 1978 from the Asian
Institute of Management.
After graduating from the Asian Institute of Management in Manila, he managed a family-owned steel
fabrication business until 1987 when he joined the National Development Company as a Manager in
the Privatization Unit, a task force created by and reporting to the Department of Trade and Industry.
Mr. Lim then 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.
With the onset of the Asian financial crisis and the subsequent divestment of controlling interest in
FBDC, 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 from 2001 to 2003. He was
then elected President & CEO of MPC in June 2003.
In 2006, MPC was reorganized into Metro Pacific Investments Corporation (MPIC), where he
continues to serve as President & CEO. Aside from MPIC he is also currently a Director in the
following MPIC subsidiary 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., Indra Philippines Inc. Medical
Doctors, Inc. (owner and operator of Makati Medical Center), Cardinal Santos Medical Center
(Colinas Verdes Hospital Managers Corporation) Our Lady of Lourdes Hospital. He serves as
Chairman of Davao Doctors Hospital (Clinica Hilario) Inc., Asian Hospital and Riverside Medical
Center in Bacolod. Mr. Lim is also President of the Metro Strategic Infrastructure Holdings, Inc.
(MSIHI) which holds a minority ownership in Citra Metro Manila Tollways Corp. (Skyway).
He is active in the Management Association of the Philippines and has served as Vice-Chair of the
Good Governance Committee from 2007 to 2009. He is a founding member and Treasurer of the
Shareholders Association of the Philippines.
David J. Nicol
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 Conglomerate
CFO all Asia in 2012 and 2013.
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.
56
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.
Edward A. Tortorici
Age 75, born in the United States. Mr. Tortorici received a Bachelor of Science from New York
University and a Master of Science from Fairfield University. 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.
Robert C. Nicholson
Mr. Nicholson is a graduate of the University of Kent, qualified as a solicitor in England and Wales
and in Hong Kong. He is an Executive Chairman of Forum Energy Plc, a Chairman of Goodman
Fielder Limited (since March 2015), a Commissioner of PT Indofood Sukses Makmur Tbk and a
Director of MPIC, Philex Mining Corporation and Philex Petroleum Corporation. 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.
Augusto P. Palisoc Jr. has been with the First Pacific group of companies for 31 years. He is currently
an Executive Director of MPIC and is the President & Chief Executive Officer of Metro Pacific
Hospital Holdings Inc, which is the groups holding company for all hospital and healthcare
investments. He is a Director of Medical Doctors, Inc. (owner and operator of the Makati Medical
Center), Davao Doctors Hospital (Clinica Hilario) Inc. and Davao Doctors College, Inc., Colinas
Verdes Hospital Managers Corporation (operator of the Cardinal Santos Medical Center), Riverside
Medical Center Inc. and Riverside College Inc. in Bacolod, and Asian Hospital Inc., while he is
Chairman of East Manila Hospital Managers Corporation (operator of the Our Lady of Lourdes
Hospital), De los Santos Medical Center, MegaClinic Inc., and Central Luzon Doctors Hospital in
Tarlac. 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
57
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. Mr. Palisoc earned his Bachelor of Arts Degree, Major in
Economics (with Honors) from De La Salle University, and his Masters in Business Management
(MBM) Degree from the Asian Institute of Management. Mr. Palisoc was born in January 1958.
Ramoncito S. Fernandez is the President & Chief Executive Officer of Metro Pacific Tollways Corp.
(MPTC) and Tollways Management Corporation (TMC) under Metro Pacific Investments
Corporation (MPIC). He holds directorships in Metro Pacific Investments Corporation (MPIC),
Metro Pacific Tollways Corporation (MPTC), Manila North Tollways Corporation (MNTC),
Tollways Management Corporation (TMC), Cavitex Infrastructure Corp., and some subsidiaries of
PLDT including PLDT Subic Telecom, Inc., PLDT Clark Telecom, Inc., Pacific Global One Aviation
Company, Inc., Tahanan Mutual Building and Loan Association, Inc. (TMBLA) and Easytrip
Services Corporation.
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 has varied experiences in international carrier business, administration and materials
management, industrial marketing and sales. He was the Head of International and Carrier Business
of PLDT and Smart and Global Access Group of Smart from 2007 until December 31, 2008. He was
the Administration and Materials Management Head of Smart from 2000, and of PLDT from 2004,
until December 31, 2007. He was the Executive Vice President in charge of marketing, sales and
logistics of Starpack Philippines, Inc. until June 2000. Mr. Fernandez obtained his Bachelor of
Science Degree in Industrial Management Engineering from the De La Salle University and Master's
Degree in Business Management from the Asian Institute of Management.
Victorico P. Vargas
Mr. Victorico P. Vargas is the President and CEO of Maynilad. He formally took over the position in
August 2010. He is a director of Metro Pacific Investments Corporation, Metropac Water Investments
Corporation, and director and Chairman of Philippine Hydro, Inc., member of the Executive
Committee of the First Pacific Leadership Academy, trustee of the MVP Sports Foundation, Inc. and
trustee of IdeaSpace Foundation, Inc.
Prior to his appointment, Mr. Vargas was the Senior Vice President for the Human Resources Group
and Head of the Business Transformation Office of the Philippine Long Distance Telephone
Company (PLDT), the nations no. 1 telecommunications entity.
Mr. Vargas was also designated to head the International & Carrier Business Group (ICBG) of PLDT
in 2007, managing the business relations with foreign and domestic carriers and other telecom
entities. He was responsible for reviewing the overall business environment in foreign and domestic
telecom markets and determining strategic areas and initiatives to optimize business potentials. He
managed the formulation, development, alignment and implementation of the companys strategies to
address customer requirements of international and domestic carriers.
In 2003, he was also appointed supervision over Asset Protection and Management Group responsible
for Property Management, Risk Management (Insurance) and Facilities Management.
58
Before joining PLDT in 2000, he had 12 years of experience in the banking industry Citibank; 13
years in other consumer multinational companies, notably Colgate- Palmolive Philippines, Union
Carbide and Pepsi Cola.
In the field of sports, he currently holds the position of President for the Amateur Boxing Association
of the Philippines, appointed as Honorary Vice President of the Asian Boxing Confederation (ASBC).
He was elected Vice-Chairman for the Samahang Basketbol ng Pilipinas, Inc., the national sports
association for the Philippine Basketball, a member of the Philippine Olympic Commission and
International Basketball Federation. He holds the position of Alternate Governor of the Philippine
Basketball Association, the nations professional basketball league.
Antonio A. Picazo
Antonio A. Picazo is currently the 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. Mr. Picazo was born in
Manila in August of 1941 and obtained his Bachelor of Laws degree from the University of the
Philippines. He passed the 1964 Philippine Bar Examinations with the 5th highest rating. In 1967, he
obtained a Master of Laws degree, Major in Taxation from the University of Pennsylvania. In 1976,
he also completed the Management Development Program course at the Asian Institute of
Management. He is currently also a member of the Board of the PGH Medical Foundation, Haribon
Foundation and the Gerry Roxas Foundation.
Ray C. Espinosa
Age 58, born in the Philippines. Mr. Espinosa has a Master of Laws degree from the University of
Michigan Law School and is a member of the Integrated Bar of the Philippines. 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 Philippine Long Distance Telephone Company (PLDT), Manila Electric Company
(MERALCO), Metro Pacific Investment, Corporation, Roxas Holdings, Inc., and also an independent
director of Lepanto Consolidated Mining Company "Lepanto"). He is a director of Meralco PowerGen
Corporation, Mediaquest Holdings, Inc., TV5 Network, Inc., and Mediascape, Inc. (Cignal TV). He
is the chairman of the Philstar Daily, Inc. and BusinessWorld Publishing Corporation, chairman of the
Finance Committee of MERALCO, and chairman of the Audit Committee of Lepanto. He is the
General Counsel of MERALCO and Head of PLDTs Regulatory Affairs and Policy Office. He is
also 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.
Amado R. Santiago III is the Managing Partner of the Santiago & Santiago Law Offices and is
engaged in the general practice of law. He specializes in corporate litigation, which includes corporate
rehabilitation proceedings under the Securities and Exchange Commission Rules on Corporate
Recovery, Interim Rules of Procedure on Corporate Rehabilitation and the Rules of Procedure on
Corporate Rehabilitation, as well as taxation law. He acts as director, corporate secretary, and/or
corporate counsel of various corporate clients. He graduated from the Ateneo de Manila School of
Law in 1992 and passed the Philippines Bar Examinations given in the same year. He received his
degree of Bachelor of Science in Legal Management in 1988 from the Ateneo de Manila University.
Edward S. Go (Independent Director)
Edward S. Go currently serves as Chairman of the Board of Hyundai Asia Resources, Inc. and of
ASA Philippines Foundation. He is an Independent Director of Metro Pacific Investments
59
Corporation, PLDT Communications and Energy Ventures, Inc. (PCEV) and Filipino Fund Inc. He is
also Chairman of the PLDT Beneficial Trust Fund and member of the Board of 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 and Trans-Asia Petroleum Corporation. He 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. He obtained his Bachelor of Arts Degree, magna cum laude, and underwent postgraduate
studies at the Ateneo de Manila University, where he served as member of the Board of Trustees from
2008 until he stepped down February. He was Chairman of the Board of Trustees during the last four
years.
Chief Justice Artemio V. Panganiban (Independent Director)
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)
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)
Mr. Washington SyCip is the founder of the SGV Group. He is the Chairman Emeritus of the Board
of Trustees and Board of Governors of the Asian Institute of Management, Philippines and a member
of the Board of Overseers of the Columbia University Graduate School of Business, New York. He is
a counselor in the Conference Board, a member of the International Advisory Board, Council on
Foreign Relations (1995-2010) and an Honorary Life Trustee of The Asia Society-all in New York.
60
He is a member of the Board of Directors of a number of major corporations in the Philippines and
other parts of the world.
All of the incumbent Directors named above have a one year term of office.
Philippine Long Distance Telephone Company, Manila Electric Company and Philex Mining
Corporation are listed companies in the Philippines.
Officers
The business experience of each of the officers and executives of the Parent Company is as follows:
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.
Robin Michael L. Velasco
Mr. Velasco joined the company in July 2009 and is responsible for ensuring that MPIC's subsidiaries
and future acquisitions have the right People Strategies to support the growth required to achieve
business plans. He led the creation of an HR Council which is an organization of all HR Heads in the
First Pacific Group. He brings with him 24 years of management experience garnered from Global
Multinationals such as Procter & Gamble, Johnson & Johnson and Synovate. He has been exposed to
various facets of management which includes Finance, Supply Chain, Manufacturing, Research &
Development, Technical Services, Market Research, Quality Assurance and HR Management. He
spent the last 5 years of his career prior to MPIC in Singapore as HR Director for Asia Pacific, Talent
Management for Johnson & Johnson, and then as HR Director for Asia for Synovate, leading 12
Asian countries in all HR aspects. He has also spent 6 years of his career as a Professor of the
Graduate School of Business and the Business Management Dept. of La Salle where he taught
Strategic Management, Ethics, Stock Market Trading, Production Management and HR Management.
Ms. Del Rosario has been with the Metro Pacific Group since 1993, and has over 21 years of
experience heading MPIC's 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.
61
Albert W. L. Pulido
Albert 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 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.
Atty. Jose Jesus G. Laurel
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 the 1981 bar. He also has a Masters of Laws from
Yale University.
Karim G. Garcia
Karim G. Garcia joined MPIC in January, 2015. As Vice President for Business Development, he is
responsible for new business expansion and integration into MPICs businesses. His mandate is to
increase MPICs competitive advantage, by actively searching and developing new business ventures,
and executing M&A and RFP 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 Chemoil Corporation, one of the largest independent fuel oil bunker service companies. He
then moved to Houston, Texas and joined Enron Development Corp, where he managed several
international green field power development projects, with a combined generation capacity of close to
1000MW, from concept to financial close. In addition, within energy venture capital subsidiary,
Enron Global Investments, he led Enrons Mergers & Acquisitions efforts in South East Asia. Also
prior to MPIC, Karim was Vice President for Strategic Planning for Trans Asia Oil and Energy
Development Corporation, a Phinma Company. He was responsible for the development of
greenfield power projects, and the acquisition of energy assets. He also led Trans-Asias foray in to
Liquefied Natural Gas and combined cycle gas turbine power generation. Karim Garcia holds a
Bachelors of Science in Business Administration, from Boston University and obtained a Masters of
Business Administration from the Marshall School of Business at the University of Southern
California.
Ms. Delos Santos joined the Company in February 2007 and has performed functions like financial
and management reporting, planning, analysis and budget. She is currently designated as the Chief
Risk Officer. She has over 15 years of experience in finance and audit where she was exposed to
diverse industries including utilities, telecommunication, media, power and shared services. She was
part of a team who successfully shadowed and backfilled one of the most critical reporting processes
in an integrated power company in North America and migrated these processes to the Philippines.
62
She worked as well with a group of companies where she implemented process improvements in its
consolidation and reporting system, migrated their accounting system and helped in getting ISO
certification for processes of a holding company. She also worked with SGV and Co. where she
gained her audit experience. With her diverse and extensive experience in Finance, she has been
involved in helping senior management craft investment and funding strategies for the Company. She
holds a Bachelor of Science with a degree in Accountancy and is a Certified Public Accountant.
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 organization's 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.
Celso G. Lopez
Mr. Lopez joined MPIC in June 2012. He is currently seconded to Automated Fare Collection
Services, Inc. the incorporated vehicle of the First Pacific Group and Ayala Group Consortium. He is
helping out AFCS with its strategies and operation as he performs the role of Chief Operating Officer.
His responsibilities include Business Development beyond the Rail Concession, Operations for Card
Issuance & Merchant Acquisition and the Maintenance of the Fare Collection System for the LRT1,
LRT2 and MRT3 Lines. Before his secondment, he was responsible for Business Development and
Project Management for the MPIC Hospital Group. Prior to this he also did Project Management for
Special Projects under the Office of the President & CEO and was involved in strategic planning by
driving the implementation and monitoring of corporate strategies. He coordinated with the various
Operating Companies to monitor for the CEO their alignment with agreed key action plans and
monitored their performance versus set metrics. Mr. Lopez had 16 years of banking experience before
joining MPIC. Up to June 2010 he was Executive Vice President of EastWest Banking Corporation.
Prior to that he spent 7 years in Security Bank Corporation and was First Vice President in charge of
setting up the Fixed Income Securities Division. In 2003, he completed his Executive MBA from the
Asian Institute of Management and graduated with Distinction.
Ricardo M. Pilares III
Mr. Pilares is the Assistant Vice President for Legal of Metro Pacific Investments Corporation. He
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 13 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.
63
Antonio A. Picazo
(See business experience above)
Cristina S. Palma Gil-Fernandez

Cristina S. Palma Gil-Fernandez assumed 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 currently a Partner at Picazo Buyco Tan
Fider & Santos Law Offices and has over 18 years of experience in corporate and commercial law,
with emphasis on the practice areas of banking, securities and capital markets (equity and debt),
corporate reorganizations and restructurings and real estate.
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 2013 and 2014 and estimated to be paid in 2015, to the officers
of the Parent Company is set out below:
Names
Jose Ma. K. Lim
David J. Nicol

Aggregate for abovenamed officers
All Other Directors and
Officers as a group
excluding the abovenamed officers
Position
Chairman
President & CEO
Executive
Director,
President
&
CEO
Hospital Group
VP Human Resources
Year
2013
2014
2015 (est.)
2013
2014
2015 (est.)
Salary
90,530,980
97,864,529
92,000,000
72,759,567
78,550,519
70,000,000
Bonus
Others
65,920,634
107,715,641
70,000,000
47,757,501
87,167,959
53,000,000
171,680,201
103,025,146
-
The above executive officers are covered by standard employment contracts and employees
retirement plan and can be terminated upon appropriate notice.
Non-executive Directors are entitled to a per diem allowance of P
=50,000 for each attendance in
MPICs Regular Board meetings.
64
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 2014 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
Jose Ma. K. Lim
David J. Nicol
Edward A. Tortorici
Victorico P. Vargas
Antonio A. Picazo
Edward S. Go
Artemio V. Panganiban
Lydia B. Echauz
Washington Z. SyCip
Amado R. Santiago, III
Robert C. Nicholson
Ray C. Espinosa
Jose Noel C. dela Paz
Maida B. Bruce
Robin L. Velasco
Albert L. Pulido
Jose Jesus G. Laurel
Ferdinand G. Inacay
Reymundo S. Cochangco
Mabini F. Pablo
Celso Bernard Lopez
Loudette M. Zoilo
Aggregate
for
above
named directors/officers
Chairman
President/CEO
CFO / Director
Executive Advisor
Executive Director
Executive Director
Executive Director
Director/Corp. Sec.
Ind Director
Ind Director
Ind Director
Ind Director
Director
Director
Director
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Vice President
Senior Advisor
Asst. Vice President
Others
Amount
Options
of
43,500,000
43,500,000
59,500,000
10,000,000
3,000,000
109,500,000
17,500,000
19,425,245
34,800,000
1,000,000
2,500,000
Date
of
Grant
of
the Options
12/09/08
03/10/09
07/02/10
12/21/10
04/12/11
10/14/14
12/09/08
03/10/09
07/02/10
03/08/11
10/14/14
Exercise
Price
Market
Price
on the
Date of
Grant
P2.12
=
=2.73
P
=2.73
P
=3.50
P
=3.66
P
=4.60
P
=2.12
P
=2.73
P
=2.73
P
=3.53
P
=4.60
P
P2.10
=
=2.70
P
=2.65
P
=3.47
P
=3.70
P
=4.59
P
=2.10
P
=2.70
P
=2.65
P
=3.53
P
=4.59
P
Expiration Date
Jan. 2, 2013
March 10, 2013
July 2, 2015
Dec. 21, 2015
April 14, 2016
October 14, 2018
Jan. 2, 2013
March 10, 2013
July 2, 2015
March 8, 2016
October 14, 2018
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
65
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, of which
89,000,000 options were granted to MPIC directors and officers while 23,000,000 were granted to
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., 2013 to 2015 and 2010 to 2012 for MPICs LTIP,
2013 to 2015 for Maynilad's LTIP and 2012 to 2014 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, 2014, the LTIP fund balance for the 2013-2015
LTIP program amounted to P
=345 million
66
LTIP expense for the years ended December 31, 2014, 2013 and 2012 amounted to P
=441 million,
=411 million and P
P
=165 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, 2014 and 2013 amounted to P
=850 million and P
=455 million,
respectively, and is presented under Accounts payable and other current liabilities and Deferred
credits and other long-term liabilities account in the accompanying consolidated statements of
financial position.
Please see Notes 25 in the 2014 Audited Consolidated Financial Statements.
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 February 28, 2015.
Common
Shares

17/F Liberty Centre Bldg.
104 H.V. dela Costa,
Salcedo Vill., Makati City
Filipino
Common
PCD Nominee Corporation*
Foreign
Name of Beneficial
Owner &
Relationship with
Record Owner
MPHI is both record
and beneficial owner.
Mr. Manuel V.
Pangilinan is usually
designated as its
representative, with
authority to vote its
shares, at meetings of
shareholders.
Public ownership
Common
PCD Nominee Corporation*
Filipino
Class "A"
Preferred
Shares

17/F Liberty Centre Bldg.
104 H.V. dela Costa,
Salcedo Vill., Makati City
Filipino
Type of
Class
Name and address of

record owner and
relationship with Issuer
Citizenship
No. of Shares
Held
Percent
of class
14,522,948,170
52.13%
9,431,034,166
33.85%
Public ownership
3,868,205,726
13.88%
MPHI is both record

and beneficial owner.
Mr. Manuel V.
Pangilinan is usually
designated as its
representative, with
authority to vote its
shares, at meetings of
shareholders.
5,000,000,000 100.00%
*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 a nd other
rights for the number of shares beneficially owned by such clients. As at February 23, Deutsche Bank Manila Clients Acct., and The
Hongkong and Shanghai Banking Corp. Ltd. Clients Acct., participants of PCD, beneficially own 4,682,040,415 or 16.80%,and
3,100,804,253 or 11.13% , respectively, of the Companys total outstanding shares.
Other than the abovementioned, MPIC has no knowledge of any person who, as at February 28, 2014,
was directly or indirectly the beneficial owner of, or who has voting power or investment power
67
(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.
Security Ownership of Management as at February 28, 2015
Type
of Class
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Name and Address of Owner
7/F Ramon Cojuangco Bldg.
Makati Avenue, Makati City
Jose Ma. K. Lim
10/F MGO Bldg., Legazpi corner dela Rosa Streets,
Legazpi Village, Makati
David J. Nicol
Edward A. Tortorici
Alfred A. Xerez-Burgos, Jr.
Landco Asset Management, Inc. 2/F Center Mall
Building Presidents Avenue, BF Homes, Paranaque
Edward S. Go
Unit 16-A Pacific Plaza Tower
Fort Bonifacio, Bonifacio Global City
Taguig, Metro Manila
Lydia B. Echauz
Far Eastern University
N. Reyes St., Sampaloc, Manila
1203 Acacia, Dasmarinas Village,
Makati City
Antonio A. Picazo
19/F Liberty Center
104 H.V. dela Costa Street
Salcedo Village, Makati City
Room 114 Ortigas Building
Ortigas Avenue, Pasig City
Ray C. Espinosa
5/F Locsin Building, Ayala Avenue
Cor Makati Avenue, Makati City
Robert C. Nicholson
24/F Two Exchange Square, 8 Connaught Place
Central, Hong Kong
Amount and
nature of
Beneficial
ownership
Citizenship
Percent
of class
Filipino
0.00%
11,000,001
Filipino
0.04%
7,250,001
Australian
0.03%
10,000,001
Filipino
10,729,596
American
0. 04%
Filipino
0.00%
500,000
Filipino
0.00%
30,000
Filipino
0.00%
250,001
Filipino
0.00%
1,001
Filipino
0.00%
2,500,001
Filipino
0.01%
Filipino
0.00%
5,862,001
Filipino
British
0.04%
0.02%
0.00%
68
Type
of Class
Common
Common
Name and Address of Owner
Amount and
nature of
Beneficial
ownership
Victorico P. Vargas
Maynilad Water Services, Inc
MWSS Complex, Katipunan Road,
Balara, Quezon City
Washington Z. SyCip
6760 Ayala Avenue, 1226 Makati City
Aggregate for above named officers and directors
Citizenship
Percent
of class
4,500,001
Filipino
0.00%
FilipinoAmerican
0.00%
52,622,609
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 2014 Audited Consolidated Financial Statements.
PART IV CORPORATE GOVERNANCE
Item 13. Part IV - Corporate Governance portion of the Annual Report
The Manual on Corporate Governance 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.
Please refer to Exhibit III - Annual Corporate Governance Report filed on January 12, 2015.
69
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 2014:
1
2
3
4
5
6
7
8
Items Reported
JV Agreement between MPTDC and PNCC for Segment 10.2
Date Filed
January 22
AF Consortium Receives Notice of Award to Design and Construct P1.72B

AFCS project
AF Consortium Completes Post-Award Requirements for the AFCS Project
February 3
Sale of NE Pacific Shopping Centers Corporation shares to Cosco Capital

Inc.
AFCS Concession Agreement signing with DOTC
Bond issuance and listing by Manila North Tollways Corporation, a
subsidiary of Metro Pacific Investments Corporation
GIC Invests in Minority Stake to Expand MPIC Hospital Group
Light Rail Manila Consortium submitted its pre-qualification documents,
technical proposal and financial bid for the Manila LRT 1 South Extension
Project
FPC sells Don Muang Tollway stake to MPIC
10 MPIC and MPTC join hands with SharePHIL to educate investors, Promote
Shareholder activism
11 MPIC takes 5% direct shareholding in Meralco through acquisition from
Beacon Electric
12 DOTC awards LRT 1 to Metro Pacific - Ayala Consortium
13 LRT Line 1 Cavite Extension and Operations & Maintenance Project
Concession Agreement Signed
14 Material information pertaining to Manila North Tollways Corporation:
SCTEX Price Challenge
15 Restructuring of Landco Pacific Corporation
16 Execution of operations and maintenance agreement by Metropac Water
Investments Corporation
February 20
March 3
March 31
March 31
May 16
May 29
May 30
June 16
June 24
September 15
October 2
December 11
December 22
December 23
70
INDEX TO FINANCIAL
STATEMENTS AND
SUPPLEMENTARY SCHEDULES
Item 16. Index to Financial Statements and Supplementary Schedules

i. Exhibit I - 2013 Audited Financial Statements
ii. Exhibit II - Supplementary Schedules
iii. Exhibit III - Annual Corporate Governance Report
72
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, 2014 and 2013
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2014, 2013, and 2012
Consolidated Statements of Changes in Equity for the years ended
December 31, 2014, 2013, and 2012
Consolidated Statements of Cash Flows for the years ended
December 31, 2014, 2013, and 2012
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, 2014 and List of New and Amended Standards and Interpretations and
Improvements to PFRS that became effective as at January 1, 2015
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, 2014
Exhibit III - Annual Corporate Governance Report
*In compliance with SEC Memorandum Circular 11, Series of 2008
SEC Form 17- A 2014 Index to Financial Statements and Supplementary Schedules
EXHIBIT I
2014 AUDITED FINANCIAL
STATEMENTS
Metro Pacific Investments Corporation and

Subsidiaries
Consolidated Financial Statements
December 31, 2014 and 2013
and Years Ended December 31, 2014, 2013 and 2012
and
Independent Auditors Report
SyCip Gorres Velayo & Co.

6760 Ayala Avenue
1226 Makati City
Philippines
Tel: (632) 891 0307

Fax: (632) 819 0872
ey.com/ph
BOA/PRC Reg. No. 0001,

December 28, 2012, valid until December 31, 2015
SEC Accreditation No. 0012-FR-3 (Group A),
November 15, 2012, valid until November 16, 2015
INDEPENDENT AUDITORS REPORT
The Stockholders and the Board of Directors

Metro Pacific Investments Corporation
We have audited the accompanying consolidated financial statements of Metro Pacific Investments
Corporation and Subsidiaries, which comprise the consolidated statements of financial position as at
December 31, 2014 and 2013, and the consolidated statements of comprehensive income, statements
of changes in equity and statements of cash flows for each of the three years in the period ended
December 31, 2014, and a summary of significant accounting policies and other explanatory
information.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with Philippine Financial Reporting Standards, 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.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounrets and disclosures
in the consolidated financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the consolidated financial statements 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 entitys internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
*SGVFS008665*
A member firm of Ernst & Young Global Limited
-2Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of Metro Pacific Investments Corporation and Subsidiaries as at December 31, 2014
and 2013, and their financial performance and their cash flows for each of the three years in the period
ended December 31, 2014 in accordance with Philippine Financial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Julie Christine O. Mateo

Partner
CPA Certificate No. 93542
SEC Accreditation No. 0780-AR-1 (Group A),
February 2, 2012, valid until March 31, 2015
Tax Identification No. 198-819-116
BIR Accreditation No. 08-001998-68-2012,
April 11, 2012, valid until April 10, 2015
PTR No. 4751308, January 5, 2015, Makati City
February 26, 2015
*SGVFS008665*
A member firm of Ernst & Young Global Limited
-2December 31
2014
2013
Noncurrent Liabilities
Noncurrent portion of:
Provisions (Note 17)
Service concession fees payable (Notes 18, 35 and 36)
Long-term debt (Notes 19, 35 and 36)
Deferred tax liabilities (Note 29)
Other long-term liabilities (Notes 20, 35 and 36)
Total Noncurrent Liabilities
Total Liabilities
P
= 228
7,271
57,494
4,228
6,019
75,240
104,440
=
P312
7,909
47,536
3,774
5,152
64,683
87,304
Equity (Note 22)

Owners of the Parent Company:
Capital stock
Additional paid-in capital
Equity reserves
Retained earnings
Other comprehensive income reserve
Total equity attributable to owners of the Parent Company
Total Equity
26,096
42,993
6,245
27,525
836
103,695
25,877
129,572
26,076
42,933
2,643
21,882
927
94,461
18,819
113,280
P
= 234,012
=200,584
P
See accompanying Notes to Consolidated Financial Statements.
*SGVFS008665*
METRO PACIFIC INVESTMENTS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Millions, Except Earnings Per Share Figures)
Years Ended December 31

2013
2012
2014
OPERATING REVENUES
Water and sewerage services revenue
Toll fees
Hospital revenue
School revenue
COST OF SALES AND SERVICES (Note 23)
GROSS PROFIT
General and administrative expenses (Note 24)
Interest expense (Note 26)
Share in net earnings of equity method investees
(Note 11)
Interest income (Note 26)
Construction revenue and other income (Note 27)
Construction costs and other expenses (Note 27)
INCOME BEFORE INCOME TAX
PROVISION FOR (BENEFIT FROM)
INCOME TAX (Note 29)
Current
Deferred
NET INCOME
OTHER COMPREHENSIVE INCOME (OCI)
(Note 28)
Net OCI to be reclassified to profit or loss in
subsequent periods
Net OCI not being reclassified to profit or loss in
subsequent periods
TOTAL COMPREHENSIVE INCOME
Net income attributable to:
Owners of the Parent Company
Total comprehensive income attributable to:
EARNINGS PER SHARE (Note 30)
Basic Earnings Per Common Share, Attributable to
Diluted Earnings Per Common Share, Attributable to
P
= 18,363
8,641
6,677
151
33,832
(13,082)
20,750
(6,823)
(4,301)
=16,895
P
8,154
5,700
128
30,877
(11,845)
19,032
(6,261)
(4,001)
=15,883
P
6,784
5,034
106
27,807
(11,168)
16,639
(5,384)
(3,679)
3,167
385
8,491
(7,887)
13,782
2,286
462
8,113
(7,559)
12,072
1,765
652
10,115
(9,239)
10,869
1,160
48
1,208
12,574
1,061
(468)
593
11,479
1,097
565
1,662
9,207
(14)
21
(24)
(52)
(76)
P
= 12,498
398
384
=11,863
P
581
602
=9,809
P
P
= 7,940
4,634
P
= 12,574
=7,209
P
4,270
=11,479
P
=5,907
P
3,300
=9,207
P
P
= 7,849
4,649
P
= 12,498
=7,550
P
4,313
=11,863
P
=6,485
P
3,324
=9,809
P
P
= 0.305
=0.278
P
=0.240
P
P
= 0.304
=0.277
P
=0.239
P
*SGVFS008665*

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
(Amounts in Millions)
At January 1, 2014
Total comprehensive income for the period:
Net income
Other comprehensive income (Note 28)
Total comprehensive income
Executive Stock Option Plan (ESOP) (Note 31):
Exercise of stock option
Cost of ESOP
Gain on sale to NCI (Note 22)
Acquisition of NCI (Note 22)
Cash dividends declared (Note 22)
Dividends declared to non-controlling stockholders (Note 6)
Other changes in NCI (Note 33)
At December 31, 2014
Capital Stock
(Note 22)
P
=26,076
Year Ended December 31, 2014

Attributable to Owners of the Parent Company
Additional
Other
Paid-in
Equity
Retained Comprehensive
Reserves
Capital
Earnings Income Reserve
(Note 22)
(Note 22)
(Note 22)
(Note 22)
P
=42,933
P
=2,643
P
=21,882
P
=927
20
P
=26,096
60
P
=42,993
(21)
64
5,967
(2,408)
P
=6,245
7,940
7,940
(2,297)
P
=27,525
(91)
(91)
P
=836
Non-controlling
Interest (NCI)
(Note 22)
Total
P
=94,461
P
=18,819
7,940
(91)
7,849
59
64
5,967
(2,408)
(2,297)
P
=103,695
4,634
15
4,649
3,509
(787)
(1,045)
732
P
=25,877
Total Equity
P
=113,280
12,574
(76)
12,498
59
64
9,476
(3,195)
(2,297)
(1,045)
732
P
=129,572
*SGVFS008665*
-2-
At January 1, 2013
Net income
Cost of ESOP
Equity raising (Note 22)
Gain on equity transfer and others (Note 22)
NCI in a business combination (Note 4)
Capital Stock
(Note 22)
=24,664
P

Additional
Other
Paid-in
Equity
Reserves
Capital
(Note 22)
(Note 22)
(Note 22)
(Note 22)
=38,097
P
=
P707
=15,688
P
=
P487
82
1,330
=26,076
P
188
4,648
=42,933
P
(46)
18
1,964
=2,643
P
7,209
7,209
(100)
(915)
=21,882
P
341
341
99
=
P927
Non-controlling
Interest (NCI)
Total
(Note 22)
=79,643
P
=14,747
P
7,209
341
7,550
224
18
5,978
1,963
(915)
=94,461
P
4,270
43
4,313
1,583
(2,107)
283
=18,819
P
Total Equity
=94,390
P
11,479
384
11,863
224
18
5,978
3,546
(915)
(2,107)
283
=113,280
P
*SGVFS008665*
-3-
At January 1, 2012
Net income
Cost of ESOP
Other changes in NCI
Capital Stock
(Note 22)
=24,643
P

Additional
Other
Paid-in
Equity
Reserves
Capital
(Note 22)
(Note 22)
(Note 22)
(Note 22)
=38,056
P
=
P706
=10,449
P
(P
=91)
21
=24,664
P
41
=38,097
P
(12)
13
=
P707
5,907
5,907
(668)
=15,688
P
578
578
=
P487
Total
=73,763
P
5,907
578
6,485
50
13
(668)
=79,643
P
Non-controlling
Interest (NCI)
(Note 22)
=12,667
P
3,300
24
3,324
(1,470)
226
=14,747
P
Total Equity
=86,430
P
9,207
602
9,809
50
13
(668)
(1,470)
226
=94,390
P
*SGVFS008665*

CONSOLIDATED STATEMENTS OF CASH FLOWS
2014
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments for:
Interest expense (Note 26)
Amortization of service concession assets (Note 23)
Depreciation and amortization (Notes 23 and 24)
(Note 11)
Dividend income (Note 27)
Interest income (Note 26)
Gain on sale of AFS financial asset (Note 27)
Unrealized foreign exchange loss (gain) - net
Gain on bargain purchase (Notes 4 and 27)
Reversal of contingent liabilities (Note 27)
Reversal of accrued interest payable to MWSS
(Note 27)
Adjustment to amortized cost due to change in
expected cash flows (Note 27)
Refinancing costs and others
Operating income before working capital changes
Decrease (increase) in:
Restricted cash
Receivables
Increase (decrease) in:
Accounts payable and other current liabilities
Provisions
Accrued retirement cost
Net cash generated from operations
Income taxes paid
Interest received
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiaries, net of cash acquired
(Note 4)
Decrease (increase) in short-term deposits
Increase in other noncurrent assets
Dividends received from:
Equity method investees (Note 11)
Beacon Electrics preferred shares (Note 11)
AFS financial asset (Note 10)
Collection of or proceeds from sale/disposal of:
Available-for-sale financial assets (Note 10)
Property and equipment (Note 14)
Notes receivable (Notes 8)
Years Ended December 31

2013
2012
P
= 13,782
=12,072
P
=10,869
P
4,301
2,958
1,049
4,001
2,818
947
3,679
3,073
772
(3,167)
(471)
(385)
(222)
(230)
(2,286)
(405)
(462)
159
(22)
(1,765)
(561)
(652)
201
(687)
472
18,087
569
17,391
(378)
374
522
15,447
(540)
(934)
154
(377)
(467)
359
(83)
(257)
556
(598)
93
267
(1,532)
784
106
15,748
(1,166)
603
15,185
(1,375)
833
121
16,522
(984)
333
15,871
587
477
27
16,856
(990)
561
16,427
633
(1,270)
808
(3,613)
(311)
(208)
9
(64)
533
405
66
327
405
276
561
1,320
21
1,151
20
12
954
(Forward)
*SGVFS008665*
-2Years Ended December 31

2013
2012
2014
Additions to/issuance of:
Service concession assets (Note 13)
Investments in equity method investees (Note 11)
Available-for-sale financial assets (Note 10)
Deferred project cost (Note 15)
Property and equipment (Note 14)
Notes receivable (Notes 4 and 8)
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt of or proceeds from:
Notes payable and long-term debt (Note 19)
Sale to non-controlling stockholders (Note 22)
Contribution from non-controlling stockholders and
other movements (Note 33)
Issuance of shares (Notes 22 and 31)
Payments of/for:
Interest and other financing charges
Notes payable and long-term debt (Note 19)
Service concession fees payable (Note 18)
Acquisition of non-controlling interests (Note 4)
Transaction costs on issuance of shares
Debt issuance cost
Dividends paid to owners of the Parent Company
(Note 22)
Dividends paid to non-controlling stockholders
(Notes 6 and 22)
Net cash from (used in) financing activities
(P
= 6,678)
(6,329)
(4,351)
(1,869)
(1,508)
(19,027)
(P
=5,780)
(1,846)
(4,238)
(1,343)
(101)
(14,521)
(P
=6,752)
(6,262)
(50)
(825)
(6,797)
(19,146)
13,905
10,108
41,254
3,533
5,030
698
61
4
6,343
49
6
(3,215)
(3,677)
(1,184)
(12)
(3,116)
(162)
(4,871)
(40,573)
(1,266)
(4)
(140)
(199)
(3,059)
(1,588)
(1,116)
(5)
(696)
(2,297)
(915)
(668)
(1,178)
9,931
(1,985)
1,181
(1,231)
(3,278)
6,089
2,531
(5,997)
CASH AND CASH EQUIVALENTS

AT BEGINNING OF YEAR
11,636
9,105
15,102
CASH AND CASH EQUIVALENTS

AT END OF YEAR (Note 7)
P
= 17,725
=11,636
P
=9,105
P
NET (DECREASE) INCREASE IN CASH

AND CASH EQUIVALENTS
*SGVFS008665*

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
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 in Notes 2 and 11, respectively.
MPIC is 55.8% owned by Metro Pacific Holdings, Inc. (MPHI) as at December 31, 2014 and
2013. MPHIs economic interest in MPIC is reduced from 55.8% to 52.1% as at February 26,
2015 as a result of the overnight placement on February 9, 2015 (see Note 39).
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, 2014 and 2013 and for
each of the three years in the period ended December 31, 2014 were approved and authorized for
issuance by the Board of Directors (BOD) on February 26, 2015.
2. Summary of Significant Accounting Policies

Basis of Preparation
The consolidated financial statements are prepared on a historical cost basis, except for derivatives
and 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.
Statement of Compliance
The consolidated financial statements are prepared in compliance with Philippine Financial
Reporting Standards (PFRS).
*SGVFS008665*
-2Basis of Consolidation
The consolidated financial statements of the Company include the accounts of the Parent
Company and its subsidiaries. Control is achieved when the Company is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Company controls an investee if and only if
the Company has:
Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
When the Company has less than a majority of the voting or similar rights of an investee, the
Company considers all relevant facts and circumstances in assessing whether it has power over an
investee, including:
The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Companys voting rights and potential voting rights
The Company re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control.
Subsidiaries of the Company also included structured entities that were set-up for the benefit of
the Company. Based on contractual terms, the Company assessed that the voting rights in these
structured entities are not the dominant factor in deciding who controls these structured entities.
Thus, these entities were assessed to be structured entities and controlled by the Company under
PFRS 10, Consolidated Financial Statements. The voting shares of the third-party stockholders in
these structured entities are accounted for as non-controlling interest. The Company does not have
interests in unconsolidated structured entities.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the consolidated statement
of comprehensive income from the date the Company gains control until the date the Company
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the
equity holders of the Parent Company and to the non-controlling interests (NCIs), even if this
results in the NCIs having a deficit balance. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies in line with the Companys
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Company are eliminated in full on consolidation.
NCI represents the portion of profit or loss and the net assets not held by owners of the Parent
Company and are presented separately in the consolidated statement of comprehensive income
and within equity in the consolidated statement of financial position, separately from total equity
attributable to owners of the Parent Company.
*SGVFS008665*
-3A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. If the Company loses control over a subsidiary, it:
Derecognizes the assets (including goodwill) and liabilities of the subsidiary

Derecognizes the carrying amount of any NCI
Derecognizes the related OCI
Recognizes the fair value of the consideration received
Recognizes the fair value of any investment retained
Recognizes any surplus or deficit in profit or loss
Reclassifies the Parent Companys share of components previously recognized in OCI to
profit or loss or retained earnings, as appropriate, as would be required if the Company had
directly disposed of the related assets or liabilities
The consolidated subsidiaries of MPIC are as follows:
Name of Subsidiary
Place of
Incorporation
MPIC Subsidiaries
Metro Pacific Tollways Corporation (MPTC)
Maynilad Water Holding Company, Inc. (MWHC) (a)
Metro Pacific Light Rail Corp. (MPLRC)
Porrovia Corporation (b)
MetroPac Water Investments Corporation (MPWIC)
Metro Pacific Hospital Holdings, Inc. (MPHHI)(c)
MPIC-JGS Airport Holdings, Inc. (MPIC-JGS) (d)
Fragrant Cedar Holdings, Inc. (FCHI)
Neo Oracle Holdings, Inc (NOHI) (e)
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
MPIC Infrastructure Holdings Limited (f) (MIHL)

Metro Global Green Waste, Inc. (g)
Principal Activity
December 31, 2014

MPIC
Direct
MPIC
Direct Interest of
Effective
Interest Subsidiary
Interest
(In %)
December 31, 2013

MPIC
Direct
MPIC
Direct Interest of
Effective
Interest Subsidiary
Interest
(In %)
99.88
51.27
100.00
50.00
100.00
85.62
58.75
100.00
50.00
99.88
51.27
100.00
100.00
100.00
85.62
58.75
100.00
99.88
51.27
100.00
50.00
100.00
100.00
58.75
100.00
50.00
99.88
51.27
100.00
100.00
100.00
100.00
58.75
100.00
BVI
Philippines
Investment holding
Investment holding
Investment holding
Investment holding
Investment holding
Investment holding
Investment holding
Real Estate
Investment holding
and Real estate
Investment holding
Investment holding
96.60
100.00
70.00
96.60
100.00
70.00
96.60
100.00
96.60
100.00
Philippines
Philippines
Investment holding
Tollway operations
100.00
75.60
99.88
75.50
100.00
67.10
99.88
67.00
Philippines
Philippines
Tollway operations
Investment holding
100.00
57.00
100.00
95.55
100.00
57.00
100.00
95.55
Philippines
Philippines
Philippines
Philippines
Tollway operations
Investment holding
Investment holding
Investment holding
100.00
99.99
99.99
51.00
99.85
99.97
99.97
99.97
100.00
99.99
99.99
51.00
99.85
99.97
99.97
99.97
MIHL Subsidiaries (f)

FPM Infrastructure Holdings Limited (FPM Infra)
FPM Tollway Holdings Limited
FPM Tollway (Thailand) Limited
AIF Toll Road Holdings (Thailand) Co., Ltd (AIF)
BVI
BVI
Hong Kong
Thailand
Investment holding
Investment holding
Investment holding
Investment holding
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
MWHC Subsidiary (a)

Maynilad Water Services, Inc. (Maynilad)
Philippines
Water and sewerage

services
5.19
92.85
52.80
5.19
92.85
52.80
100.00
52.80
100.00
52.80
100.00
52.80
100.00
52.80
MPTC Subsidiaries
Operating Subsidiaries
Metro Pacific Tollways Development Corporation
(MPTDC)
Manila North Tollways Corporation (MNTC)(h)
Cavitex Infrastructure Corporation (CIC) and
subsidiaries (i)
Metro Strategic Infrastructure Holdings, Inc. (MSIHI)
Dormant Subsidiaries
Luzon Tollways Corporation (LTC)
Collared Wren Holdings, Inc. (CWHI) (j)
Larkwing Holdings, Inc. (LHI) (j)
MPCALA Holdings, Inc. (MHI) (j)
Maynilad Subsidiaries
Amayi Water Solutions, Inc. (AWSI)
Philippines
Philippine Hydro, Inc. (PHI)
Philippines
Water and sewerage

services
Water and sewerage
services
MPHHI Subsidiaries (c)

Riverside Medical Center, Inc (RMCI) (c)
East Manila Hospital Managers Corp. (EMHMC) (c)
Asian Hospital Inc. (AHI) (c)
Colinas Verdes Hospital Managers Corp. (CVHMC) (c)
Bumrungrad International Philippines Inc. (BIPI) (c)
De Los Santos Medical Center Inc. (DLSMC)
The Megaclinic, Inc. (Megaclinic) (k)
Central Luzon Doctors Hospital, Inc. (CLDH)
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Philippines
Hospital operation
Hospital operation
Hospital operation
Hospital operation
Investment holding
Hospital operation
Clinic Management
Hospital operation
57.50
100.00
85.56
100.00
100.00
51.00
51.00
51.00
43.67
85.62
73.26
85.62
85.62
43.67
43.67
43.67
51.00
100.00
5.66
100.00
100.00
79.90
51.00
51.00
51.00
51.00
100.00
85.56
100.00
100.00
51.00
51.00
51.00
RMCI Subsidiary
Riverside College, Inc. (RCI)
Philippines
School operations
100.00
43.67
100.00
51.00
CVHMC Subsidiary
Colinas Healthcare, Inc.
Philippines
Clinic Management
100.00
85.62
100.00
100.00
*SGVFS008665*
-4December 31, 2014

Direct
MPIC
MPIC
Direct Interest of
Effective
Interest Subsidiary
Interest
(In %)
December 31, 2013

MPIC
Direct
MPIC
Direct Interest of
Effective
Interest Subsidiary
Interest
(In %)
Name of Subsidiary
Place of
Incorporation
Principal Activity
MPLRC Subsidiaries
Light Rail Manila Holdings Inc.(LRMHI) (l)
Light Rail Manila Corporation (LRMC) (l)
Light Rail Manila Holdings 2, Inc. (LRMH2) (m)
Philippines
Philippines
Philippines
Investment holding
Rail operations
Investment holding
50.00
55.00
50.00
50.00
55.00
50.00
Philippines
Philippines
Philippines
Investment holding
Management services
Investment holding
100.00
100.00
50.00
96.60
96.60
48.30
100.00
100.00
50.00
96.60
96.60
48.30
Philippines
Real estate
100.00
96.60
100.00
96.60
Philippines
Philippines
Philippines
Philippines
Management services
Investment holding
Investment holding
Investment holding
100.00
100.00
100.00
60.00
96.60
96.60
96.60
57.96
100.00
100.00
100.00
60.00
96.60
96.60
96.60
57.96
NOHI Subsidiaries
Operating Subsidiaries
First Pacific Bancshares Philippines, Inc.
Metro Pacific Management Services, Inc.
First Pacific Realty Partners Corporation (FPRPC)
Preoperating Subsidiary
Metro Tagaytay Land Co., Inc. (MTLCI)
Dormant Subsidiaries
Pacific Plaza Towers Management Services, Inc.
Philippine International Paper Corporation
Pollux Realty Development Corporation
Metro Asia Link Holdings, Inc. (MALHI)
(a)
Effective February 2014, DMCI-MPIC Water Company, Inc. changed its corporate name to Maynilad Water Holding Company, Inc.
Effective June 2014, Light Rail Manila Corporation changed its corporate name to Porrovia Corporation.
Effective February 2015, Neptune Stroika Holdings, Inc. (NSHI) changed its corporate name to MPHHI. The non-controlling shareholder of MPHHI also holds an
Exchangeable Bond issued by MPIC which can be exchanged into a 25.51% stake in MPHHI in the future, subject to certain conditions. With the Exchangeable Bond, the noncontrolling shareholder is entitled to 39.89% effective ownership interest in MPHHI (see Note 22). Prior to the entry of the non-controlling shareholder, MPIC restructured its
investments in the hospital companies by transferring all directly owned hospitals to MPHHI.
(d)
On March 11, 2013, the Company and JG Summit Holdings, Inc. (JG Summit) formed MPIC-JGS to bid for airport projects that will be rolled out by the Government in the
future.
(e)
Formerly Metro Pacific Corporation (MPC). NOHIs corporate life ended December 31, 2013 and is currently under the process of liquidation.
(f)
On July 31, 2014, FPC transferred its 75% shareholding in FPM Infra to MPIC through MIHL. Prior to the transfer, MPIC effectively held 25% in FPM Infra (see Note 11).
(g)
Incorporated on November 7, 2014 as an investment holding company for the Companys waste-to-energy projects (see Note 33).
(h)
See Note 4 - Acquisition of Non-Controlling Interest in MNTC.
(i)
Interest in CIC is held through a Management Letter Agreement.
(j)
These companies were incorporated in September 2013 to bid for toll road projects that will be rolled out by the Government in the future.
(k)
Effective October 29, 2014, DLS-STI Megaclinic, Inc. changed its corporate name to The Megaclinic, Inc.
(l)
Incorporated in 2014 in relation to the Concession Agreement for the 65-billion Light Rail Transit Line 1 Cavite Extension and Operations & Maintenance Project
(see Note 33).
(m)
On November 19, 2014, MPIC and AC Infrastructure Holdings Corporation (AC Infra) incorporated LRMH2 to bid for the operation and maintenance contract of the Light Rail
Transit Line 2. Actual bidding for the project is targeted for the third quarter of 2015.
(b)
(c)
Changes in Accounting Policies and Disclosures

The accounting policies adopted are consistent with those of the previous financial year, except for
the following voluntary changes in accounting policies and adoption of new and amended PFRS
and Philippine interpretations effective January 1, 2014.
Voluntary change in accounting policies - Change in amortization method of the service
concession asset of MNTC Beginning January 1, 2014, the service concession asset of MNTC
is amortized on a unit of production (UOP) basis. MPTC determined that it is more appropriate to
use the UOP basis for amortizing the service concession asset as the economic benefit of this asset
is more closely aligned with the traffic volume and kilometers travelled for the segments of the
toll road using an open toll collection system and closed toll collection system, respectively.
The change in the method of amortization is also consistent with the toll segments move to unify
the accounting policies of its subsidiaries. This change in accounting policy resulted in a decrease
in amortization expense by =
P131.0 million of the service concession asset for the year ended
December 31, 2014.
Under the UOP basis, the amortization expense is expected to decrease in the earlier period and
increase in the later period of the concession term compared with the straight-line method of
amortization. The calculation of the UOP amortization is subject to other variables such as
additional capital expenditures and re-estimation of projected traffic, and actual traffic volume
during the year. Given that the projected and actual traffic volume fluctuate, it is not practicable
to estimate the impact for the succeeding periods.
*SGVFS008665*
-5Adoption of new and amended standards and interpretations
PAS 32, Offsetting Financial Assets and Financial Liabilities (Amendments) These
amendments clarify the meaning of currently has a legally enforceable right to set-off and
the criteria for non-simultaneous settlement mechanisms of clearing houses to qualify for
offsetting. These amendments affected the presentation only and had no impact on the
Companys financial position or performance.
Annual Improvements to PFRSs (2010-2012 Cycle) PFRS 13, Fair Value Measurement
Short-term Receivables and Payables This amendment clarifies that short-term receivables
and payables with no stated interest rates can be held at invoice amounts when the effect of
discounting is immaterial. This amendment had no material impact on the Companys
financial position or performance.
The following standards were also adopted but did not have any impact on the Companys
consolidated financial statements:
PFRS 10, PFRS 12 and PAS 27, Investment Entities (Amendments) These amendments
provide an exception to the consolidation requirement for entities that meet the definition of
an investment entity under PFRS 10, Consolidated Financial Statements. The exception to
consolidation requires investment entities to account for subsidiaries at fair value through
profit or loss.
PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and
Continuation of Hedge Accounting (Amendments) These amendments provide relief from
discontinuing hedge accounting when novation of a derivative designated as a hedging
instrument meets certain criteria. The Company has not novated any of its derivatives during
the current period. However, these amendments would be considered for any future
novations.
Philippine Interpretation IFRIC 21, Levies IFRIC 21 is effective for annual periods
beginning on or after January 1, 2014 and is applied retrospectively. It is applicable to all
levies imposed by governments under legislation, other than outflows that are within the scope
of other standards (e.g., PAS 12, Income Taxes) and fines or other penalties for breaches of
legislation. The interpretation clarifies that an entity recognizes a liability for a levy no earlier
than when the activity that triggers payment, as identified by the relevant legislation, occurs.
It also clarifies that a levy liability is accrued progressively only if the activity that triggers
payment occurs over a period of time, in accordance with the relevant legislation. For a levy
that is triggered upon reaching a minimum threshold, no liability is recognized before the
specified minimum threshold is reached.
Annual Improvements to PFRSs (2011-2013 Cycle) PFRS 1, First-time Adoption of PFRS

Meaning of Effective PFRS This amendment clarifies that an entity may choose to apply
either a current standard or a new standard that is not yet mandatory, but that permits early
application, provided either standard is applied consistently throughout the periods presented
in the entitys first PFRS financial statements.
The principal accounting and financial reporting policies adopted in preparing the Companys
consolidated financial statements are as follows:
*SGVFS008665*
-6Business 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 remeasured 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 reassessment 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.
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.
*SGVFS008665*
-7If 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. 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.
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 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.
*SGVFS008665*
-8After 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 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.
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.
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 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.
*SGVFS008665*
-9The 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).
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 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.
*SGVFS008665*
- 10 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 and Short-term Deposits
Restricted cash represents cash in banks earmarked for long-term debt principal and interest
repayment maintained in compliance with the loan agreement. 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.
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, reevaluates 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.
*SGVFS008665*
- 11 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.
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.
*SGVFS008665*
- 12 The Companys financial asset at FVPL as at December 31, 2013 consisted of bifurcated
derivatives only, which derivative asset was derecognized in 2014 (see Note 36).
The interest rate swap entered in 2011 constituting the Companys financial liability at FVPL as at
December 31, 2011 was preterminated on December 15, 2012 (see Note 19).
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, investments in preferred shares with mandatory redemption
feature, restricted cash and other deposits, and due from related parties (see Notes 7, 8, 9, and 21).
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 investments in fixed rate retail treasury bonds of the Republic of the Philippines
(ROP) that were previously classified as HTM investments prior to 2010. In view of the
pretermination of the HTM investments in 2010, the fixed rate retail treasury bonds were
reclassified to AFS financial assets and continues to be presented as such (see Notes 10 and 36).
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.
*SGVFS008665*
- 13 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 Other comprehensive income 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 costing 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, 2014 and 2013, this category includes investments in quoted and unquoted
common shares and preferred shares, Unit Investment Trust Fund, investments in golf shares and
investments in bonds (see Notes 7, 10 and 11).
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.
All of the Companys financial liabilities, except for derivative liabilities, are classified as other
financial liabilities which include the following, among others:
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 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 debt.
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.
*SGVFS008665*
- 14 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 2013 designated as fair
value hedges or hedges of a net investment in a foreign operation as at December 31, 2013.
The Company has no derivatives as at December 31, 2014.
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.
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.
*SGVFS008665*
- 15 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.
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.
*SGVFS008665*
- 16 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.
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 writeoff 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.
*SGVFS008665*
- 17 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. 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 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.
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.
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.
*SGVFS008665*
- 18 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. This is not generally the case with master netting agreements, and the related
assets and liabilities are presented at gross amounts in the consolidated statement of financial
position.
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; weighted average method for the tollways and the water segment. Inventories
and NRV basis for each of the segment are enumerated below:
Segment
Water & Tollways
Tollways
Inventories
Spare parts, materials and supplies
Transponders and magnetic cards
NRV basis
Current replacement cost
Estimated selling price in the ordinary course of business less
estimated costs necessary to make the sale
Healthcare
Medicines and hospital supplies
Estimated selling price in the ordinary course of business less

direct cost to sell
Real Estate for Sale

Real estate for sale, which is included as part of Other current assets in the consolidated
statement of financial position, is carried at the lower of cost and NRV. Cost includes the
acquisition cost of the land plus all costs directly attributable to the acquisition for projects where
the Company is the landowner, and includes actual development costs incurred up to end of
reporting period for projects where the Company is both the landowner and developer. Where the
Company is only a developer, the cost of real estate for sale pertains only to the actual
development costs. NRV is the selling price in the ordinary course of business less estimated
costs to complete and make the sale.
*SGVFS008665*
- 19 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 obligations 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. 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:
Method
UOP
Straight-line
(a)
Company
Maynilad, CIC and MNTC (a)
PHI
Prior to 2014, MNTC used the straight-line method of amortization (see Note 2 Changes in Accounting Policies)
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 is expected to be fully
amortized by then, will be handed over to the Grantor with no consideration.
*SGVFS008665*
- 20 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 either to 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
Land improvements
Building and building improvements
Office and other equipment, furniture and fixtures
Transportation equipment
Instruments, tools and other equipment
Library books
25 years or lease term

whichever is shorter
5 years
530 years
25 years
25 years
25 years
35 years
The assets residual values, useful lives and depreciation method are reviewed, and adjusted if
appropriate, at each reporting date.
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.
*SGVFS008665*
- 21 Intangible Assets
Intangible assets, other than 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 Note 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 the asset and are recognized in
profit or loss when the 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.
Software Cost. Software cost (included as part of Other noncurrent assets account in the
consolidated statement of financial position) includes the cost of software purchased from a third
party, and other direct costs incurred in the software configuration and interface, coding and
installation of hardware, including parallel processing and data conversion. Software cost is
amortized on a straight-line basis over the estimated useful life of five years. The carrying cost is
reviewed for impairment whenever there is an indication that software cost may be 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
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
*SGVFS008665*
- 22 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 are generally covering 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 its remaining
useful life.
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.
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. They are stated at
the lower of carrying amount and fair value less costs to sell and are presented as current assets in
the statement of financial position.
Customers Guaranty Deposits
Customers guaranty deposits (included as part of Deferred credits and other long-term
liabilities account in the consolidated statement of financial position) are initially measured at fair
value. After initial recognition, these deposits are subsequently measured at amortized cost using
the effective interest method. The discount is amortized over the remaining concession period
using the effective interest method.
*SGVFS008665*
- 23 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.
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 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.
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 equity.
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 Executive Stock Option Plan (ESOP).
Other Comprehensive Income Reserve. OCI reserve comprises items of income and expenses that
are recognized directly in equity. Certain OCI items are to be reclassified to profit or loss 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 amount of borrowing costs incurred during that
period.
*SGVFS008665*
- 24 Capitalization of borrowing costs commences when the activities necessary to prepare the asset for
intended use are in progress and expenditures and borrowing costs are being incurred. Borrowing
costs are capitalized until the asset is available for their 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
General. 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.
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 presented 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.
*SGVFS008665*
- 25 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.
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 Revenue. Revenue is recognized upon rendering of medical services and sale of
medicines and other pharmaceutical products.
School Revenue - Tuition and Other School Fees. 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.
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
method.
Dividend Income. Revenue is recognized when the right to receive the payment is established
which is upon the declaration date.
Guarantee Fees. Guarantee fees are recognized in accordance with the terms of the
agreement.
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.
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.
*SGVFS008665*
- 26 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.
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 revenue 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. The Parent Company and MPTC 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, the Parent
Company, MPTC and MPTDC, being 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, the Parent Company, MPTC and MPTDC 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.
*SGVFS008665*
- 27 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 and other expenses related to the defined benefit plan
are recognized in profit or loss.
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. MPICs 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 nonroutine 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.
*SGVFS008665*
- 28 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.
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, shortterm 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.
Share-based Payment
The Company has an ESOP for eligible executives to receive remuneration in the form of sharebased 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.
*SGVFS008665*
- 29 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.
Where 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
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.
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.
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.
*SGVFS008665*
- 30 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 credits in the consolidated statement 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 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.
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
*SGVFS008665*
- 31 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 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:
Where 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
Receivables and payables that 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 and 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.
*SGVFS008665*
- 32 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.
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.
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.
Determination of Functional Currency. Based on the economic substance of the underlying
circumstances relevant to the Parent Company, the functional currency of the Parent Company has
been determined to be the Philippine Peso. The Philippine Peso is the currency of the primary
economic environment in which the Parent Company operates. It is the currency that mainly
influences revenue and expenses.
On the same manner of assessment, the functional currency of each of the Companys subsidiaries
are determined individually, which is either similar or different from the functional currency of the
Parent Company but are translated to the presentation currency for purposes of the consolidated
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 LetterAgreement (MLA) (see Note 4). 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.
Consolidation of structured entities. Subsidiaries included structured entities that were set-up for
the benefit of the Company. Based on contractual terms, the Company assessed that the voting
rights in these structured entities are not the dominant factor in deciding who controls these
structured entities. Thus, these entities were assessed to be structured entities under PFRS 10 and,
that the Company controls these structured entities. The voting shares of the third-party
stockholders in these structured entities are accounted for as non-controlling interest in the
consolidated financial statements.
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 =
P6.5 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
*SGVFS008665*
- 33 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 noncontrolling shareholder (see Note 22).
Power to exercise significant influence. Where the Company holds less than 20% of voting rights
in an investee but the Company has the power to exercise significant influence, such an
investment is treated as an associate. In an opposite situation, where the Company holds over
20% of voting rights of an investee (but not over 50%) and the Company does not exercise
significant influence, the investment is treated as an AFS investment. However, for the following
entities, the Company applied the following judgment to determine proper investment
classification:
Costa de Madera Corporation (Costa de Madera). Despite ownership interest of 62%,

accounted for as an associate as control and management rest with the other shareholders
(see Note 11).
NE Pacific Shopping Center Corporation (NEPSCC). Despite the Company having

representation in the board of directors, interest in this entity was classified as AFS financial
asset consistent with managements intention to sell this investment in line with strategic
business review and decision to focus on infrastructure since 2008. MPIC subsequently sold
all of its shares in NEPSCC on February 28, 2014 (see Note 10).
Pacific Global One Aviation Company, Inc. (PGOACI). Despite having representation in the
board of directors, the interest in this entity is classified as AFS financial asset because
management and operations are accorded to the other incorporators. Interest in this entity is
solely to have ready access to aircraft transportation services which is necessary for aerial
surveys and other related emergencies and uses (see Note 10).
Interests in Landco. Prior to December 2014, the Parent Company classified its 19% interest in
Landcos common shares as investment in AFS Financial Asset. Following the restructuring plan
of Landco in preparation for its eventual sale, management classified and presented its interests in
Landco, including the receivables from Landco and ABHC as Assets held for sale. The Parent
Company is committed to the plan to sell its interests in Landco and has initiated actions to locate
a buyer. No impairment loss was recognized on the reclassification of the interests in Landco as at
December 31, 2014 as management expects that the fair value (estimated based on enterprise
value) less costs to sell is higher than the carrying amount (see Note 33).
Investment in Beacon Electric Asset Holdings, Inc. (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
*SGVFS008665*
- 34 the net assets of Beacon Electric, and therefore classified its investment in Beacon Electrics
common shares, as a joint venture. The Company has 50% ownership interest in Beacon
Electric through the common shares. The other 50% is held by PLDT Communications and
Energy Ventures, Inc. (PCEV).
Investment in Beacon Electrics preferred shares. In determining the appropriate accounting

policy for the Companys investment in financial instruments, factors that the Company
consider included 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 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.
Investment in Meralco directly and through Beacon Electric. Beacon Electric has 44.96% and
49.96% interest in Meralco as at December 31, 2014 and 2013, respectively. Beacon Electric,
PCEV and MPIC have agreed, under the Omnibus Investment Agreement, on certain
corporate governance matters, including Board composition, election of officers, shareholders'
action, representation to the Meralco Board, nomination of the Meralco Board Committees,
and nomination of Meralco 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 using the same Meralco shares as collateral for funding such investment. In applying
PFRS 10, the Company has made a judgment that the decision making power of Beacon
Electric over the Meralco 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 shares but is obligated to vote the Meralco shares strictly in accordance
with the instructions of the two shareholders (see Note 11). Thus, MPIC has significant
influence over Meralco and accounts for its direct interest and indirect interest in Meralco
through Beacon Electric using the equity method.
Service Concession Arrangements. In applying Philippine Interpretation IFRIC 12, the Company
has made a judgment that the service concession arrangements of the Companys water (Maynilad
and PHI), tollway (MNTC and CIC) and rail (LRMC) businesses 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 2 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. Beginning
January 1, 2014, MNTC uses the UOP method for amortizing its service concession assets as
it determined that the economic benefit of these assets are more closely aligned with traffic
volume and kilometers travelled (see Note 2). 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.
*SGVFS008665*
- 35 The total carrying values of service concession assets amounted to =

P98,259.7 million and
P
=94,539.9 million as at December 31, 2014 and 2013, respectively (see Note 13).
Construction revenue and costs. The Company recognizes construction revenues and costs in
accordance with PAS 11 (see Note 2). Given that the rehabilitation 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 =
P6,669.6 million, P
=5,557.0 million and =
P6,730.7 million
for the years ended December 31, 2014, 2013 and 2012, respectively. Construction costs
recognized in the consolidated statements of comprehensive income amounted to
P
=6,500.5 million, P
=5,432.0 million and P
=6,608.0 million for the years ended
December 31, 2014, 2013 and 2012, 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. MNTC and CIC recognize
provision following PAS 37 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
P
=272.4 million and =
P433.0 million as at December 31, 2014 and 2013, respectively, and these
are presented under Provisions account in the consolidated statements of financial position
(see Note 17).
Lease Agreement Qualifying as Business Combination. CVHMC and EMHMC entered into lease
agreements with the Roman Catholic Archbishop of Manila (RCAM), and Our Lady of Lourdes
Hospital, Inc. (OLLHI) and Servants of the Holy Spirit, Inc. (SSps), respectively. The Company
has assessed that the lease agreements meet the definition of a business combination, particularly
since EMHMC and CVHMC have obtained control over the operations and management of
hospitals, hence, both lease agreements qualify as acquisitions of businesses and were accounted
for in accordance with PFRS 3, resulting in the recognition of property use rights (see Note 14).
Transitional and Clarificatory Agreement (TCA). On August 9, 2007, Maynilad entered into a TCA
with MWSS to prescribe the procedures for the resolution of their dispute (see Note 32).
Pending resolution of the dispute, the disputed amounts of P
=5.0 billion and =
P4.9 billion as at
December 31, 2014 and 2013, respectively, are considered contingent liabilities. Prior to 2012, no
reversal of accrued interest payable was made pending resolution of the matter in accordance with the
dispute requirements of the TCA. However, with the prescription of the TCA and in light of
Maynilads current negotiations and outstanding offer of US$14 million to fully settle the claim of
MWSS, Maynilad reversed a portion of the accrued interest payable amounting to =
P378.1 million to
other income in 2012. Likewise, the Company reassessed and derecognized the contingent liability
amounting to =
P686.6 million recognized in the Companys consolidated financial statements as a
result of the application of the accounting for business combinations when the Company acquired
control of Maynilad (see Note 27).
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.
*SGVFS008665*
- 36 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, Goodwill and Gain on Bargain Purchase.
The Company accounts for the acquired businesses 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 in the consolidated statement of financial position 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 =
P18,308.2 million as at December 31, 2014 and 2013
(see Note 12). The acquisition of CLDH in 2013 resulted in a gain on bargain purchase of
P
=22.1 million based on the purchase price allocation (see Notes 4 and 27).
Impairment of Loans and 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.
*SGVFS008665*
- 37 The carrying values of receivables, net of allowance for doubtful accounts, amounted to
=
P3,939.3 million and =
P4,342.0 million as at December 31, 2014 and 2013, respectively. Allowance
for doubtful accounts amounted to =
P879.0 million and =
P866.7 million as at December 31, 2014 and
2013, 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 was recognized for AFS financial asset amounting to =
P100.2 million for the year
ended December 31, 2014 while there was no impairment loss for the years ended December 31,
2013 and 2012. The carrying value of AFS financial assets, including UITF classified as shortterm deposits (see Note 10) and investments in Beacon Electric preferred shares (see Note 11),
amounted to =
P19,076.1 million and P
=16,385.3 million as at December 31, 2014 and 2013,
respectively (see Notes 9, 10, 11 and 36).
Impairment of Goodwill. Goodwill is subject to annual impairment test. This requires an
estimation of the value in use of CGUs to which the goodwill is allocated. Estimating the value in
use requires the Company to estimate the expected future cash flows from the CGU and to choose
a suitable discount rate in order to calculate the present value of those cash flows. No impairment
of goodwill was recognized for each of the three years in the period ended December 31, 2014.
The carrying value of goodwill amounted to =
P18,308.2 million as at December 31, 2014 and 2013
(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.
*SGVFS008665*
- 38 The carrying values of non-financial assets subject to impairment review when impairment indicators
are present are as follows:
2013
2014
(In Millions)
Service concession assets (see Note 13)

Equity method investees (see Note 11)
Property and equipment (see Note 14)
Deferred project costs (see Note 15)
Property use rights (see Note 14)
Software costs (see Note 15)
P
= 98,260
52,846
7,368
1,869
608
67
=94,540
P
36,525
6,859
649
73
There were no impairment losses recognized on other non-financial assets for each of the three years
in the period ended December 31, 2014.
Estimated Useful Lives of Property and Equipment, Property Use Rights and Software Costs. The
useful lives of each of the item of the Companys property and equipment, property use rights, and
software costs, 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 item of property and equipment, property use rights and
software costs would increase the recorded depreciation and amortization expense and decrease the
carrying values of service concession assets, property and equipment and software costs.
There was no change in the estimated useful lives of the property use rights, property and equipment,
and software costs 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
possible consequences of audits by the tax authorities in 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 period.
*SGVFS008665*
- 39 This forecast is based on the Companys past results and future expectations on revenue and
expenses.
Maynilad 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).
Net recognized deferred tax assets amounted to =
=1,218.2 million as at
December 31, 2014 and 2013, respectively. The Companys deductible temporary difference, unused
NOLCO and MCIT for which no deferred tax assets have been recognized amounted to
=
=5,181.9 million as at December 31, 2014 and 2013, respectively
(see Notes 15 and 29).
Deferred FCDA and Deferred Credits. Maynilad is entitled to recover (refund) foreign exchange
losses (gains) arising from restatement and payments of concession fees payable. For the unrealized
foreign exchange losses, Maynilad recognized deferred FCDA as an asset since this is a resource
controlled by Maynilad as a result of past events and from which future economic benefits are
expected to flow to Maynilad. Unrealized foreign exchange gains, however, which will be refunded
to the customers, are presented as deferred credits.
In accordance with MWSS-RO Resolution No. 2009-069, the new base foreign exchange rate was
changed from =
P51.86 to =
P48.04 effective May 4, 2009.
Net deferred credits pertaining to these foreign exchange gains amounted to =
P602.4 million and
=
P478.2 million as at December 31, 2014 and 2013, respectively (see Note 20).
Retirement Costs. The cost of the defined benefit pension plan and the present value of the pension
obligation are determined using actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination
of the discount rate, future salary increases, mortality rates and future pension increases. Due to the
complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions, described in Note 25, are reviewed at
each reporting date.
Accrued retirement liability under the defined benefit plan amounted to P
=439.5 million and
P
=333.2 million as at December 31, 2014 and 2013, respectively (see Notes 20 and 25).
Share-based Payments. The Company measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments at the date at which they are
granted. Estimating fair value for share-based payments requires determining the most
appropriate valuation model for a grant of equity instruments, which is dependent on the terms and
conditions of the grant. This also requires determining the most appropriate inputs to the
valuation model including the expected life of the option, volatility and dividend yield, and
making assumptions about them. The assumptions and models used for estimating fair value for
share-based payments are disclosed in Note 31. The Company recognizes expenses based on the
estimated number of grants that will ultimately vest and will require settlement. The Companys
average turnover rate over the past few years is used to determine the attrition rate in computing
the benefit expense and the estimated liability.
Equity-based compensation expense recognized in 2014, 2013 and 2012 amounted to
P
=64.0 million, =
P18.2 million and =
P13.4 million, respectively (see Notes 25 and 31).
*SGVFS008665*
- 40 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, 2014, 2013 and 2012 amounted to
P
=440.2 million, P
P164.9 million, respectively, and presented as Personnel
costs under General and administrative expenses in the consolidated statements of
comprehensive income. LTIP liability as at December 31, 2014 and 2013 amounted to
P
P455.2 million, respectively, and is presented under Accounts payable and
other current liabilities and Deferred credits and other long-term liabilities account 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.
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, 2014, 2013 and 2012
amounted to =
P1,392.0 million, P
=1,467.7 million and P
=982.1 million, respectively. Cumulative
provisions amounted to =
P4,988.7 million as at December 31, 2014 and 2013,
respectively (see Note 17).
Contingencies. Certain subsidiaries of the 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 utilities, toll roads, power distribution and health care
services and rail. 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 2014 and 2013.
*SGVFS008665*
- 41 With the exception of the acquisition of NCI in MNTC and Megaclinic, the acquisitions below
were accounted for as business combinations using the acquisition method:
Acquisitions in 2014
There were no business combinations in 2014. However, there was an acquisition of noncontrolling interest in MNTC as disclosed below.
Acquisition of NCI in MNTC
On December 23, 2013, MPTDC and Egis Projects, SA (Egis) entered into a Share Purchase
Agreement for the sale and transfer of common shares of MNTC, representing 3.9% of the total
issued and outstanding capital stock of MNTC, held by Egis to MPTDC on January 10, 2014
(closing date). The purchase price is P
=2,056.68 per common share or a total consideration
of P
=1.5 billion, inclusive of the dividends allocable to the purchased shares amounting to
P
=48.5 million declared by MNTC on December 18, 2013 with payment date of January 31, 2014.
On July 18, 2014, MPTDC, Egis and Egis Investment Partners Philippines Inc. (EIP) entered into
a Share Purchase Agreement for EIPs acquisition of 10% of the issued and outstanding shares of
MNTC held by Egis. Egis receivable from EIP as a result of the sale of the MNTC shares
amounted to =
P3,652.7 million (Egis Receivable) or =
P2,056.68 per share. EIP, which is owned
by MPTDC at 46% and by Egis at 54%, was incorporated for the sole purpose of holding the
acquired MNTC shares. This transaction effectively provided MPTDC an additional 4.6%
economic interest in MNTC for a total consideration of =
P1.7 billion representing substantially the
amount paid for the assignment by Egis of 46% of the Egis Receivable to MPTDC.
After the abovementioned transactions, MPTDCs effective economic ownership in MNTC
increased from 67.10% to 75.6%. The increase in effective ownership in MNTC is accounted for
as an equity transaction with the premium of P
=2,374.9 million recognized in equity (see Note 22).
The premium represents the difference between the carrying value of the additional interest
acquired and the total consideration paid.
Cash consideration paid to NCI
MNTCs net assets acquired (8.5%)
Difference recognized in equity reserve
P
=3,116
(741)
P
=2,375
Acquisitions in 2013
Acquisition of CIC
In relation to the Convertible Note Agreement executed by and between MPTC and Cavitex
Holdings Inc. (CHI), MPTC, CHI with the conformity of its then subsidiary CIC, executed a
Management Letter-Agreement dated December 27, 2012, for the management of CIC by MPTC.
Under the Management Letter-Agreement, management of CIC by MPTC commenced on
January 2, 2013 and will continue until the issuance of the New CIC Shares in favor of MPTC as a
result of the conversion into or exchange of the CHI Preferred Shares for the said New CIC Shares
(Management Period). Also under the Management-Letter Agreement, MPTC shall receive all
the financial benefits from CICs operations and all losses incurred by CIC shall be borne by
MPTC. Thus, by virtue of the Management Letter-Agreement, MPTC acquired control over CIC
effective January 2, 2013.
*SGVFS008665*
- 42 CIC holds the concession for the operation and maintenance of the Manila-Cavite Toll
Expressway (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.
The allocation of the total cost of acquisition to identifiable assets, liabilities and contingent
liabilities using fair values as at January 2, 2013 is shown below:
Final Fair Values
Recognized on
Acquisition
(In Millions)
Assets
Receivables and other current assets
Concession asset (see Note 13)
Advances to contractors
Liabilities
Accrued expenses and other current liabilities
Due to a related party
Long-term debt
Provision for heavy maintenance (see Note 17)
Contingent liability (see Note 20)
Deferred tax liability - net
Other noncurrent liabilities
Total identifiable net assets at fair value
Goodwill arising on acquisition (see Note 12)
Consideration transferred
P
=746
3
9,614
73
25
664
11,125
367
420
7,005
228
1,100
163
6
9,289
1,836
4,966
P
=6,802
Total consideration transferred consists of the fair values of the Convertible Note and the related
derivative asset arising from the conversion feature amounting to P
=6.6 billion and =
P0.2 billion,
respectively. No transaction costs were incurred for the business combination.
The fair value and gross amount of the receivables amounted to P
=3.0 million. None of the
receivables have been impaired and it is expected that the full contractual amounts will be
collected.
A contingent liability at a fair value of =
P1,100.1 million was recognized at the acquisition date
arising from probable claim from a third party. As at December 31, 2014 and 2013, the contingent
liability amounted to P
P1,142.2 million, respectively, with the increase arising
from the passage of time. An indemnification asset (included in Other noncurrent assets)
amounting to =
P513.4 million as of acquisition date, was recognized in relation to such probable
claim. As at December 31, 2014 and 2013, the indemnification asset amounted to =
P548.3 million
and P
=533.0 million, respectively, with the increase arising from passage of time (see Note 15). No
further disclosures regarding the contingent liability arising from the probable claim are made by
MPTC at this time as MPTC believes that such further disclosures might be prejudicial to its
position.
*SGVFS008665*
- 43 The goodwill of P
=4,966.0 million that arose on the acquisition can be attributed to the synergies
expected to be derived from the business combination, particularly in connection with MPTCs
other existing and planned tollroad projects. None of the goodwill is expected to be deductible for
tax purposes.
Net cash outflow on acquisition is as follows:
Amount
(In Millions)
Total cash paid on acquisition(a)

Cash acquired with the subsidiary(b)
Net cash outflow
P
=6,772
(746)
P
=6,026
(a)
Cash paid on acquisition represents the cash consideration for the Convertible Notes Receivable.
Cash acquired with the subsidiary is included in cash flows from investing activities.
(b)
From January 2, 2013 (the date of acquisition) to December 31, 2013, CIC contributed
P
P251.8 million to the Companys consolidated revenue and consolidated net
income, respectively.
Acquisition of DLSMC and CLDH
On June 3, 2013, the Company, through MPHHI, acquired 51% of the voting equity interest in
DLSMC, a tertiary teaching and training hospital, by subscribing to 401,942 common shares.
Total cash paid as consideration for the acquisition amounted to =
P132.9 million. Megaclinic, an
ambulatory care center in SM Megamall, is a subsidiary of DLSMC as at acquisition date, and the
Companys first investment in a non-hospital-based diagnostic center.
On October 24, 2013, the Company completed the acquisition of 51% equity ownership in Central
Luzon Doctors Hospital, Tarlacs largest private hospital, for a total nominal consideration of
P
=188.8 million to be paid on a deferred arrangement. The fair value of the consideration is at
P
=149.6 million, of which P
=52.1 million remains outstanding as at December 31, 2013. The
funding will go towards the purchase of major medical equipment and the implementation of an
infrastructure development plan highlighted by the construction of a new building to house new
operating rooms, as well as additional patient beds and doctors clinics.
The Company acquired DLSMC and CLDH 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 net assets recognized in the December 31, 2013 financial statements were based on a
provisional assessment of fair value while MPHHI sought an independent valuation for the
property and equipment owned by DLSMC and CLDH. The valuation had not been completed by
the date the 2013 consolidated financial statements were approved for issue by the BOD.
*SGVFS008665*
- 44 In 2014, the valuation was completed and there were no differences between the provisional and
final fair value of the assets and liabilities. The provisional and final fair values of the identifiable
assets and liabilities of DLSMC and CLDH as at the date of acquisition are as follows:
DLSMC
CLDH
(In Millions)
Assets
Receivables
Liabilities
Accounts payable and accrued expenses
Other current liabilities
Long term debt
Deferred tax liability - net
Other noncurrent liabilities
Total identifiable net assets at fair value
Goodwill arising on acquisition (see Note 12)
Bargain purchase
Consideration transferred
P
=164
95
43
178
26
506
P
=128
36
19
217
52
452
160
11
64
23
258
248
(122)
7
P
=133
70
25
24
119
333
(161)
(22)
P
=150
Net cash inflow on acquisition is as follows:

DLSMC
CLDH
(In Millions)
Cash acquired with the subsidiary(a)

Total cash paid on acquisition
Net cash inflow
P
=164
(133)
P
=31
P
=128
(97)
P
=31
(a)
Cash acquired with the subsidiary is included in cash flows from investing activities.
The fair value and gross amount of DLSMCs trade receivables amounted to =
P95.0 million and
P
=154.0 million, respectively. The fair value and gross amount of CLDHs trade receivables
amounted to =
P36.0 million and =
P56.1 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 DLSMC is primarily attributed to the expected
synergies and other benefits from combining the assets and activities of DLSMC with those of the
hospitals of the Company. The goodwill is not deductible for income tax purposes. Bargain
purchase resulting from the acquisition of CLDH is included in Construction revenue and other
income in the statement of comprehensive income (see Note 27).
The non-controlling interests were recognized as a proportion of net assets acquired.
*SGVFS008665*
- 45 From the date of acquisition, DLSMC and CLDH have contributed P

=250.4 million and
P
=61.4 million, respectively, to the consolidated revenue and =
P24.9 million of net profit and
P
=0.4 million of net loss, respectively, to the consolidated net income of the Company. If the
combination had taken place at the beginning of the year, contributions to the consolidated
revenue and consolidated net income would have been =
P388.4 million of revenue and
P
=16.9 million of net profit for DLSMC and =
P356.0 million of revenue and =
P5.8 million of
net loss for CLDH, respectively, for the year ended December 31, 2013.
Total transaction costs of P
=5.3 million have been expensed. Of the total transaction costs,
=
P2.1 million was included in General and administrative expenses in the consolidated
statement of comprehensive income and are part of operating cash flows for the year ended
December 31, 2013. The remaining =
P3.2 million portion of the transaction costs were recognized
in the latter part of 2012.
Acquisition of NCI in Megaclinic
As at June 3, 2013, DLSMC had a 77.24% direct ownership interest in Megaclinic. On
August 16, 2013, DLSMC sold its entire ownership in Megaclinic to its shareholders, resulting in
the sale of 51% of its direct ownership interest in Megaclinic to MPHHI for a cash consideration
of P
=17.3 million. The 11.61% increase in effective ownership in Megaclinic is accounted for as an
equity transaction.
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.
For management purposes, the Company is organized into the following segments based on
services and products:
Water utilities, which relate to the provision of water and sewerage services by MWHC and its
subsidiaries Maynilad and PHI, and bulk water supply by MPWIC.
Toll operations, which primarily relate to operations and maintenance of toll facilities by
MPTC and its subsidiaries MNTC and CIC, and an associate, Tollways Management
Corporation (TMC), and MPICs associate, Don Muang Tollway Public Ltd (DMT).
Power distribution, which primarily relates to the operations of Manila Electric Company
(Meralco) in relation to the distribution and supply of electricity.
Healthcare, which primarily relates to operations and management of hospitals, nursing and
medical school and such other enterprises that have similar undertakings.
Rail, which primarily relates to the operations and maintenance of the Light Rail Transit
Line 1 (LRT) and construction of the LRT1 south extension by LRMC and ticketing services
by Automated Fare Collection Services, Inc. (AFCSI).
Others, which represent holding companies and operations of subsidiaries involved in real
estate and provision of services.
*SGVFS008665*
- 46 The rail segment is a new segment beginning 2014. Although the rail segment does not meet the
quantitative thresholds required by PFRS 8, Operating Segments for reportable segments as the
companies are still under the pre-operating stage, management has concluded that this segment
should be reported as it is closely monitored by the BOD, comprises of significant investments in
the Governments public-private partnership (PPP) initiatives and is expected to materially
contribute to the Groups revenue in the future.
Customer Tariffs. The Companys results of operations are highly dependent on ability to set and
collect adequate tariffs for its Water Utilities, Toll Operations and Power segments:
Maynilad
Under Maynilads concession agreement with the Philippine government (see Note 13),
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 Companys results of operations and financial condition.
For the Fourth Rate Rebasing Period, Maynilad submitted the business plan for the
determination of the Rates Adjustment Limit to be applied to the standard rates for the period
2013 to 2017. 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 P
=1.46 per cubic meter (cu.m) or P
=0.29 per cubic
meter (cu.m) per year over the next five years. Maynilad 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 RO released Resolution No. 13-011CA regarding the implementation of a status quo for Maynilads Standard Rates and Foreign
Currency Differential Adjustment (FCDA) for any and all its scheduled adjustments until such
time that the Appeals Panel has issued the Final Award.
In a decision dated December 29, 2014, the Appeals Panel upheld the alternative rebasing
adjustment of Maynilad. This will result in a 9.8% increase in the 2013 average basic water
charge of P
=31.28 per cu.m., inclusive of the P
=1.00 Currency Exchange Rate Adjustment which
the MWSS has incorporated into the basic charge (the Award). The Award translates to an
average increase of =
P3.06/cu.m. For a typical household whose monthly water consumption is
20 cu.m., this would mean an increase in the average water charge of P
=1.68 per cu.m.
While there has been a two (2)-year delay in implementing an adjustment in the average 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.
In its letter dated February 9, 2015, the MWSS and RO, who received their copy of the 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 Company, Inc., before making
any official pronouncements on the applicable resulting water rates for the two
concessionaires.
*SGVFS008665*
- 47 On February 20, 2015, Maynilad wrote the Philippine Government, through the Department of
Finance, with reference to the undertaking which the Republic of the Philippines (the
Republic) issued in favor of Maynilad on July 31, 1997 and March 17, 2010 (the
Undertaking). This Undertaking provides, amongst other things, that the Republic shall
indemnify Maynilad in respect of any losses occasioned by a delay caused by the Republic 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. Maynilads
call on the Undertaking comes after the MWSS and its RO, have chosen to defer the
implementation of the Award, despite the Award being final, binding and executory on
MWSS, the RO, and Maynilad.
As at February 26, 2015, Maynilad is still awaiting the MWSS Board of Trustees to approve
the 2015 tariff table showing the adjusted rates and the DOF reply.
MNTC and CIC
MNTC and CIC derive substantially all of their revenues from toll collections from the users
of the toll roads. The concession agreements establish a toll rate formula and adjustment
procedure for setting the appropriate toll rate. Subject to the Toll Regulatory Board validating
the calculation of the toll rate adjustment in accordance with the formula, toll rate adjustment
is scheduled every two calendar years for the NLEX and every three calendar years for the
CAVITEX.
As at February 26, 2015, MPTC continues to await approval by the Government of toll rate
adjustments for Radial Road 1 (R1) of CAVITEX and NLEX, which should have been
effective from January 1, 2012 and January 1, 2013, respectively.
Meralco
Meralco was among the first entrants to the Performance-Based Regulation (PBR). Ratesetting 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 regulatory period (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 third RP is from July 1, 2011 to June 30, 2015.
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.
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. Net
income for the year is measured consistent with consolidated net income in the consolidated
*SGVFS008665*
- 48 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.
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 the aforementioned. NRI represent gains or losses that, through
occurrence or size, are not considered usual operating items.
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, 2014, 2013 and 2012, 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 investment in DMT (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, deferred
tax and derivative assets. Difference between the combined segment liabilities and the
consolidated liabilities largely consist of deferred tax and derivative liabilities.
The following table shows the reconciliations of the Companys consolidated Core EBITDA to
consolidated net income for the years ended December 31, 2014, 2013 and 2012.
2014
2013
2012
(In Millions)
Consolidated Core EBITDA

Depreciation and amortization
Consolidated EBIT
Adjustments to reconcile with
consolidated net income:
Interest income
Share in net earnings of equity
method investees
Interest expense
Non-recurring gains (losses) - net
Consolidated net income for the year
P
=19,188
(4,007)
15,181
385
3,226
(4,290)
(850)
(1,078)
P
=12,574
=17,264
P
(3,766)
13,498
462
2,294
(3,990)
50
(835)
=11,479
P
=15,644
P
(3,845)
11,799
651
1,993
(3,668)
94
(1,662)
=9,207
P
*SGVFS008665*
- 49 The following table shows the reconciliations of Companys consolidated core income to the
Companys consolidated net income for the years ended December 31, 2014, 2013 and 2012.
2014
2013
2012
(In Millions)
Consolidated core income for

the year
Foreign exchange gains (losses) - net
Other non-recurring losses
Net tax effect of aforementioned
adjustments
Net income for the year attributable
to owners of the Parent
Company
Net income for the year attributable
to non-controlling interest
Consolidated net income for the year
P
=8,508
18
(456)
(130)
=7,229
P
70
(340)
250
=6,564
P
885
(855)
(687)
7,940
7,209
5,907
4,634
P
=12,574
4,270
=11,479
P
3,300
=9,207
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, 2014,
2013 and 2012 are detailed in the succeeding tables.
*SGVFS008665*
- 50 The following table presents consolidated information on core income and certain assets and liabilities regarding business segments for the years ended
December 31, 2014, 2013 and 2012:

Cost of sales
Gross Margin
Operating expenses
Other income (charges) - net
Profit before Financing Charges
Profit before NCI and Income Tax
Benefit from (provision for) income tax
Contribution from Subsidiaries
Contribution from Operations - Core Income
Core EBITDA
Core EBITDA Margin
Non-recurring Income (Charges)
Provision for (benefit from) income tax
Net Non-recurring Income (Charges)
Year Ended December 31, 2014 (In Millions)

Power
Healthcare
Distribution
Rail
Other Businesses
P
=6,828
P
=
P
=
P
=
(3,912)
2,916
(2,040)
(27)
(994)
161
405
(30)
(1,024)
1,037
405
(27)
(187)
2
(529)
850
405
(25)
(1,553)
(272)
5
1
(258)
4
(19)
320
405
(16)
(1,571)
145
2,622
(12)
465
3,027
(28)
(1,571)
(33)
(55)
(52)
(58)
P
=432
P
=2,972
(80)
(P
=1,629)
Water Utilities
P
=18,363
(5,431)
12,932
(2,116)
(530)
10,286
(2,007)
8,279
(3,933)
40
4,386
(10)
4,376
(278)
P
=4,098
Toll Operations
P
=8,641
(3,575)
5,066
(832)
270
4,504
(1,184)
3,320
(717)
(845)
1,758
481
2,239
(92)
P
=2,147
P
=12,841
70%
P
=5,240
61%
P
=1,709
25%
P
=405
%
(P
=27)
%
(P
=488)
(33)
243
(P
=278)
(P
=5)
(92)
5
(P
=92)
(P
=29)
(2)
(2)
(P
=33)
(P
=55)
(P
=55)
(P
=65)
13
(P
=52)
Adjustments/
Eliminations
P
=
P
=
Consolidated
P
=33,832
(12,918)
20,914
(6,009)
276
15,181
(3,905)
11,276
(4,916)
(1,078)
5,282
3,226
8,508
(568)
P
=7,940
(P
=980)
%
P
=
%
P
=19,188
57%
(P
=78)
(3)
23
(P
=58)
P
=
P
=
(P
=720)
(130)
282
(P
=568)
Assets and Liabilities

Segment assets
Consolidated Total Assets
P
=84,733
123
P
=84,856
P
=42,340
6,651
P
=48,991
P
=13,082
2,382
P
=15,464
P
=
55,310
P
=55,310
P
=1,654
488
P
=2,142
P
=7,556
221
P
=7,777
P
=19,472
P
=19,472
P
=168,837
65,175
P
=234,012
Segment Liabilities
P
=45,275
P
=34,447
P
=4,848
P
=7,188
P
=73
P
=8,381
P
=4,228
P
=104,440
P
=4,701
2,555
P
=2,569
736
P
=856
672
P
=
P
=
P
=60
44
P
=
P
=8,186
4,007
Other Segment Information

Capital expenditures Service concession assets and property
and equipment
*SGVFS008665*
- 51 -

Cost of sales
Gross Margin
Operating expenses
Core EBITDA
Core EBITDA Margin
Net Non-recurring Income (Charges)

Power
Distribution
Other Businesses
Healthcare
=
P5,828
P
=
P
=
(3,342)
2,486
(1,645)
(986)
149
405
61
990
405
(925)
(232)
(395)
758
405
(1,320)
(96)
(220)
(28)
442
405
(1,348)
139
1,928
581
2,333
(1,348)
28
(9)
(164)
P
=609
=
P2,324
(P
=1,512)
Water Utilities
=
P16,895
(5,145)
11,750
(2,428)
(515)
8,807
(1,957)
6,850
(3,322)
261
3,789
3,789
88
=
P3,877
Toll Operations
=
P8,154
(3,358)
4,796
(775)
200
4,221
(944)
3,277
(782)
(848)
1,647
227
1,874
37
=
P1,911
=
P11,078
66%
=
P5,083
62%
=
P1,578
27%
P
=405
%
P
=47
119
(78)
P
=88
(P
=106)
134
9
P
=37
P
=32
(3)
(1)
P
=28
(P
=9)
(P
=9)
Adjustments/
Eliminations
P
=
P
=
Consolidated
=
P30,877
(11,845)
19,032
(5,834)
300
13,498
(3,528)
9,970
(4,200)
(835)
4,935
2,294
7,229
(20)
=
P7,209
(P
=880)
%
P
=
%
=
P17,264
56%
(P
=156)
(8)
(P
=164)
P
=
P
=
(P
=192)
242
(70)
(P
=20)

Segment assets
=
P80,566
134
=
P80,700
=
P35,368
2,125
=
P37,493
=
P9,379
2,310
=
P11,689
P
=
44,087
=
P44,087
=
P6,859
198
=
P7,057
=
P19,558
=
P19,558
=
P151,730
48,854
=
P200,584
Segment Liabilities
=
P48,547
=
P22,362
=
P5,183
P
=
=
P7,438
=
P3,774
=
P87,304
=
P5,769
2,272
P
=474
862
P
=843
588
P
=
P
=37
44
P
=
=
P7,123
3,766

Capital expenditures Service concession assets and property and equipment
*SGVFS008665*
- 52 -

Cost of sales
Gross Margin
Operating expenses
Non-recurring charges
Core EBITDA
Core EBITDA Margin
Net Non-recurring Charges

Power
Distribution
Other Businesses
Healthcare
=
P5,140
P
=
P
=
(2,977)
2,163
(1,471)
(942)
154
561
41
846
561
(901)
(240)
(329)
606
561
(1,230)
(56)
(177)
(43)
373
561
(1,273)
134
1,651
507
2,212
(1,273)
(5)
(226)
(216)
P
=502
=
P1,986
(P
=1,489)
Water Utilities
=
P15,883
(5,375)
10,508
(2,071)
(605)
7,832
(1,898)
5,934
(2,691)
305
3,548
3,548
(109)
=
P3,439
Toll Operations
=
P6,784
(2,816)
3,968
(664)
157
3,461
(549)
2,912
(688)
(861)
1,363
208
1,571
(101)
=
P1,470
=
P10,452
66%
=
P4,145
61%
=
P1,350
26%
P
=
%
P
=719
(911)
83
(P
=109)
(P
=179)
26
52
(P
=101)
(P
=4)
(1)
(P
=5)
(P
=226)
(P
=226)
Eliminations
P
=
P
=
Consolidated
=
P27,807
(11,168)
16,639
(5,148)
308
11,799
(3,016)
8,783
(3,435)
(776)
4,572
1,993
6,565
(657)
=
P5,908
(P
=303)
%
P
=
%
=
P15,644
56%
(P
=216)
(P
=216)
P
=
P
=
P
=94
(885)
134
(P
=657)

Segment assets
=
P74,263
=
P74,263
=
P28,903
668
=
P29,571
=
P8,015
2,259
=
P10,274
P
=
41,973
=
P41,973
=
P3,498
184
=
P3,682
=
P13,717
=
P13,717
=
P128,396
45,084
=
P173,480
Segment Liabilities
=
P45,436
=
P11,986
=
P2,749
P
=
=
P15,469
=
P3,450
=
P79,090
=
P8,076
2,619
P
=254
685
P
=643
504
P
=
P
=76
37
P
=
=
P9,049
3,845

Capital expenditures Service concession assets and property and equipment
*SGVFS008665*
- 53 The following table shows the analysis and allocation of the consolidated results of operations of the Company to core and NRI, the manner by which the Company reports
and assesses its performance, makes decision and allocates resources, for the years ended December 31, 2014, 2013 and 2012, and is provided to reconcile the preceding
consolidated segment information, amounts and balances with the consolidated statements of income:
Core
OPERATING REVENUES
Water and sewerage services revenue
Toll fees
Hospital revenue
School revenue
2014
NRI Reclassification
Core
P
=18,363
8,641
6,677
151
33,832
=
P16,895
8,154
5,700
128
30,877
P
=
(13,082)
(11,845)
20,750
(6,823)
(4,301)
3,167
385
604
19,032
(5,834)
(3,990)
2,699
462
(105)
(427)
(11)
(8)
254
12,264
(192)
11
(253)
(242)
P
=18,363
8,641
6,677
151
33,832
P
=
(12,918)
(164)
GROSS PROFIT
Interest expense
Interest income
20,914
(6,009)
(4,290)
3,631
385
(129)
(164)
(814)
(11)
(59)
INCOME BEFORE INCOME TAX
14,502
(720)
13,782
5
125
130
1,160
48
1,208
COST OF SALES AND SERVICES
PROVISION FOR (BENEFIT FROM)

INCOME TAX
Current
Deferred
NET INCOME
Net Income Attributable to:
NCI
1,155
(77)
1,078
328
P
=
(405)
405
2013
(In Millions)
Consolidated
1,050
(215)
835
2012
Consolidated
Core
P
=
=
P16,895
8,154
5,700
128
30,877
=
P15,883
6,784
5,034
106
27,807
P
=
P
=
=
P15,883
6,784
5,034
106
27,807
(11,845)
(11,168)
(11,168)
19,032
(6,261)
(4,001)
2,286
462
554
16,639
(5,148)
(3,668)
2,554
651
(253)
(236)
(11)
(228)
569
12,072
10,775
94
10,869
(2)
888
886
1,097
565
1,662
(405)
405
1,061
(468)
593
1,099
(323)
776
(561)
561
Consolidated
16,639
(5,384)
(3,679)
1,765
651
877
P
=13,424
(P
=850)
P
=
P
=12,574
=
P11,429
=
P50
P
=
=
P11,479
P
=9,999
(P
=792)
P
=
P
=9,207
P
=8,508
4,916
P
=13,424
(P
=568)
(282)
(P
=850)
P
=
P
=
P
=7,940
4,634
P
=12,574
P
=7,229
4,200
=
P11,429
(P
=20)
70
=
P50
P
=
P
=
P
=7,209
4,270
=
P11,479
P
=6,564
3,435
P
=9,999
(P
=657)
(135)
(P
=792)
P
=
P
=
P
=5,907
3,300
P
=9,207
*SGVFS008665*
- 54 -
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 as at December 31, 2013,
MWHC and MNTC are the subsidiaries with NCI that are material to the Company. As at
December 31, 2014, MPHHI and LRMH are included as subsidiaries with NCI that are material to
the Company with the sell-down of MPICs interest in the Hospital group (see Note 22) and
awarding of the concession for the LRT Line 1 Cavite Extension and Operations and Maintenance
Project to LRMHs subsidiary, LRMC (see Note 33).
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 MNTCs shareholders agreement, unless otherwise agreed upon by the shareholders,
no amounts shall be distributed by way of dividends until Philippine National Construction
Corporations (PNCC) share in the project revenue collection has been repaid in full.
On February 23, 2015, Maynilads BOD approved the appropriation of its retained earnings
amounting to =
P3.5 billion for various water and sewerage projects expected to be implemented in
the next two years.
Total dividends declared to NCI amounted to =
P1,045.0 million, =
P
=1,469.8 million for the years ended December 31, 2014, 2013 and 2012. Of the total dividends
declared to NCI, P
=1,003.0 million, =
=1,460.0 million were allocable to the
NCI in MWHC and MNTC in 2014, 2013 and 2012, respectively. As at December 31, 2014 and
2013, MNTC has unpaid dividends to non-controlling shareholders amounting to =
P291.2 million
and P
=409.0 million, respectively (see Note 16).
Total dividends declared to the NCI at consolidated MPHHI level amounted to P
=42 million for the
year ended December 31, 2014. No dividends have been declared to the NCI in LRMC for the
year ended December 31, 2014.
*SGVFS008665*
- 55 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.
Equity share held by NCI
MWHC
47.20%
December 31, 2014

MNTC
MPHHI*
24.50%
39.89%
December 31, 2013

MWHC
MNTC
LRMH
47.20%
33.00%
45.00%
(In Millions)
December 31, 2012

MWHC
MNTC
43.19%
33.00%
Summarized statements of financial position

Current assets
Non-current assets**
Current liabilities
Non-current liabilities
Total equity
Attributable to:
Equity holders of MPIC
NCI
P
=11,865
79,980
13,420
33,855
44,570
P
=9,043
26,633
4,619
16,831
14,226
P
=6,148
10,148
2,702
2,169
11,425
P
=508
1,129
71
1,566
=10,785
P
77,491
15,035
35,298
37,943
P4,152
=
23,639
3,164
10,801
13,826
P8,110
=
73,348
13,540
34,308
33,610
P3,076
=
23,015
2,722
9,814
13,555
26,092
18,478
12,150
2,076
6,238
5,187
859
707
23,334
14,609
11,162
2,664
21,719
11,891
10,981
2,574
Summarized statements of comprehensive income

Revenues
Net income (loss)
Total comprehensive income (loss)
Net income (loss) attributable to NCI
Dividends declared to NCI
Dividends paid to NCI
18,363
7,817
7,830
3,690
472
472
7,517
2,536
2,567
679
531
648
6,828
756
756
379
42
39
(22)
(22)
(10)
16,895
7,277
7,392
3,434
1,407
1,405
7,101
2,341
2,329
772
680
546
15,882
6,305
6,053
2,608
897
897
6,784
1,922
1,960
634
563
325
Summarized statements of cash flows

Operating
Investing
Financing
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
9,996
(4,081)
(4,593)
1,322
2,905
P
=4,227
3,943
(6,518)
4,027
1,452
1,502
P
=2,954
1,513
(1,096)
3,352
3,769
858
P
=4,627
11,073
(9,626)
(2,474)
(1,027)
3,932
=2,905
P
3,433
(3,192)
(1,417)
(1,176)
2,678
=1,502
P
12,045
(7,060)
(5,293)
(308)
4,240
=3,932
P
3,474
(189)
(1,728)
1,557
1,121
=2,678
P
59
(1,129)
1,577
507
P
=507
*Includes the 25.51% equivalent shares of the Exchangeable bond (see Note 22)
**Includes goodwill recognized as at acquisition date (see Note 12)
*SGVFS008665*
- 56 -
7. Cash and Cash Equivalents, Short-term Deposits and Restricted Cash

Cash and Cash Equivalents and Short-term Deposits. This account consists of:
2013
2014
(In Millions)

Short-term deposits (see Note 10)
P
= 17,725
8,033
P
= 25,758
=11,636
P
3,627
=15,263
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. Beginning
2014, the short-term deposit account included 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:
2014
2013
2012
(In Millions)
Cash on hand and in banks

Short-term deposits that qualify
as cash equivalents
P
=3,261
=2,556
P
=1,528
P
14,464
P
=17,725
9,080
=11,636
P
7,577
P9,105
=
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 (see Notes 19 and 26).
Interest earned from cash and cash equivalents, short-term deposits and restricted cash amounted
to =
P253.0 million, =
P295.0 million and P
=504.6 million for the years ended December 31, 2014,
2013 and 2012, respectively (see Note 26).
*SGVFS008665*
- 57 -
8. Receivables
This account consists of:
2013
2014
(In Millions)
Trade receivables (see Note 21)

Advances to customers
Notes receivable (see Note 21)
Advances to affiliates
Advances to officers and employees
Accrued interest receivables
Dividends receivable (see Note 11)
Others
=2,780
P
441
1,033
102
80
285
28
460
5,209
867
4,342
3,749
=
P593
P
= 3,466
373
150
102
73
51
41
562
4,818
879
3,939
3,676
P
= 263
Less allowance for doubtful accounts

Less current portion
Noncurrent portion
Notes Receivable. Notes receivable as at December 31, 2014 and 2013 consist of the following:
Description
Terms
Maturity
=164.1 million loan to Landco (a)

P
12% interest rate per annum
December 31, 2014
=133.4 million loan to AB Holding

P
Corporation (ABHC) (a)
=100.0 million loan to Landco Pacific
P
Corporation (Landco) (a)
Preferred Shares issued by Landco (b)
10% interest rate per annum
August 30, 2015
133
10% interest per annum
March 15, 2017
100
With mandatory
redemption feature
7% interest per annum
August 2020
355
150
P
=150
101
180
=
P1,033
=
P101.4 million loan by MetroPac Water
Investments Corp. (MPWIC) to
Manila Water Consortium, Inc.
(MWCI) (c)
Others (d)
Total notes receivable
Various
Payable within one

year from issuance
Various
2014
(in Millions)
P
=
2013
P
=164
Additional information on the notes receivable as follows:

a. The loans to ABHC and Landco as at December 31, 2013 are secured by a pledge of Landco
shares owned by ABHC. In 2014, following the restructuring plan of Landco in preparation
for its eventual sale, management classified its interests in Landco, including the receivables
in Landco and ABHC, as assets held for sale (see Note 33).
b. In 2014, the carrying value of the preferred shares, including dividends in arrears and the
derivative asset arising from the conversion option feature, were classified as common shares
following conversion of the preferred shares to 2,429,504 common shares of Landco.
The conversion of the preferred shares to common shares, which is part of the restructuring
plan of Landco in preparation for its eventual sale, resulted to an increase in the interest in
Landco from 19.0% to 38.1%. Management classified its entire interests in Landco as assets
held for sale as at December 31, 2014 (see Note 33).
*SGVFS008665*
- 58 c. In May 2013, MPWIC and MWCI entered into a loan agreement in relation to the project with
Cebu Manila Water Development, Inc. (CMWD) amounting to =
P70.2 million payable within
one year from issuance (see Note 21). An additional loan of P
=31.2 million was made in
September 2013. These loans, together with corresponding interest were fully settled in
January 2014.
d. Other notes receivable aggregating P
=150.0 million and P
=180.0 million comprising of defaulted
loans are fully provided with allowance as at December 31, 2014 and 2013.
Trade Receivables. Trade receivables mainly include receivables from customers arising from:
Water, sewerage services and bulk water supply, which receivables are non-interest bearing
and generally have 60-day term;
Health care services, which the Company generally provides a 30-day credit term to its selfpay, HMO, international insurance, PhilHealth and corporate accounts.
Advances and Other Receivables. Advances include advances to customers, affiliates and officers
and employees and 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.
Movements in the allowance of individually and collectively assessed impaired receivables in
2014 and 2013 are as follows:
2014
Balance at
January 1,
2014
Provisions
(Write-off)/
(see Note 24) Reclassification
Balance at
December 31,
2014
(In Millions)
Individually impaired:
Trade receivables
Notes receivable
Others(a)
Collectively impaired:
Trade receivables
Advances to other affiliates
P
=5
180
8
193
P
=5
P
=
(30)
(7)
(37)
P
=10
150
1
161
662
12
674
P
=867
62
62
P
=67
(18)
(18)
(P
=55)
706
12
718
P
=879
2013
Balance at
January 1,
2013
Provisions
(Write-off)/
Balance at
December 31,
2013
(In Millions)
Individually impaired:
Trade receivables
Notes receivable
Others
=2
P
180
16
198
P5
=
(P
=2)
(8)
(10)
=5
P
180
8
193
(Forward)
*SGVFS008665*
- 59 2013
Balance at
January 1,
2013
(Write-off)/
Provisions
Balance at
December 31,
2013
(In Millions)
Collectively impaired:
Trade receivables
=536
P
12
548
=746
P
=155
P
155
=160
P
(P
=29)
(29)
(P
=39)
=662
P
12
674
=867
P
9. Other Current Assets

Other current assets consist of the following:
2013
2014
(In Millions)
AFS financial assets (see Note 10)

Advances to contractors and consultants (a)
Creditable withholding tax (CWT) (b)
Inventories - at cost (c)
Input VAT (see Note 32)
Prepaid expenses (d)
Real estate for sale - at lower of cost or NRV (e)
Miscellaneous deposits and others (f)
Less allowance for decline in value (b)
P
= 302
560
517
453
393
235
135
198
2,793
335
P
= 2,458
=2,042
P
507
504
426
137
223
151
187
4,177
356
=3,821
P
a. Advances to contractors and consultants mainly represent the advance payments for
mobilization of the contractors and consultants for various contracts relating to the tollways
and water operations. 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. Cost of inventories charged to Cost of sales and services account in the consolidated
statements of comprehensive income amounted to P
=2,375.0 million, =
P
=1,839.0 million for the years ended December 31, 2014, 2013 and 2012, respectively
(see Note 23).
d. Prepaid expenses mainly pertains to insurance, premium bond and taxes and licenses.
*SGVFS008665*
- 60 e. This account consists of the following as at December 31, 2014 and 2013:
2013
2014
(In Millions)
Land
Development costs:
Residential resort community and Central
Business District
Condominium units, including parking lots
P
= 50
P
=50
47
38
P
= 135
47
54
=
P151
Certain condominium units and parking slots were carried at NRV, the cost of which
amounted to =
P23.8 million as at December 31, 2014 and 2013. Allowance for impairment loss
amounted to =
P2.3 million as at December 31, 2014 and 2013.
f.
This account mainly consists of advances to suppliers and other miscellaneous deposits.
10. Available-for-Sale Financial Assets

2013
2014
(In Millions)
Shares of stock in:

Listed
Unlisted
UITFs
Investment in bonds and notes
UITFs presented as short term deposits
(see Note 7)
Current portion (see Note 9)
Noncurrent portion
P
=15
511
5,039
1,938
7,503
P
=15
1,282
1,995
1,520
4,812
5,039
302
P
=2,162
2,042
P
=2,770
Less:
The movements in the AFS financial assets are as follows:

2013
2014
(In Millions)
Balance at beginning of year

Additions
Disposal and maturity
Changes in fair value:
Recycled to profit or loss
Unrealized fair value changes
Reclassification (see Note 33)
Impairment
Balance at end of year
P
=4,812
4,351
(1,120)
P
=1,512
4,238
(1,137)
(222)
44
(262)
(100)
P
=7,503
(14)
213
P
=4,812
*SGVFS008665*
- 61 The movements in the fair value changes of AFS financial assets are as follows:
2013
2014
(In Millions)

Change in fair value during the year (see Note 28)
Reclassification to profit and loss (see Note 28)
P
=44
213
(14)
P
=243
P
=243
44
(222)
P
=65
Quoted shares of stock represent investments in golf clubs shares stated at their fair values.
Unlisted shares of stock represent the Companys investment in the entities (all incorporated in the
Philippines) enumerated below. These investments in equity instruments are stated at cost, except
for NEPSCC shares, as there are no reliable sources and bases for subsequent fair value
determination. Management believes that these investments, except Subic Water Sewerage Co.,
Inc. (Subic Water), are not impaired since the investee companies continue to report income and
show stable financial conditions.
Principal Activities
Citra Metro Manila Tollways Corporation
Subic Water (a)
Bonifacio Land Corporation (BLC)
Pacific Global One Aviation Company, Inc.
NE Pacific Shopping Center Corporation
(NEPSCC) (b)
Landco Pacific Corporation (c)
Total
Design, construction and

financing of the Metro Manila
Skyway
Sewerage services
Real estate
Aircraft transportation services
Leasing properties in mall spaces
Real estate
Ownership Interest
2013
2014
(In %)
Amounts
2013
2014
(In Millions)
2.0
10.0
Less than 1%
15.0
15.0
P
=316
111
47
37
P
=316
211
47
37
36.9
19.0
P
=511
459
212
=
P1,282
2.0
10.0
a. Impairment loss of =
P100.2 million was recognized on the Companys investment in Subic
Water.
b. For the year ended December 31, 2014, disposal activity included the sale of all the
Companys investment in shares of NEPSCC. On February 28, 2014, MPIC sold to Cosco
Capital Inc. all of its shares representing 36.89% of the issued and outstanding capital stock of
NEPSCC (see Note 27).
c. In 2014, following the restructuring plan of Landco in preparation for its eventual sale,
management classified its interests in Landco, including the receivables in Landco and ABHC
as assets held for sale (see Note 33).
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. 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. As at December 31, 2014, while the UITF
remains to be classified as AFS financial assets, the entire investment in UITF has been
reclassified to 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).
*SGVFS008665*
- 62 Investment in bonds and notes. As at December 31, 2014 and 2013, 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 Meralcos corporate notes with maturity of up to 2020 and bear fixed interest rate of 4.38%.
Gain on changes in fair value of investment in bonds are recognized in OCI (see Note 28).
Interest earned on and maturity profile of these investments are disclosed in Notes 26 and 35. Fair
values and corresponding principal amounts are disclosed in Note 37.
11. Investments and Advances

The account Investment and advances consist of the following:
2013
2014
(In Millions)
Equity method investees:

Associates
Joint ventures
Investment in Beacon Electrics preferred shares
classified as AFS investments
Advances to Beacon Electric
P
=23,174
29,672
52,846
P
=4,767
31,758
36,525
11,573
756
P
=65,175
11,573
756
P
=48,854
Movements in the Equity method investees:

2013
2014
(In Millions)
Acquisition costs
Additions during the period
Disposal and others
Accumulated equity in net earnings
Share in net earnings
Disposal and others
Dividends
Accumulated share in the investees other
comprehensive income
Share in investees other comprehensive income
(see Note 28)
Less allowance for impairment loss
Additions
Disposal and others
P
=30,569
17,993
48,562
5,905
3,167
(4,954)
4,118
P
=31,196
1,846
(2,473)
30,569
2,311
2,286
1,640
(332)
5,905
725
558
115
840
167
725
674
674
P
=52,846
1,310
164
(800)
674
P
=36,525
*SGVFS008665*
- 63 Equity Method Investees

Investments in Equity Method Investees pertain to the Companys investments in associates and
joint ventures. 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.
The carrying value of material and immaterial investments in associates and joint ventures are as
follows:
2013
2014
(In Millions)
Associates:
Material - Meralco
Immaterial
Joint ventures:
Material - Beacon Electric
Immaterial
P
=13,414
9,760
23,174
P
=
4,767
4,767
29,566
106
29,672
P
=52,846
31,758
31,758
P
=36,525
Individually immaterial investees. The Company has interests in the following individually
immaterial investments in associates and a joint venture:
Place of
Incorporation Principal Activities
Associates:
TMC(a)
Davao Doctors Hospital, Inc. (DDH) (b)
Medical Doctors Inc. (b)
Manila Water Consortium Inc. (MWCI)(c)
FPM Infra (d)
Don Muang Tollway Public Ltd (DMT) (d)
Automated Fare Collection Services, Inc.
(AFCSI) (e)
Prime Media Holdings, Inc. (PMHI) (f)
First Gen Northern Energy Corp. (FGNEC)
Costa De Madera (see Note 3)
Metro Pacific Land Holdings, Inc.
Joint Venture Easytrip Services Corporation (ESC) (g)
Philippines
Philippines
Philippines
Philippines
BVI
Thailand
Ownership Interest in %
2013
2014
46.00
34.85
33.17
39.00
29.45
46.00
34.85
33.28
39.00
25.00
Philippines
Philippines
Philippines
Philippines
Philippines
Tollways
Hospital
Hospital
Investment holding
Investment holding
Tollways
Operator of contactless
payment system
Media holding company
Power generation
Real estate
Real estate
20.00
44.60
33.33
62.00
49.00
44.60
33.33
62.00
49.00
Philippines
Tollways
50.00
a. Pursuant to the Operation and Maintenance Agreement with MNTC, TMC is responsible for
the operation and maintenance of both the North Luzon Expressway Project and Segment 7.
TMC also operates and manages the Subic-Clark-Tarlac Expressway, a 94-km tollroad,
pursuant to its agreement with the Bases Conversion and Development Authority (BCDA)
(see Note 21).
*SGVFS008665*
- 64 b. Included as part of the hospitals transferred to MPHHI (see Note 2). Ownership interests
reflected above as at December 31, 2014 are at MPHHI level. MPICs effective ownership
interest in DDH and MDI are 20.95% and 19.94%, respectively, on a fully diluted basis as at
December 31, 2014.
c. MPWIC, the Companys wholly-owned subsidiary, 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. On
December 13, 2013, CMWD received a Notice of Award for the bulk supply of water to the
Metropolitan Cebu Water District (MCWD). CMWD and MCWD signed a 20-year Water
Purchase Agreement (WPA) for the supply of 18 million liters of water per day for the first
year and 35 million liters per day of water for the second to 20th year. CMWD made its initial
delivery of water in January 2015.
d. On November 15, 2013, MPIC and FPC announced a joint venture to spearhead new
infrastructure investments in emerging Asian economies. FPC held 75% of the venture, FPM
Infra and MPIC held the remaining 25%, through a wholly owned subsidiary, MIHL. FPM
Infras sole asset is a 29.45% interest in DMT, held through AIF (see Note 2).
On July 31, 2014, FPC transferred its 75% shareholding in FPM Infra to MPIC for a
consideration of approximately US$101.25 million (or P
=4.3 billion). As a result of the
transaction, FPM Infra became a wholly-owned subsidiary of MIHL. The transaction was
settled on August 7, 2014 with the acquisition of 4,875 shares of FPM Infra for US$20,769.23
per share. After the acquisition, MPICs effective ownership interest in DMT increased from
7.36% to 29.45%.
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.
e. On January 30, 2014, the AF Consortium received the Notice of Award from the Department
of Transportation and Communications declaring it the winning bidder for P
=1.72 billion
contactless Automated Fare Collection System (AFCS) Project. The AF Consortium is
composed of BPI Card Finance Corporation as lead member, Globe Telecom, Inc., AC
Infrastructure Holdings Corp., Smart Communications, Inc., Meralco Financial Services
Corporation, and MPIC. The contactless payment system will facilitate efficient passenger
transfer to other rail lines, and enhance fare collection efficiency.
Notice of award for the AFCS Project was received on February 23, 2014 and on March 31,
2014, the concession agreement was signed. On February 10, 2014, the AFCSI was
incorporated by the members of the AF Consortium with the Parent Company holding 20% of
the total shares subscribed.
As at December 31, 2014, investment in AFCSI amounted to P
=488.3 million, including
P
=203.2 million of unpaid subscription but net of share in accumulated net loss of
P
=14.9 million. Since AFCSI is still under pre-operating stage, this investee is assessed to be
individually immaterial to the consolidated results of the Company.
*SGVFS008665*
- 65 f.
As at December 31, 2012, investment in PMHI (held through NOHI), has been fully provided
with valuation allowance. In 2013, NOHI converted its P
=119.7 million advances to PMHI
into equity and subscribed to additional PMHI shares for P
=114.6 million with an outstanding
subscription payable of P
=69.8 million. The subscription was funded by a loan from a third
party and the loan was secured by a pledge over the existing shares owned by NOHI excluding
the newly subscribed shares. On the same year, the third party lender sent a notice to NOHI
that it will foreclose on the pledged PMHI shares due to the default in payment of the loan. In
connection with the foreclosure proceedings, the Company took out the cost of the shares
subject to the foreclosure and the related accumulated equity in net loss and allowance for
impairment loss included as disposal and others in the table above. The Companys
investment in PMHI after effecting the foreclosure is at 44.60% with a carrying value of
=
P69.8 million net of impairment loss amounting to P
=164.5 million. The last trade value on
December 29, 2014 registered in the PSE was P
=1.38 per share or an aggregate market value
amounting to =
P433.4 million.
g. On June 30, 2014, MPTDC, Egis Easytrip Services SA (ESSA) and ESC executed a Share
Purchase Agreement covering the acquisition of equity interest equivalent to 50% plus one
share of the capital stock of ESC through a combination of subscription to a total of 87,000
new shares of ESC and purchase of 13,001 shares from Egis Easytrip Services SA (ESSA).
The total consideration is =
P1,030 average price per share or a total of =
P103.0 million.
Subscription payment for new shares was fully paid on June 30, 2014 while the purchase price
for acquired shares from ESSA was paid on July 31, 2014, upon completion of the relevant
conditions precedent.
ESC, a company incorporated in the Philippines, 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.
The following table analyzes, in aggregate, the Companys share in the net income and OCI of
these investees:
2014
Joint Venture
Associate
2013
Associate
(In Millions)
Carrying amount of investment

Share in:
Net income
OCI
P
=106
P
=9,760
597
30
627
P
=4,767
367
(22)
345
The following table summarizes, in aggregate, the assets and liabilities of these investees:
2014
Joint Venture
Associate
2013
Associate
(In Millions)
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
P
=507
41
519
2
P
=3,952
27,469
2,421
11,211
P
=2,976
14,881
5,523
2,090
*SGVFS008665*
- 66 Dividend income from these investees amounted to =

P504.0 million and =
P332.0 million in 2014
and 2013, respectively. Cumulative unrecognized share in net losses of these investees amounted
to =
P412.0 million, P
P411.5 million as at December 31, 2014, 2013 and 2012,
respectively.
Other transactions with these associates are disclosed in Note 21.
Material Associate and Joint Venture. The Companys investments in material associate and joint
venture substantially comprise of MPICs investment in Meralco (held directly by MPIC and
indirectly through its investment in Beacon Electric) and investment in Beacon Electric,
respectively. 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. The Company
has 50% ownership interest in Beacon Electric, a joint venture. Beacon Electric was 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, 2013, Beacon Electric owned 563.12 million Meralco shares, or 49.96% of
the outstanding shares. On June 24, 2014, MPIC entered into a Share Purchase Agreement with
Beacon Electric for the sale of the latters 56.35 million shares, comprising approximately 5%, in
Meralco at a price of =
P235.0 per share for an aggregate consideration of =
P13.24 billion. Thus, the
Companys aggregate effective interest in Meralco after this transaction increased from 24.98% to
27.48%. The transaction was completed through a block sale at the Philippine Stock Exchange on
June 26, 2014.
The consideration payable by MPIC to Beacon Electric was settled as to P
=3.0 billion immediately
and the balance due on or before February 2015. MPIC will receive a dividend from Beacon
Electric at the same time as it settles payments for this transaction such that MPICs net cash
investment in the transaction will be P
=6.6 billion. In accordance with PAS 28, MPIC had not
recognized its share in Beacon Electrics gain from the partial sale of its investment in Meralco.
As at December 31, 2014, MPICs payable to Beacon Electric (included in due to related parties
in the consolidated statement of financial position; see Note 21) related to this transaction
amounted to P
=7.19 billion (net of impact of discounting amounting to =
P55.5 million) after
payment of P
=1.55 billion on transaction date and =
P4.45 billion through offsetting with MPICs
share of dividends on common shares declared by Beacon Electric on June 24, 2014 and
November 17, 2014.
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:
Effective
Ownership
Interest in
Meralco (in %)
As of December 31, 2014
As of December 31, 2013
Indirect*(a)
Direct
Indirect*(b)
Direct
22.48
5.00
24.98
Carrying
Value
(In Millions)
P
=56,410
13,414
62,095
Fair
Value
P
=64,740
14,399
70,644
* Represents MPICs proportionate share in Beacon Electrics investment in Meralco (using equity method and
at fair value),which include MPICs proportionate share in subsumed goodwill at approximately (a) P
=36 billion
and (b) =
P40 billion.
*SGVFS008665*
- 67 Summarized financial information of Meralco and Beacon Electric.

Meralco - Associate
The summarized financial information is based on Meralcos December 31, 2014 consolidated
financial statements:
Consolidated statement of comprehensive income
Revenue
Net income
Dividends received by MPIC from 5% common
shares in Meralco
Statements of financial position
Current assets
Noncurrent assets
Current liabilities
Net assets
Less: Equity attributable to NCI
Net assets attributable to common shareholders of
Meralco
MPICs direct ownership interest in Meralco
MPICs 5% share in net assets of Meralco
Provisional goodwill and purchase price allocation
adjustments
Carrying amount of MPICs direct investment in Meralco
(In Millions)
=266,336
P
26,484
18,131
17,940
113,743
156,170
81,137
109,302
79,474
(320)
79,154
5%
3,958
9,456
=13,414
P
Beacon Electric - Joint Venture

The summarized financial information is based on Beacon Electrics financial statements using the
equity method of accounting for investment in Meralco:
2014
2013
2012
(In Millions)
Consolidated statement of comprehensive income

Equity in net earnings in Meralco
Interest expense
Interest income
Income tax expense
Net income
Dividends received by MPIC from Beacon
Electrics common shares
P
=8,202
(2,373)
205
6,438
6,456
4,450
P8,017
=
(2,459)
29
5,451
5,840
P7,408
=
(2,986)
94
4,452
5,391
2013
2014
(In Millions)
Statements of financial position - Beacon Electric
Current assets
Investment in Meralco
Current liabilities
Net assets
Less: Equity attributable to preferred shareholder
(including dividends in arrears)
Net assets attributable to common shareholders of Beacon Electric
P
=10,774
112,819
4,539
35,004
84,050
=686
P
124,189
1,206
36,533
87,136
25,576
58,474
24,766
62,370
(Forward)
*SGVFS008665*
- 68 2013
2014
(In Millions)
MPICs ownership interest in Beacon Electric
MPICs share in net assets of Beacon Electric
Unification of accounting policies
Nonrecognition of MPICs share on gain on sale of Meralco shares
Purchase price allocation adjustments and others*
Carrying amount of MPICs investment in Beacon Electric
The above amounts of Beacon Electrics assets and liabilities
include the following:
Current financial liabilities**
Non-current financial liabilities**
50%
29,237
431
(246)
144
P
=29,566
50%
31,185
431
142
=31,758
P
P
=3,577
1,260
33,935
=683
P
936
36,492
*Includes equity in net earnings in Meralco prior to the transfer of investment in Meralco to Beacon Electric
**Excluding trade and other payables and provisions
The following facilities entered into by Beacon Electric are secured by a pledge over Meralco
shares held by it and are not guaranteed by the Company. As Beacon Electric is accounted for
using the equity method, these facilities are not included in Companys consolidated debt. Neither
MPIC nor PCEV guarantees Beacon Electrics debt.
Description
Interest Rate
(per annum)
=
P 17,000.0 Million Corporate Notes:
P
=2,285.0 million (Tranche A)
6.00%
P
=14,715.0 million (Tranche B)
5.75% for the first

five years; subject
to repricing on the
5th year
=
P 11,000.0 Million Fixed Corporate Notes
P
=4,000.0 million (1st Tranche)
8.00%
P
=7,000.0 million (2 Tranche)
7.09%
=
P 9,000.0 Million Corporate Notes:
P
=2,950.0 million (Tranche A)
6.00%
nd
P
=6,050.0 million (Tranche B)
5.50% for the first

five years; subject
to repricing on the
5th year
Total
Less unamortized debt issue cost
Less current portion (net of unamortized debt issue cost)
Noncurrent portion
Terms
2014
(In Millions)
Availed of in 2013; 10 years

with semi-annual interest and
principal repayments with
final repayment in March
2023
2013
P
=2,233
=
P2,268
14,384
14,605
Availed of beginning 2011;

10 years payable in semiannual interest and principal
repayments and with final
repayment in May 2021
3,700
3,920
6,475
6,860
Availed of in 2013;
10 years payable with semiannual interest and principal
repayments with final
repayment in
July 2023
2,884
2,928
5,914
6,004
35,590
395
35,195
1,260
P
=33,935
36,585
454
36,131
936
=
P35,195
The proceeds of the =

P 9,000.0 Million Corporate Notes were used to prepay outstanding debt and
partially finance the acquisition of additional Meralco shares purchased in July 2013. The
proceeds of the =
P 17,000.0 Million Corporate Notes Facility were used to partially finance the
prepayment of outstanding debt in March 2013. As at December 31, 2014 and 2013, Beacon
Electric is in compliance with all the requirements stipulated in the loan agreements.
*SGVFS008665*
- 69 On May 27, 2013, Beacon Electric entered into a Forward Starting Interest Rate Swap (Forward
Starting IRS) to hedge the interest repricing risk on the outstanding balance of the Tranche B
(P
=14,715 million) of the =
P17,000.0 Million Corporate Notes Facility by the end of the fifth year.
The Forward Starting IRS will have a receive leg based on a rate which will be determined on
March 26, 2018 and pay leg of 6.98% fixed rate that virtually matches the debts critical terms
(i.e, benchmark rate and fixing date). The hedge is expected to be highly effective and as such
Beacon Electric designates the Forward Starting IRS as a cash flow hedge. The changes in fair
value of the Forward Starting IRS will be deferred in equity under Beacon Electrics Other
Comprehensive Income (Loss) Reserve account. For the periods ended December 31, 2014 and
2013, the Companys share in the Beacon Electrics other comprehensive income and loss from
the Forward Starting IRS amounted to P
=134.6 million (income) and P
=180.6 million (loss),
respectively, recognized as share in the fair value changes in cash flow hedges of equity method
investees in the Companys consolidated statement of comprehensive income (see Note 28).
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%.
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.
As at December 31, 2014 and 2013, Beacon Electric is in compliance with all the requirements
stipulated in the loan agreements.
Investment in Beacon Electrics preferred shares classified as AFS investments
The Company owns 50% of the Beacon Electrics issued preferred shares as at
December 31, 2014 and 2013. The preferred shares of Beacon Electric are non-voting, nonconvertible to common shares or any shares of any class of Beacon, 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% of the issue value subject to (a) availability of unrestricted retained earnings; and
(b) dividend payment restrictions imposed by Beacon Electrics bank creditors. For the years
ended December 31, 2014, 2013 and 2012, the Parent Company received dividends from Beacon
Electrics preferred shares amounting to =
P405.1 million, P
=561.4 million,
respectively (see Note 27). As at December 31, 2014 and 2013, total cumulative dividends on
preferred shares owned by both MPIC and PCEV not yet declared by Beacon Electric amounted to
a total of =
=1,620.3 million, respectively.
Advances to Beacon Electric
Advances to Beacon Electric are non-interest bearing with no fixed repayment terms. The
Company views such advances as part of its long-term investment in Beacon Electric as evidence
by its inclusion in its interest in equity method investees.
*SGVFS008665*
- 70 -
12. Goodwill
The movements in the goodwill account as follows:
2013
2014
(In Millions)

Additions from:
Acquisitions (see Note 4)
Finalization of purchase price allocation*
P
= 18,308
=13,155
P
P
= 18,308
4,973
180
=18,308
P
*PHI acquisition in 2012 with the purchase price allocation finalized in 2013.
The carrying amount of goodwill allocated to each of the CGU (determined to be at the
subsidiary level):
2013
2014
(In Millions)
Water utilities:
MWHC/Maynilad
PHI
Toll operations:
MPTC
CIC (see Note 4)
Healthcare:
CVHMC
AHI
RMCI
DLSMC (see Note 4)
P
= 6,803
288
=6,803
P
288
5,749
4,966
5,749
4,966
234
192
69
7
P
= 18,308
234
192
69
7
=18,308
P
The Company performs its annual impairment test close to year-end, after finalizing the annual
financial budgets and forecasts. The impairment test of goodwill 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 for each of the CGUs, management did not identify
impairment losses for these CGUs. Management also believes that no reasonably possible change
in any of the key assumptions would cause the carrying values of the CGUs to materially exceed
their respective recoverable amounts.
Water utilities and toll operations segments
Volume growth rate (a)

Average forecast period
Discount rate
December 31, 2013

December 31, 2014
CGUs of the water utilities segment
Maynilad
PHI
Maynilad
PHI
3.0%
3.0%
3.0%
2.0%
24 years
22 years
23 years
21 years
8.6%
9.2%
8.7%
8.7%
*SGVFS008665*
- 71 -
Average growth (a, b)

Average forecast period
Discount rate
(a)
(b)
December 31, 2013

December 31, 2014
CGUs of the toll operations segment
MPTC
CIC
MPTC
CIC
1.6%
3.0% up to 2033
1.6% 3.4% up to 2033
and 4.9%
and 5.3%
afterwards
afterwards
24 years
20 and 32 years
23 years
19 and 31 years
7.3%
7.3%
8.1%
8.1%
Average growth represents average of year-over-year growth during the entire concession period.
Traffic volume for the Open system and Journey for the Closed system.
The forecasted period for Maynilad and PHI is greater than five (5) years as management can
reliably estimate the cash flow for the entire duration of Maynilads and PHIs concession period.
The average forecast period is consistent with the period covered by the concession agreements
(see Note 13).
MPTCs cash flows reflect cash flows from the NLEX and CICs from the CAVITEX. The
forecasted period is greater than five (5) years as management can reliably estimate the cash flow
for the entire duration of these CGUs concession periods. The average forecast period is
consistent with the period covered by the concession agreements (see Note 13).
Healthcare segment
Average occupancy rate

Discount rate
RMCI
83.0%
12.4%
December 31, 2014

CVHMC
AHI
73.0%
56.0%
12.4%
12.4%
DLSMC
60.0%
12.4%
RMCI
87.0%
11.2%
December 31, 2013

CVHMC
AHI
77.0%
56.0%
11.2%
11.2%
Average forecast period for purposes of goodwill impairment testing for DLSMC, RMCI and AHI
is at 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 of its agreement with RCAM (see Note 33). Goodwill acquired from the
Companys acquisition of DLSMC in 2013 is based on provisional values (see Note 4) and
therefore the amount of goodwill has yet to be allocated to specific CGUs. Impairment testing
commenced in 2014 after finalization of the purchase price allocation.
13. Service Concession Assets

The movements in the service concession assets follow:
Toll Operations
2014
Water Utilities
Total
(In Millions)
Cost:
Additions
Accumulated amortization:
Additions (see Note 23)
P
=29,071
2,507
31,578
P
=80,713
4,171
84,884
P
=109,784
6,678
116,462
3,369
688
4,057
P
=27,521
11,875
2,270
14,145
P
=70,739
15,244
2,958
18,202
P
=98,260
*SGVFS008665*
- 72 -
Toll Operations
2013
Water Utilities
Total
(In Millions)
Cost:
From business combinations
(see Note 4)
Additions and reclassifications
Accumulated amortization:
Additions and reclassifications
(see Note 23)
=19,046
P
=75,243
P
=94,289
P
9,614
411
29,071
101
5,369
80,713
9,715
5,780
109,784
2,561
9,858
12,419
808
3,369
=25,702
P
2,017
11,875
=68,838
P
2,825
15,244
=94,540
P
Service Concession Assets Toll Operations. This represents MNTCs and CICs concession
comprising 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.
MNTC. In August 1995, First Philippine Infrastructure Development Corporation (FPIDC),

the then parent company of MNTC, entered into a joint venture agreement with 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 MNTC, 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 the Toll
Regulatory Board (TRB) as the grantor, PNCC as the franchisee and MNTC as the
concessionaire executed a Supplemental Toll Operation Agreement (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 MNTC as approved by the
President of the Philippines and granted MNTC 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. Pursuant to the STOA, MNTC is required to pay franchise fees to PNCC
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, MNTC 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.
*SGVFS008665*
- 73 The Manila-North Expressway Project consists of three phases as follows:

Phase
Phase I
(Segments 1, 2, 3and 7)
Phase II
(Segments 8.1, 8.2, 9 and 10)
Expansion and
rehabilitation
i.
ii.
Construction
i.
ii.
Phase III
(Segments 4, 5 and 6)
Construction
Description
84 kilometers (km) of the existing NLEX
8.8-km stretch of a Greenfield
expressway
17-km circumferential road C-5 which
connects the current C-5 expressway to
the NLEX
5.85-km road from McArthur to Letre
i. 57-km Subic arm of the NLEX to Subic

Expressway
Status / Date of
Operation
February 5, 2005
Segment 8.1 June

5, 2010
Segments 9 and 10
Ongoing
construction
Segment 8.2 Pre
construction
Not started
CIC. CIC is exclusively responsible for the design, financing and construction of the
CAVITEX, pursuant to a toll operation agreement 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.
Under the amended Joint Venture Agreement with PRA, each of the following expressways
shall be constructed in segments:
Phase
Phase I
Phase II
Status / Date of
Operation
Description
Design and
improvement
Design and
construction
i. 6.5 km R-1 Expressway which

connects the Airport Road to
Zapote
May 1998
ii. Extension of the 7 km R-1

Expressway which connects the
existing R-1 Expressway at
Zapote to Noveleta
i. Extension of the C-5 Link
Expressway which connects the
R-1 Expressway to the South
Luzon Expressway (SLEX)
May 2011
Not started
Additions in 2013 and 2014 to the service concession asset included civil works construction on
MNTCs Segments 9 and 10 and CAVITEXs Modified Zapote Interchange and fixed operating
equipment design, supply and installation for the toll collection system migration. Additions also
include pre-construction costs of Segment 8.2 of Phase II of the NLEX.
*SGVFS008665*
- 74 On June 14, 2013, MNTC entered into an agreement with Egis Projects, Phils. and Indra Philippines,
Inc. for the front end and design works for the toll collection system migration with a total contract
price of 6.2 million or P
=365.3 million. Of the total project cost, P
=144.3 million was capitalized in
2013 and =
P194.7 million was capitalized in 2014.
Borrowing costs capitalized amounted to P
=11.4 million in 2014 and 2013,
respectively.
In 2013, additions also included the service concession asset through acquisition of CIC.
Service Concession Assets Water Utilities. This represents the exclusive right granted to Maynilad
and PHI to provide water distribution and sewerage services and charge users for these services
during the concession period.
Maynilad. 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. 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 (a) an annual standard rate adjustment to compensate for
increases in the consumer price index 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 to enable Maynilad to
efficiently and prudently recover expenditures incurred, Philippine business taxes and
payments corresponding to debt service on concession fees and Maynilad loans incurred to
finance such expenditure. In accordance with the concession agreement, Maynilad posted a
performance bond in the amount of US$80.0 million to secure the performance of its
obligations under certain provisions of its concession agreement (see 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.
Additions to the service concession assets for the water utilities substantially relate to cost of
rehabilitation, additional constructions and to the additional concession fees (see Note 18)
pertaining to the drawn portion of the MWSS loans relating to new projects. To date, Maynilad
had capitalized =
P3.44 billion on wastewater projects, of which P
=465.8 million was capitalized in
2014.
*SGVFS008665*
- 75 -
14. Property and Equipment and Property Use Rights

Property and Equipment. This account consists of:
Cost
Land and land improvements
Office and other equipment, furniture
and fixtures
Library books
Accumulated Depreciation
Leasehold and land improvements
Office and other equipment, furniture and
fixtures
Library books
Allowance for impairment loss

Construction-in-progress
December 31,
2013
Purchase
Price
Allocation
=
P1,152
197
3,630
P
=
P
=
39
71
1,020
412
2,689
19
9,119
144
118
722
1
1,095
50
434
30
230
P
=
138
64
518
1
981
113
413
P
=525
559
298
1,158
12
2,511
6,608
(23)
274
=
P6,859
December 31,
2012
Cost
Land and land improvements
Office and other equipment, furniture
and fixtures
Library books
Accumulated Depreciation
Leasehold and land improvements
Office and other equipment, furniture and
fixtures
Library books
Allowance for impairment loss

Construction-in-progress
Purchase
Price
Allocation*
(Note 4)
Disposals/
Additions Reclassifications
(In Millions)
December 31,
2014
P
=
7
289
P
=1,152
243
3,990
(17)
(60)
(51)
168
1,147
470
3,360
20
10,382
(17)
(44)
(62)
(123)
292
(309)
(P
=16)
Disposals/
Additions Reclassifications
(In Millions)
80
664
680
318
1,614
13
3,369
7,013
(23)
378
P
=7,368
December 31,
2013
=
P1,044
165
3,272
P
=140
88
P
=62
32
41
(P
=94)
229
=
P1,152
197
3,630
786
335
2,146
17
7,765
29
8
146
411
221
115
401
2
874
(16)
(46)
(4)
69
1,020
412
2,689
19
9,119
27
241
23
193
411
7
P
=418
91
122
435
3
867
7
469
P
=476
494
211
752
9
1,734
6,031
(23)
41
=
P6,049
(26)
(35)
(29)
(90)
159
(243)
(P
=84)
50
434
559
298
1,158
12
2,511
6,608
(23)
274
=
P6,859
*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).
*SGVFS008665*
- 76 Property Use Rights. This account consists of:
Cost
Land use rights
Building use rights
Accumulated Amortization
Land use rights
Building use rights
Cost
Land use rights
Building use rights
Land use rights
Building use rights
December 31,
2013
Adjustment
from
Completion of
Purchase Price
Allocation
=
P208
540
748
P
=
P
=
P
=208
540
748
26
73
99
=
P649
P
=
12
29
41
(P
=41)
38
102
140
P
=608
December 31,
2012
Adjustment
from
Completion of
Purchase Price
Allocation
=
P208
540
748
=
P
=
P
=
P208
540
748
15
44
59
=
P689
=
P
11
29
40
(P
=40)
26
73
99
=
P649
Amortizations
(In Millions)
Amortizations
(In Millions)
December 31,
2014
December 31,
2013
The Company entered into lease agreements for the operation and management of hospitals,
OLLH and CSMC (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 of twenty (20) years.
15. Other Noncurrent Assets

2013
2014
(In Millions)
Deferred tax assets (see Note 29)

Deferred project costs (see Note 33) (a)
Indemnification asset (see Notes 4 and 20)
Deposits (b)
Deposits for LTIP (see Note 25) (c)
Long-term cash and miscellaneous deposits (d)
Sinking fund (e)
Basketball franchise (f)
P
=1,164
1,869
548
474
345
157
139
100
P
=1,218
533
462
131
187
126
(Forward)
*SGVFS008665*
- 77 2013
2014
(In Millions)
(g)
Software costs
Pension asset (see Note 25)
Derivative asset (see Notes 8, 33 and 36)
Others (h)
P
=67
22
325
P
=5,210
P
=73
24
32
271
P
=3,057
a. Deferred project costs substantially comprise of costs directly attributable to the acquisition of
the service concession relating to the =
P65-billion Light Rail Transit Line 1 Cavite Extension
and Operations & Maintenance Project incurred prior to Effective Date (see Note 33). The
Effective Date is expected to be the date of the handover to LRMC of the operation and
maintenance of the existing system of the LRT. Upon handover of the existing system, the
accumulated deferred project costs shall be reclassified to service concession asset. As at
December 31, 2014, the deferred project costs substantially consist of =
P105.0 million of
transaction advisory fee paid to Development Bank of the Philippines and International
Finance Corporation and P
=935.0 million as 10% of the bid amount of P
=9.35 billion paid to
Department of Transportation and Communication and Light Rail Transit Authority
(see Note 33). Accumulated deferred project costs for the LRT project amounted to
P
=1.11 billion as of December 31, 2014.
b. Deposits substantially relate to the various agreements entered into with Fil-Estate
Corporation and its affiliated companies, and with Anglo Philippines Holdings Corporation
and DBH Incorporated. The agreements relate to the options to acquire certain rights and
interests in the MRT 3 companies consisting of Metro Rail Transit Holdings, Inc. (MRTH),
Metro Rail Transit Holdings II, Inc. (MRTH-II), Metro Rail Transit Corporation (MRTC) and
Monumento Rail Transit Corporation (MNRTC) subject to the condition that the necessary
consents and waivers from relevant parties are obtained. Should the acquisition push through,
these deposits will form part of the acquisition price. Otherwise, these will be forfeited and
charged to expense.
c. This account consists of funding for the Long-term Incentive Plan (LTIP) which is expected to
be paid in 2016 following the LTIP program 3-year performance cycle ending in 2015. The
LTIP fund is covered by an Investment Management Agreement with a Trustee Bank
(see Note 25).
d. Included in this account are long-term cash investments representing time deposits with
maturities of more than one year and earn interest at the respective long-term cash deposit
rates, and miscellaneous deposits comprising of rental deposits and deposits for restoration
works.
e. This pertains to CICs sinking fund established to finance the future major road repairs, repavements 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, 2014, no
impairment has been recognized.
*SGVFS008665*
- 78 g. Software cost represents costs of the Companys developed and implemented accounting and
reporting system with estimated useful life of five years. Cost amounted to P
=134.3 million and
P
=113.4 million as at December 31 2014 and 2013, respectively. Accumulated depreciation
amounted to =
P67.1 million and =
P40.1 million as at December 31 2014 and 2013, respectively.
Amortization expense amounted to =
P27.0 million, P
=40.0 million, and =
P30.0 million for the
years ended December 31, 2014, 2013, and 2012, respectively.
h. This account includes advances to contractors and consultants.
16. Accounts Payable and Other Current Liabilities

2013
2014
(In Millions)
Trade and accounts payable (a)

Accrued construction costs (see Note 21) (b)
Accrued personnel costs
Accrued expenses (c)
Interest and other financing charges (see Note 19)
Accrued outside services
Dividends payable (see Notes 6 and 22)
LTIP payable (see Note 25)
Retention payable (d)
Withholding taxes payable
Payable to CHI (e)
Output taxes payable
Unearned revenue and other deposits
Lease payable - current portion (see Note 20)
Accrued PNCC fees (see Note 33)
Pretermination fees and transaction cost
Others
P
=4,313
2,680
1,051
944
721
564
299
228
260
212
163
154
86
49
48
277
P
=12,049
P
=4,496
4,655
1,034
662
620
421
425
46
218
169
163
138
96
55
42
30
206
P
=13,476
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, 2014 and 2013 (see Note 34). Trade and accounts payables
are non-interest bearing and are normally settled on 30 to 60 day terms.
b. This represents unbilled construction costs from contractors and normally settled upon receipt
of billings (see Note 21).
c. This account includes accrued professional fees, utilities and repairs and maintenance charges.
This account also included accruals in relation to the cases pending before the courts or quasijudical bodies. Detailed disclosure of which are not provided as allowed under PAS 37, as
this may prejudice the Companys positions in relation to these cases.
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.
*SGVFS008665*
- 79 e. Payable to CHI as at December 31, 2013 relates to noninterest-bearing advances obtained by

CIC in 2012 for its debt service requirements. Although payable within the year, the amount
is yet to be settled as at December 31, 2014.
17. Provisions
The table below present the movements in this account:
Warranties
and Guarantees (a)
(see Note 32)
Balance at January 1, 2013
Additions from business combination
(see Note 4)
Additions* and accretion
Payments
Balance at December 31, 2013
Additions* and accretion
Reversal
Payments
Balance at December 31, 2014
At December 31, 2013:
Current portion
Noncurrent portion
At December 31, 2014:
Current portion
Noncurrent portion
* See Note 23.
Heavy
Other
Maintenance (b)
Provisions (c)
(In Millions)
Total
=
P489
=
P336
=3,097
P
=3,922
P
489
P
=489
228
196
(327)
433
263
(123)
(301)
P
=272
6
1,046
(82)
4,067
1,141
(34)
(162)
P
=5,012
234
1,242
(409)
4,989
1,404
(157)
(463)
P
=5,773
=
P489
=
P121
312
=4,067
P
=4,677
P
312
489
69
203
4,987
25
5,545
228
a. This includes certain warranties and guarantees extended by NOHI in relation to debt for asset
swap arrangements entered in prior years. Certain warranties and guarantees are secured by
Pacific Plaza Tower (PPT) condominium units and BLC shares with carrying values of
P
=18.9 million and P
=46.5 million, respectively (see Notes 9 and 10).
b. This pertains to the contractual obligations of MNTC 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. In 2014, CIC reversed excess provision for heavy maintenance as result of an
updated study conducted by an independent engineer. Portion of the reversal amounting to
P
=4.9 million was deducted against the sinking fund while the remaining P
=118.2 million was
recorded as reversal of provisions and included in Other income account in the consolidated
statement of comprehensive income.
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.
*SGVFS008665*
- 80 -
18. Service Concession Fees Payable

2013
2014
(In Millions)

P
=7,771
500
P
=7,271
P
=8,512
603
P
=7,909
Concession fees relate to and arise from Maynilads service concession agreement (see Note 13)
and 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.
The schedule of undiscounted estimated future concession fee payments, based on the extended
life of Maynilads concession agreement as of December 31, 2014, is as follows:
Year
In Original Currency
Foreign
Peso Loans/
Currency Loans
Project Local
(Translated to US$)*
Support
Total Peso
Equivalent*
(In Millions)
2015
2016
2017
2018
2019-2037
$15.6
16.5
14.2
14.2
73.0
$133.5
P803.5
=
529.7
518.9
537.0
10,218.2
=12,607.3
P
P1,500.8
=
1,266.1
1,155.2
1,172.2
13,484.6
=18,578.9
P
* Translated using the December 31, 2014 exchange rate of =

P 44.72:US$1.
Concession fee payments relating to the extension of the concession agreement (see Note 13) are
only determinable upon loan drawdown of MWSS and their actual construction of the related
concession projects. Accretion expense for the years ended December 31, 2014, 2013 and 2012
amounted to =
P644.0 million, P
=644.0 million, respectively (see Note 26).
19. Note Payable and Long-term Debt

Note Payable. On December 27, 2012, the Company availed a short-term unsecured note in the
amount of =
P4.7 billion from a local bank, the proceeds of which were invested in MPTC for the
latters capital requirements. The note bears fixed interest of 4.5% per annum, payable in 90 days
or on March 27, 2013. On the date of scheduled payment, the Company fully settled the
outstanding balance of the short-term payable including the related interest.
Long-term Debt. This account consists of:
2013
2014
(In Millions)
Current portions
Noncurrent portions
P
=3,573
57,494
P
=61,067
P
=3,512
47,536
P
=51,048
*SGVFS008665*
- 81 Details of the long-term debt per company as follows:

Loans
MWHC and subsidiaries
MPTC and subsidiaries
MPIC
AIF
AHI
Others
P
=24,277
26,864
6,383
2,721
846
303
61,394
327
P
=61,067
December 31, 2013

Convertible
Preferred
Long-term
Shares
Bonds
(In Millions)
Loans
Total
(In Millions)
P
=
6,957
6,957
70
P
=6,887
P
=24,277
19,907
6,383
2,721
846
303
54,437
257
P
=54,180
MWHC and subsidiaries

MPTC and subsidiaries
MPIC
AHI
Others
December 31, 2014

Long-term
Bonds
=25,424
P
17,869
6,448
1,121
387
51,249
207
=51,042
P
=
P
6
6
=6
P
Total
=
P
=
P
=25,424
P
17,869
6,448
1,121
393
51,255
207
=51,048
P
The table below presents the movements in unamortized debt issue costs:
2013
2014
(In Millions)

Amortization during the year charged to interest
expense (see Note 26)
Debt issue costs incurred during the year (see Note 26)
Amortization during the year charged to other expenses
(see Note 27)
P
= 207
(42)
162
P
= 327
=
P151
(46)
543
(441)
=
P207
The repayments of loans based on existing terms are scheduled as follows:

2013
2014
(In Millions and
undiscounted)
2015
2016
2017 and onwards
P
=3,558
3,642
53,950
P
=61,150
(In Millions and

undiscounted)
2014
2015
2016 and onwards
P
=3,496
3,189
44,253
P
=50,938
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.
*SGVFS008665*
- 82 MWHC and Subsidiaries

Long-term debt consists of:
Description
Interest Rate
(per annum)
=
P 21.2 Billion Term Loan Facility
5.75% p.a. for the first 5

years, subject to
repricing on 5th year
Availed of in March 2013, payable

in semi-annual installment within
10 years with final repayment in
March 2023; contains negative
pledge
P
=18,614
2013
(In Millions)
=
P20,306
=
P 5.0 Billion loan with BDO
5.75% p.a. for the first 5

years, subject to
Availed of in April 2013, payable

in semi-annual installments within
10 years; contains negative pledge
5,000
5,000
US$137.50 million loan with Land Bank of Same rate of interest

the Philippines (LBP)
payable by LBP under
the World Bank Loan
Agreement + 1.25% per
annum
Interest and principal payable in

semi-annual installments within 25
years, inclusive of seven years
grace period, contains negative
pledge
663
89
Various peso-denominated loan of PHI
Payable in quarterly installments

over seven years from 2007 and
2009
29
24,277
75
1,692
P
=22,510
25,424
82
1,703
=
P23,639
Less unamortized debt issue costs

Less current portion of long-term debt
Noncurrent portion of long-term debt
Various
Terms
2014
On March 22, 2013, Maynilad entered into a Concessionaire Lenders Agreement for a
=
P 21.2 billion Term Loan Facility which was used to refinance certain outstanding debt. The
interest rate floor on the P
=21.2 Billion Term Loan Facility is an embedded derivative that was
assessed by Maynilad as not for bifurcation based on the provisions of PAS 39. The Term Loan
contains a negative pledge.
The World Bank (WB), through the Metro Manila Wastewater Management Project (MWMP),
provided a US$275 million loan to the Land Bank of the Philippines (LBP) for relending to
Maynilad and Manila Water Company, Inc., the concessionaire for the east service area. The loan
was divided equally to 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, 2013, Maynilad had drawn US$2.0 million from the facility and in 2014, Maynilad
made additional drawdown amounting to US$12.8 million.
Covenants. Maynilads loan agreements contain, among others, covenants regarding the
maintenance of certain financial ratios such as debt-to-equity ratio not to exceed 2.6 times and
debt service coverage ratio not to exceed 1.3 times, and maintenance of debt service account
(see Note 7). As at December 31, 2014 and 2013, Maynilad has complied with these covenants.
Significant covenants for the PHIs loan included maintenance of certain financial ratios and the
prohibition against declaration or payment of dividends to PHIs stockholders (other than
dividends payable solely in shares of its capital stock) if payment of any sum due to the lenders is
in arrears or if it would negatively affect PHIs financial condition. As at December 31, 2014 and
2013, PHI has complied with these covenants.
*SGVFS008665*
- 83 PHIs loans are secured by the assigned guarantee coverage of PHI at 85% of the customers
monthly billing obligation but not to exceed =
P75.0 million and P
=150.0 million for the loans
obtained in 2009 and 2007, respectively. In addition to this guarantee, the loan obtained in 2007 is
secured by certain property and equipment while the loan obtained in 2009 is secured by a
continuing surety made by PHIs former shareholder. The loan obtained in 2007 has been fully
paid in April 2013 while the loan obtained in 2009 was preterminated in 2014.
MPTC and Subsidiaries
Loans consist of:
Description
Interest Rate
(per annum)
Terms
2013
2014
(In Millions)
=
P 7.0 Billion Fixed-rate Bonds due 2021
and 2024
Bond issued in 2014 with 7-year

5.5% and 5.07% for the
10-year and 7-year bonds, fixed rate bonds amounting to
=4.4 billion due in 2021 and 10P
respectively
year fixed rate bonds amounting
to P
=2.6 billion due in 2024;
contains negative pledge
Term Loan Facility Agreement with BDO
5.8% p.a. for the first

5 years, subject to
P
=6,957
P
=
P3.25 billion drawn on various

=
dates in 2014; principal and
interest payable semi-annually
within 10 years based on the
amortization schedule
3,201
=
P 6.2 Billion Series A Notes (unsecured)
Weighted average fixed

Availed of in April 2011 and
interest rate of 7.22% p.a. have tenors of 5 years,
7 years and 10 years, subject to
bullet like repayment
6,024
6,086
=
P 2.1 Billion loan with Philippine
National Bank (PNB) (unsecured)
6-month PDST-F +
0.50% margin
Availed of in March 2009

payable within 7 years, balloon
type semiannual payment starting
June 15, 2011, 85% payable on
the last 4 semiannual periods
893
1,785
=
P 1.0 Billion Term Loan Facility with
the Insular Life Assurance
Company Ltd. (Insular) and the
Philippine American Life and
General Insurance Company
(Philam) (unsecured)
Average fixed interest

rate of 7.10% p.a.
Availed of in December 2011.

Final maturity date of 15 years
with two bullet repayment
tranches of P
=500.0 million each
after 10 and 15 years
1,000
1,000
=
P 1.0 Billion Term Loan Facility with
Philam (unsecured)
Fixed interest rate of

5.80% p.a.
Availed of in December 2013,

payable in lump sum after
15 years
1,000
1,000
=
P 800.0 million Term Loan Facility
with Sun Life of Canada
(Philippines), Inc. (unsecured)

5.30% p.a.
Availed of in October 2013,

10 years
800
800
=
P 200.0 million Term Loan Facility
with Insular (unsecured)

5.03% p.a.
Availed of in November 2013,

10 years
200
200
Series 2010-1 Dollar-denominated Notes
Fixed rate of 12.0%
792
854
=
P 6.1 Billion Loan with BDO-RCBC
6.50% subject to
repricing on the fifth year
Principal payments payable

quarterly, commencing March
2013 with final payment in
September 2022
Availed of in 2013, payable
quarterly within 10 years starting
January 13, 2014 to December
26, 2023
P
=5,997
=
P6,144
26,864
189
1,220
P
=25,455
17,869
125
1,158
=
P16,586
Less unamortized debt issue costs

*SGVFS008665*
- 84 An interest rate swap (IRS) transaction was entered into to convert the floating rate =
P 2.1 billion
loan with PNB into a fixed rate loan effective March 14, 2011. The interest rate swap effectively
fixed the floating rate of the said loan over the remaining tenor at 5.9% per annum. However, on
December 28, 2012, MNTC issued a notice for early termination of the IRS transaction covering
the period December 15, 2012 up to December 15, 2015. The early termination fee was
recognized as interest expense amounting to =
P175.0 million in the 2012 consolidated statement of
comprehensive income.
The proceeds from the =
P 7.0 Billion Fixed-rate Bonds due 2021 and 2024 issued by MNTC shall
be used primarily to partially fund the 5.65 km Segment 10 of the Manila-North Expressway
Project which will connect the MacArthur Highway in Valenzuela City to C-3 Road in Caloocan
City.
On January 9, 2014, MPTDC entered into Term Loan Facility Agreement with BDO for up to
P
=3,250 million loan due 2024 for the purpose of financing its acquisition of approximately 8.5%
of the total issued and outstanding capital stock of MNTC from EGIS Projects SA (Egis) and for
other corporate purposes.
Proceeds from the =
P6.2 Billion Series A Notes were used for the partial and full prepayment of
certain outstanding debt of MNTC.
The Series 2010-1 Dollar-denominated Notes and =
P6.1 Billion Loan with BDO-RCBC resulted
from the consolidation of CIC effective January 2013 (see Note 4). On December 26, 2013, CIC
availed a =
P6.1 Billion Loan with BDO-RCBC, the proceeds of which was used primarily to
refinance CICs existing loan (which included the long-term debt assumed upon by the
Companys acquisition of CIC) and other obligations, repayment of the advances owed to MPTC,
refinancing certain short-term loan obligations of the borrower to BDO and for general working
capital requirements of the borrower. The refinancing did not qualify as extinguishment of debt
and as such, the additional transaction costs were capitalized and a new effective interest rate was
computed. The prepayment option and interest rate floor were assessed to be clearly and closely
related to the host loan, thus not bifurcated. The Series 2010-1 Dollar-denominated Notes, which
was issued by CIC through a consolidated structured entity, stipulates certain Repurchase
Events which would require CIC to repurchase certain concession collections and contract rights
under CICs concession agreement, for a repurchase price. Repurchase Events included, among
others, failure to make payments due under the transaction documents, attachment of CICs assets
having a value in excess of US$5.0 million, and abandonment, or other than during the
continuance of an event that constitutes force majeure under CICs Toll Operation Agreement.
The Series 2010-1 Dollar-denominated Notes is secured by future toll collections from
CAVITEX; pledge over transaction accounts and 40,000 preferred shares of CIC held by CHI.
CIC provided collateral security in connection with the =
P6.1 Billion loan with BDO-RCBC, 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 =
P0.2 million and assignment
of a reserve account amounting to =
P433.3 million. 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.
Covenants. The bonds and the loans contain, among others, covenants regarding the maintenance
of certain financial ratios such and maintenance of reserve account. As at December 31, 2014 and
2013, MPTDC, MNTC and CIC are in compliance with their respective debt covenants.
*SGVFS008665*
- 85 MPIC
As at December 31, 2014 and 2013, MPICs outstanding loan comprise of =
P6.48 Billion Fixed
Rate Note with BDO. The loan, which is due in 2023, is payable in ten years; with semiannual
interest and principal payments. The note bears an interest per annum of 7.5%, fixed for the first
five (5) years and subject to repricing on the fifth year. Proceeds from the =
P6.48 Billion Fixed
Rate Note was used to repay then outstanding debt.
MPIC also has available committed short-term credit facility of up to =
P7.0 billion with various
financial institutions.
Covenants. The =
P 6.48 Billion Fixed Rate Note 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 at a minimum of 1.3 times. The
Notes contain a negative pledge on all existing and future assets of MPIC and 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. As at
December 31, 2014 and 2013, MPIC is in compliance with its debt covenants.
AIF
On August 1, 2014, AIF Toll Road Holdings (Thailand) Limited (AIF), a 100% owned subsidiary
of FPM Infra, entered into Term Loan Facility Agreement with Thanachart, a bank incorporated
under the laws of Thailand, of up to Baht 2,100 million (or approximately US$65 million) loan for
the purpose of reorganizing AIFs capital structure. AIF availed of the full amount of the facility
on August 6, 2014. Interest is to be paid monthly while the principal is to be paid semi-annually
in 15 instalments with the final instalment due November 2021. The loan is subject to a floating
interest rate of Minimum Lending Rate minus 1.50% per annum, and 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
shares owned by FPM Tollway (Thailand) Limited and substantially all the DMT shares owned by
AIF. The carrying value of the investment in DMT amounted to =
P5,929.0 million as at
December 31, 2014.
Covenants. All dividend proceeds in respect of the investment in DMT shall be applied to repay
this loan (see Note 11). The loan agreement also contains, among others, covenants regarding the
maintenance of certain financial ratios such as debt-to-equity ratio and debt service coverage ratio,
maintenance of ownership in DMT of at least 29.45%, and maintenance of debt service reserve
account. AIF is in compliance with its debt covenants.
AHI
Loans consist of:
Description
Interest Rate
Terms
=
P 1.26 billion loan with International
Finance Corporation (IFC)
8.5% p.a. on first

drawdown; 8.1% p.a. on
second drawdown
Availed of on February 8, 2008

and payable in 16 unequal
semiannual principal beginning
May 15, 2010
=
P 595.0 million loan with Deutsche
Investitions-und Entwicklungsgeselleschaft
mbH (DEG)
9.1% p.a. on first

drawdown; 8.6% p.a. on
second drawdown

and payable in 16 unequal
semiannual principal beginning
March 15, 2010
258
347
US$1.0 million IFC Subordinated Loan

LIBOR plus Income
participation amount from and payable on
April 30, 2017
1% to 2% of EBITDA
45
44
846
272
P
=574
1,121
276
P
=845

2013
2014
(In Millions)
P
=730
P
=543
*SGVFS008665*
- 86 AHIs property and equipment with a carrying value of =

=3,398 million as at
December 31, 2014 and 2013, respectively, are pledged as collaterals for its long-term loan
(see Note 14).
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: (i) 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; (ii) incurring
expenditures or commitments for acquisitions of fixed or other noncurrent assets except for
expansion projects or necessary repairs and maintenance; (iii) entering into financial leases
exceeding US$500,000 of annual lease payments; (iv) entering into guarantees and derivative
transactions; and (v) creating lien on AHIs property, revenue and other assets.
As at December 31, 2014 and 2013, AHIs current ratio is below the minimum and is therefore
prohibited from declaring dividends. However, after obtaining the approval from IFC and DEG,
AHI was able to declare dividends in 2014 and 2013. As long as AHI was not able to meet the
requirements set out in the loan agreement, AHI needs to obtain the approval from IFC and DEG
prior to any dividend declaration.
Others
Consist of:
Description
CVHMC
Loans with local bank (unsecured)
RMCI and a subsidiary

Various loans with local banks
EMHMC
P
=100 million loan with local bank
(unsecured)
Others
Interest Rate
Terms
2013
2014
(In Millions)
Fixed rates ranging from

4.0% to 5.5% p.a.
P150 million availed of in 2012

=
and fully paid in 2013;
=200 million availed of in 2013
P
and to be fully paid in 2014
P
=65
P
=125
2% p.a. + PDST-F rate

for the loan with P
=300
million principal;
prevailing market rates
for the remaining loans
Availed of in various dates from

2008 to 2013, and all payable
quarterly
148
162
5.50% p.a.
Availed of in 2012 payable

monthly from March 19, 2012 to
March 14, 2013
90
92
303
180
P
=123
14
393
310
P
=83
RMCIs loans are secured by continuing suretyship of some of the stockholders of RMCI and real
mortgage constituted over various parcel of land and improvements of RMCI and RCI with
aggregate carrying amount of P
=348.1 million, as at December 31, 2014 and 2013 (see Note 14).
The loan agreements provide for certain restrictions with respect to, among others, incurrence of
any other loans, advances or other obligations. These restrictions were complied with by RMCI in
2014 and 2013.
*SGVFS008665*
- 87 -
20. Other Long-term Liabilities

2013
2014
(In Millions)
Contingent liabilities arising from business

combinations (see Notes 4 and 32) (a)
Lease payable (see Notes 3, 16 and 33) (b)
Customers guaranty deposits (c)
LTIP payable (see Note 25)
Accrued interest payable to MWSS (d)
Deferred credits (e)
Accrued retirement liability (see Note 25)
Payable to CHI (f)
Subscription payable (see Note 11)
Interest payable (g)
Financial guarantee obligation (see Note 21)
Others
P
=1,172
1,013
804
622
607
602
440
257
203
143
156
P
=6,019
P
=1,142
1,020
783
409
607
478
333
257
65
58
P
=5,152
a. 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 (see Note 4). The increase in the
contingent liability from December 31, 2013 to 2014 is attributable to accretion charge
resulting from the passage of time (see Note 26). An indemnification asset (included in
Other noncurrent assets) was recognized in relation to such probable claim (see Note 15).
b. Lease payable represents present value of future minimum lease payments relating to the lease
agreements entered into by EMHMC and CVHMC, which lease agreements qualify as
business combinations. The lease payable was initially determined at acquisition date and
subsequently adjusted for payments and accretion (see Notes 3 and 33). Current portion of the
lease payable is included in the Accounts payable and other current liabilities (see Note 16).
Total lease payable has nominal value of P
P2,522.0 million as at
December 31, 2014 and 2013, respectively.
c. Customers guaranty deposits serve to guarantee payment of bills by customers. These
deposits are non-interest 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).
d. 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 P
=985.3 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. The reduction of P
=378.1 million in accrued interest payable and the
related contingent liability of P
=686.6 million was released to Other income (see Note 27) in
the 2012 consolidated statement of comprehensive income.
*SGVFS008665*
- 88 e. Deferred credits represent the net effect of unrealized foreign exchange gain or loss on service
concession payable to MWSS, and restatement of foreign currency-denominated interest
bearing loans and related interest. Deferred credits are calculated as the difference between
the drawdown or rebased rate versus the closing rate. In 2013, Maynilad realized foreign
exchange gain amounting to =
P1.0 billion arising from the refinancing of dollar-denominated
Corporate Notes which resulted in a significant FCDA refund to the customers. This foreign
exchange gain was fully refunded as at June 30, 2014.
f.
On October 20, 2011, CIC and CHI executed a Memorandum of Agreement (MOA), wherein,
CHI shall grant CIC a right-of-way to certain segments of the property CHI plans to reclaim to
allow CIC to construct four feeder roads. The four feeder roads are estimated to cost
=
P520 million where CHI shall be liable for approximately fifty (50%) percent of construction
costs. Actual contribution of CHI amounting to =
P256.7 million was received by CIC in 2012.
As at December 31, 2014, the construction of the feeder roads has not yet started.
g. Interest payable represents present value of the interest due on the Exchangeable Bond
(see Note 22).
21. Related Party Transactions

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 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.
Transactions with Related Parties
Transactions with related parties, whether or not conducted under normal terms and conditions
similar to those with unrelated parties, are disclosed below. See tabular presentation for the
recorded transactions with with these related parties.
Transactions with TMC. The Operation & Maintenance (O&M) of the NLEX and
Segment 7 is undertaken by TMC pursuant to the O&M Agreement between MNTC and
TMC. This agreement was signed on July 6, 2001 and shall be effective for the entire
concession period.
TMC oversees the day-to-day operations of the NLEX, including securing toll collection,
depositing of funds to MNTC's 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. The base fee is a fixed annual amount, payable in twelve (12) monthly
installments and is escalated on a quarterly basis. The variable fee is the amount assessed and
paid by MNTC to TMC for the cost of performing its services over and above the agreed base
traffic volume assumption. TMCs services have been expanded to include the O&M of the
NLEX Mindanao Avenue link as well as the Balagtas Interchange and the Bocaue Northbound
Exit.
*SGVFS008665*
- 89 On January 22, 2014, MNTC and TMC agreed on the following base fees effective
January 1, 2012: P
=1,470.1 million for the Phase 1 of the NLEX, =
P94.3 million for Segment 7;
P
=7.8 million for Dau Interchange; and =
P36.9 million for Segment 8.1. All compensations
payable to TMC shall be escalated in accordance with the O&M Agreement with a new Base
Date of January 1, 2012.
On August 22, 2014, MNTC and TMC entered into another O&M side letter to amend the
Base Fee in view of the VAT inclusion in the revised O&M Base Fee, which should be VAT
exclusive, effective January 9, 2012.
Under the corporate guarantee agreement, TMC was required to pay annual guarantee fee to
MPTDC equivalent to 2.5% of the gross value of the corporate guarantee issued by MPTDC.
The guarantee was issued in favor of MNTC for the liability of TMC under the O&M. The
guarantee income is included as Construction revenue and other income in the consolidated
statement of comprehensive income (see Note 27). Interest also accrues to the receivable
from TMC and the related financial guarantee obligation. In connection with the corporate
guarantee arrangement, MPTDC recognized a receivable from TMC equivalent to the
financial guarantee obligation calculated as the present value of the guaranteed portion of the
liability of TMC under the O&M. The receivable on financial guarantee obligation (included
as Due from related parties in the consolidated statement of financial position) and the
financial guarantee obligation amounted to nil and =
P64.8 million as at December 31, 2014 and
2013. The corporate guarantee agreement was terminated effective January 1, 2014.
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 February 26, 2015.
See tabular presentation for the recorded transactions with TMC relating to operators fee,
guarantee fee, interest income on receivable on financial guarantee obligation, management
fee and the outstanding balances of amounts due from TMC.
Transaction with MWCI. As disclosed in Note 8, MPWIC extended a loan to MWCI in

relation to the project with CMWD.
Transaction with Landco. Refer to Notes 8, 10 and 33 for the details of the transaction with
Landco.
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:
Northern Fiesta Campaign, a joint sponsorship agreement among MNTC, SMART and
PLDT, which is a collaborative tourism promotion of local fiestas and festivals in the
North and of safety and traffic discipline along NLEX through print media and through
banners and traffic control gates stickers in the NLEX toll plazas.
*SGVFS008665*
- 90
Utilities Facilities Contract, between MNTC and SMART whereby MNTC provides
SMART an access for the construction, operation and maintenance of a cellsite inside the
NLEX right of way for an annual fee of P
=0.3 million which shall then be escalated
annually at 4.5% 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 which may be renewed
or extended upon mutual agreement by MNTC and SMART.
Agreement for the naming rights of the SMART Connect Interchange, where MNTC
grants SMART the exclusive rights to name the NLEX-Mindanao 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
P
=228.2 million and may increase depending on the final features and characteristics of the
cloverleaf.
Utilities Facilities Contract between MNTC and PLDT for the Fiber Optic Overlay along
Phase I and Phase II Segment 8.1 of the NLEX. PLDT pays an annual fee presented as
Others under Contruction costs and other expenses.
Advertising arrangements between MNTC and Digitel related to various advertising

mediums which include rental, material production, installation and maintenance at
several locations along NLEX covering the period up to November 2013. Income from
this arrangement is presented in Note 27 as other income.
MNTCs plan asset invested in unsecured notes issued by PLDT and SMART. MNTCs
plan asset included unsecured Fixed Rate Corporate Notes (FXCNs) of PLDT amounting
to =
P2.4 million as at December 31, 2012. The PLDT FXCNs were disposed of in 2013.
As at December 31, 2014 and 2013, MNTCs plan assets included unquoted and
unsecured term loans of SMART amounting to P
=0.9 million. The SMART term loans are
due in 2022 and earns interest at 6.26% per annum.
Other transactions with PLDT include various administrative assistance extended to the
Company and rentals from lease of office space.
Transactions with DM Consunji Inc. Maynilad, entered into certain construction contracts
with D.M. Consunji, Inc. (Consunji), a subsidiary company of DMCI (a non-controlling
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.
On April 13, 2012, CVHMC entered into a Memorandum of Agreement (MOA) with Meralco
for the operation and management of the Meralco Corporate Wellness Center (Wellness
Center), an outpatient diagnostic and consultation center for its employees and their
dependents. In accord of the contract, CVHMC agreed to take steps to improve healthcare
services, expand diagnostic services, enhance customer services levels, increase operational
efficiencies, rationalize equipment upgrade and renovate and improve infrastructure. Income
recognized for this arrangement in 2014 and 2013 amounted to P
=42.7 million and
P
=41.1 million included as part of hospital revenue in the consolidated statements of
comprehensive income. The total revenue comprises of retainers fee, pharmacy handling and
manpower and administrative reimbursement plus margin.
*SGVFS008665*
- 91
Transactions with Beacon Electric. Refer to Note 11 for other related parties transactions
with respect to MPICs acquisition of Meralco shares from Beacon Electric and investment in
Beacon Electric. Due to Beacon Electric as at December 31, 2014 pertains to the outstanding
amount for the purchase price of Meralco shares acquired in June 2014 (see Note 11).
Transactions with ESC. On December 5, 2007, MNTC engaged the services of ESC to assist
MNTC in increasing the usage of the electronic toll collection (ETC) facility along the NLEX
which ended on April 30, 2010. On November 24, 2010, MNTC and ESC signed the
Supplemental Agreement to the Service Agreement extending the services of ESC as ETC
service provider for another eight years effective on May 1, 2010 with a five year extension.
In accordance with the Supplemental Agreement, MNTC will pay ESC an annual fixed fee of
=
P14.0 million for Class 1 vehicles and annual fixed fee of =
P5.0 million for Class 2 and 3
vehicles, which are to be maintained and escalated every year for labor index and consumer
price index (CPI). MNTC shall also pay for variable fees of P
=0.75 and P
=2.5 per transaction
for Class 1 vehicles depending on the number of transactions achieved during the year
compared with prior year; and =
P3.0 and P
=4.0 per transactions for Class 2 and 3, respectively,
which are also to be maintained and escalated every year for labor index and CPI.
Pursuant to the Service Agreement, amounts due to MNTC arising from the use of Easytrip
tags in the NLEX shall be remitted by ESC to the designated MNTC 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 MNTC to the designated ESC
bank accounts within seven (7) days immediately following the date of reloading.
Other transactions. Other transactions with related parties Metro Pacific Investments
Foundation, Inc. (MPIFI), Ideaspace Foundation, Inc. (Ideaspace; Philippines largest
privately-funded 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 advances.
*SGVFS008665*
- 92 The following table provides the total amount of transactions with related parties for the years ended December 31, 2014, 2013 and 2012 (amounts in millions):
Name
Associates and Joint Venture:
TMC
Management
Income
(see Note 27)
Guarantee
Income
Income
Interest
from
Income Utility Facilities
(see Note 26)
(see Note 27)
Dividend
Income Income from
from Preferred shares
Advertising
(see Notes 11
(see Note 27)
and 27)
Construction
Cost
(see Note 27)
Operators
Fee
(see Note 23)
Utilities
(see Notes 23
and 24)
Rentals
(see Notes 23
and 24)
Outside
services
(P
=1,711)
(1,532)
(1,493)
P
=
P
=
P
=
Provision for
Impairment
(see Notes 27
and 32)
2014
2013
2012
P
=56
56
60
P
=
24
23
P
=
11
11
P
=
P
=
P
=
P
=
2014
2013
2012
2014
2013
2012
405
405
561
Meralco
2014
2013
2012
ESC
2014
54
MWCI
2013
2014
2013
2012
58
59
38
(33)
(33)
(23)
PLDT
2014
2013
2012
2
2
2
(46)
(41)
(50)
(15)
(11)
(11)
Digitel
2014
2013
2012
11
8
1
DM Consunji, Inc.
2014
2013
2012
2014
2013
2012
P
=56
56
60
P
=
24
23
P
=
15
11
P
=2
2
2
P
=70
67
39
P
=405
405
561
PMHI
Beacon Electric
Other related parties:

SMART
Total
(583)
(504)
(1,100)
(P
=583)
(504)
(1,100)
(P
=1,711)
(1,532)
(1,493)
(P
=54)
(1,006)
(974)
(948)
(P
=1,085)
(1,048)
(1,021)
(P
=15)
(11)
(11)
P
=
(164)
(9)
P
=
(164)
(9)
*SGVFS008665*
- 93 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). Except for the noncurrent portion of the amount due from TMC, trade receivable, accounts payable and due to/from related parties are due and demandable, noninterest bearing, unsecured and requires cash settlement.
The noncurrent portion of the amount due from TMC is due more than 1 year, unsecured, interest-bearing at 12% per annum and requires cash settlement. Terms and
conditions of the notes receivable from Landco are provided in Note 8.
Company
Associates and Joint Venture
TMC - current
TMC - noncurrent
Meralco
Beacon
MWCI
ESC
Other related parties:
Digitel
DM Consunji Inc.
FPC
FPCL
Ideaspace
Landco
LLC
MPIF
PLDT
Smart
Others
Less allowance for impairment
Total
Accounts Receivable
(see Note 8)
2013
2014
Notes Receivable
(see Note 8)
2014
2013

2013
2014
Accounts payable and other current

liabilities (see Note 16)
2013
2014

2013
2014
P
=
15
404
P
=
12
P
=
P
=
101
P
=106
P
=107
65
2
5
P
=436
21
44
P
=337
26
P
=
7,188
P
=
1
53
4
477
477
477
P
=
1
9
31
31
31
P
=
P
=
620
721
721
266
P
=455
2
44
7
1
2
171
31
140
140
P
=
88
44
7
1
6
325
31
294
229
P
=65
7
1
509
509
509
P
=
15
72
4
7,279
7,279
7,279
P
=
1
1
15
72
4
93
93
93
P
=
1
1
365
365
365
P
=
*SGVFS008665*
- 94 Directors Remuneration
Annual remuneration of the directors amounted to P
=3.8 million, P
=7.0 million and =
P8.2 million in
2014, 2013 and 2012, respectively.
Non-executive directors are entitled to a per diem allowance of =
P50 thousand for each attendance
in the Parent Companys BOD 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, 2014, 2013 and 2012 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:
2013
2014
2012
(In Millions)
Short-term employee benefits

Share-based payment (see Note 31)
Post employment benefits - Retirement costs
Other long-term benefits:
LTIP expense (see Note 25)
Others
P
=867
64
54
=749
P
18
47
=746
P
12
45
440
5
P
=1,430
411
8
=1,233
P
165
4
=972
P
22. Equity
Details of authorized and issued capital stock are in the following tables:
Common shares
Authorized Capital Stock (ACS):

Registration Date
Activity
March 20, 2006
Incorporation
June 5, 2006
Increase in ACS
As at December 31, 2007 and 2006
August 12, 2008
Increase in ACS
As at December 31, 2008
February 13, 2009
Increase in ACS
December 21, 2009 Increase in ACS
As at December 31, 2010 and 2009
May 31, 2011
Increase in ACS
As at December 31, 2014, 2013 and 2012
No. of Shares
Par
Value/
Issue
Price per
share
100,000
4,599,900,000
4,600,000,000
7,350,000,000
11,950,000,000
8,050,000,000
2,688,518,336
22,688,518,336
5,811,481,664
28,500,000,000
P
=1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
Preferred Shares Class A

Par
Value/
Issue
Price per
No. of Shares
share
5,000,000,000
5,000,000,000
5,000,000,000
5,000,000,000
P
=0.01
0.01
0.01
0.01
Preferred Shares Class B
No. of Shares
Price per
share
1,500,000,000
1,500,000,000
1,500,000,000
P
=1.0
1.0
1.0
(Forward)
*SGVFS008665*
- 95 Common shares
Issued and Outstanding:

Date
Activity
September 6, 2006
Original subscription of MPICs
majority shareholders
October 23, 2006
Issuance of shares to NOHI
majority owners in exchange
for MPIC shares
November 8, 2006
Tendered shares of NOHI
minority shareholders in
exchange for MPIC shares
December 31, 2007 Tendered shares of NOHI
minority shareholders in
exchange for MPIC shares
June 30, 2008
Additional subscription of
MPICs majority
shareholders
June 30, 2008
Conversion of loan from
MPHI to equity
February 13, 2009
Issuance on existing
subscriptions from MPHI
July 9, 2009
Issuance on existing
subscriptions from LAWL
Pte. Ltd (LAWL)
July 29, 2009
Conversion of advances from
MPHI to equity
October 2, 2009
Issuance in exchange for
Meralco shares
September 19, 2009 Additional subscriptions of
MPHI
December 21, 2009 Conversion of advances/loan
from MPHI to equity
Various
Exercise of stock option plan
Various
May 31, 2011
Conversion of advances/loan
from MPHI to equity
Additional subscriptions of
July 13, 2011
MPHI
Various
Various
January 22, 2013
Additional subscriptions of
MPHI
Various
Various
*Weighted average exercise price.
Preferred Shares Class A

Par
Value/
Issue
Price per
No. of Shares
share
No. of Shares
Par
Value/
Issue
Price per
share
968,820,495
P
=1.00
181,290,038
1.00
48,841,989
1,198,952,522
Preferred Shares Class B
No. of Shares
Price per
share
P
=
P
=
1.00
143,966,271
1,342,918,793
1.00
3,791,525,175
2.00
1,893,282,845
7,027,726,813
1.00
2,389,040,000
2.00
791,110,491
2.60
5,000,000,000
0.01
4,464,202,634
3.20
4,770,000,000
3.00
672,129,584
13,945,000
20,128,154,522
32,310,000
20,160,464,522
3.00
2.41*
5,000,000,000
5,000,000,000
2,030,769,230
3.25
2,400,000,000
2,060,000
24,593,293,752
20,530,000
24,613,823,752
3.60
2.73*
5,000,000,000
5,000,000,000
1,330,000,000
82,150,000
26,025,973,752
20,297,000
26,046,270,752
4.60
2.73*
5,000,000,000
5,000,000,000
2.12*
2.41*
2.88*
Authorized Capital Stock

On May 31, 2011, the SEC approved the increase in the authorized capital stock of the Company
from =
P24.2 billion to P
=30.05 billion, divided into 28.5 billion common shares, 5.0 billion Class A
Preferred Shares and 1.5 billion Class B Preferred Shares with a par value of =
P1.0 per share.
Common Shares
The increase in common shares for the years ended 2014, 2013 and 2012 resulted from the
following transactions:
At various dates in 2014, 2013 and 2012, a total of 20.30 million, 82.15 million and 20.53
million, common shares, respectively, were issued in connection with the Parent Company
stock option plan (see Note 31).
*SGVFS008665*
- 96
On January 22, 2013, MPIC raised P

=6.12 billion in an overnight placement of 1.33 billion in
new MPIC shares worth P
=4.60 per share. The shares came from the shareholdings of MPHI.
As a result of this transaction, MPHIs interest in MPIC was reduced to 55.8% from 59.0%
shareholding prior to this transaction.
In February 2015, MPIC raised P

=8.9 billion in an overnight placement of 1,812,000,000 common
shares (see Note 39).
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.
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 2014, 2013 and 2012.
Record of Registration of Securities with the SEC
In accordance with SRC Rule 68, as Amended (2011), Annex 68-D, below is a summary of the
Companys track record of registration of securities:
Issue
Tender offer to shareholders of Metro
Pacific Corporation (MPC)
covering common shares and
subscription warrants relating to
common shares of MPIC with
par value of =
P1.0 per share
Offer price
Four (4) MPC shares for
one (1) MPIC share plus
three (3) warrants
Date of SEC approval

October 25, 2006
Number of registered shares

securities
Common shares of
56,878,766*
Subscription warrants of
170,636,298
Number of holders of
securities as of
December 31,
2014
2013
1,334
1,358
*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 of December 31, 2007 and 2,549,211
warrants expired on December 15, 2007.
*SGVFS008665*
- 97 Retained Earnings and Cash Dividends

Of the Companys consolidated retained earnings, =
=8,773.5 million is
available for dividend declaration as at December 31, 2014 and 2013, 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. Stand-alone 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.
Dividends paid and declared and proposed are as follows:
2014
2013
2012
(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
=0.022, P
=0.02
and P
=0.015 per share in 2014, 2013
and 2012, respectively)
Class A preferred shareholders
Interim dividend declared and paid during the
interim period
=0.026,
=0.015 and P
P
=0.012 per share in
2014, 2013 and 2012, respectively)
Special one off dividend:
Common shareholders
(P
=0.04 per share in 2014)
Proposed final dividend:
=0.037,
=0.022 and =
P
P0.02 per share in 2014,
2013 and 2012, respectively)
P
=572.6
=519.9
P
=368.9
P
2.5
2.5
1.8
677.1
3.7
390.3
2.5
295.2
2.5
1,041.1
P
=2,297.0
=915.2
P
=668.4
P
P
=1,030.8
=572.6
P
=519.9
P
1.3
P
=1,032.1
2.5
=575.1
P
2.5
=522.4
P
Proposed 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 year-end.
On February 26, 2015, the BOD approved the declaration of the cash dividends of =
P0.037 per
common share in favor of the Parent Companys shareholders of record as at March 25, 2015 with
payment date of April 17, 2015. On the same date, the BOD approved the declaration of cash
dividends amounting to P
=1.25 million in favor of the preferred shareholders.
*SGVFS008665*
- 98 Equity Reserves
2014
2013
2012
(In Millions)
Effect of MPIC acquisition of NOHI shares (a)

Equity transactions(b):
Disposal or dilution of equity interest in a
subsidiary(b.1)
Acquisition of NCI(b.2)
Other reserve from ESOP(c) (see Note 31)
P
=690
7,809
(2,377)
123
P
=6,245
=690
P
1,842
31
80
=2,643
P
=690
P
(122)
31
108
=707
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.
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 P
=10,400 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. MCNK is 90.0% owned by Marubeni Corporation, a
company incorporated in Japan and 10% owned by MAPL Holdings B.V., a company
incorporated in Netherlands.
ii.
On July 2, 2014, GIC, through Arran Investment Private Limited, invested

P
=3.7 billion for a 14.4% stake in 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, 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 noncontrolling interest of =
P3.5 billion.
b.2 Acquisition of NCI. In 2014, MPTDC increased its ownership in MNTC (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.
*SGVFS008665*
- 99 Other Comprehensive Income Reserve

Other comprehensive income reserve consists of the following, net of applicable income taxes:
Share in the OCI of equity method investees
Fair value changes on AFS financial assets
Fair value changes on cash flow hedges
Actuarial losses
Cumulative translation adjustment
Revaluation reserve and others
2014
P
=840
35
(1)
(8)
(30)
P
=836
2013
P725
=
210
(5)
(3)
=927
P
2012
P558
=
25
(11)
(52)
(33)
=487
P
Refer to Note 28 for the movements and analysis of the other comprehensive income.
23. Costs of Sales and Services

2014
2013
2012
(In Millions)
Amortization of service concession assets

(see Note 13)
Cost of inventories* (see Note 9)
Personnel cost (see Note 25)
Operators fees (see Note 21)
Utilities (see Note 21)
Repairs and maintenance
Contracted services
PNCC fees (see Note 33)
(see Notes 14 and 15)
Provision for heavy maintenance
(see Note 17)
Rentals (see Note 21)
Insurance
Toll collection and medical services
Others
P
= 2,958
2,375
2,366
1,877
1,120
617
448
443
=2,818
P
2,033
2,025
1,707
1,037
592
417
418
=3,073
P
1,839
1,671
1,493
977
539
548
400
312
288
265
225
140
65
16
120
P
= 13,082
167
123
51
18
151
=11,845
P
107
144
43
20
49
=11,168
P
*Includes cost of medical services, materials and supplies.
*SGVFS008665*
- 100 -
24. General and Administrative Expenses

2014
2013
2012
(In Millions)
Personnel costs (see Note 25)

Outside services
Taxes and licenses
Professional fees
Transportation and travel
Advertising and promotion
Utilities (see Note 21)
Repairs and maintenance
Administrative supplies
Collection charges
Entertainment, amusement and
representation
Provision for corporate initiatives and other
provisions
Insurance
Rentals (see Note 21)
Provision for doubtful accounts (see Note 8)
Public relation
Commissions
Miscellaneous
P
= 2,532
=2,397
P
=2,152
P
737
645
503
459
268
181
171
164
129
122
659
639
338
392
248
106
149
127
102
109
507
648
307
163
208
130
108
120
112
101
144
109
99
84
81
67
60
25
395
P
= 6,823
159
85
62
160
78
15
292
=6,261
P
121
80
49
158
60
121
231
=5,384
P
2013
2012
25. Personnel Costs and Employee Benefits

2014
(In Millions)
Salaries and wages

LTIP expense (see Notes 16 and 20)
Retirement costs (gain)
Provision for ESOP (see Note 31)
Severance cost
Other employee benefits
P
=3,162
440
(64)
64
524
772
P
=4,898
P
=3,022
411
198
18
773
P
=4,422
P
=2,701
165
181
13
763
P
=3,823
Cost of sales and services (see Note 23)

(see Note 24)
P
=2,366
P
=2,025
P
=1,671
2,532
P
=4,898
2,397
P
=4,422
2,152
P
=3,823
*SGVFS008665*
- 101 Long-Term Incentive Plan (LTIP)

Certain of the Companys employees are eligible for long-term 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 (e.g., 2013 to 2015 and 2010 to 2012 for MPICs LTIP
and 2012 to 2014 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
is approved by the respective boards of directors of the entities of the Company.
As at December 31, 2014, 2013 and 2012, the accrued LTIP is as follows:
2014
2013
2012
(In Millions)

Current service cost
Interest
Actuarial loss (gain)
Payment
P
=455
433
9
(1)
(46)
P
=850
P
=446
407
2
2
(402)
P
=455
P
=281
159
6
P
=446
Current (see Note 16)

Noncurrent (see Note 20)
P
=228
622
P
=850
P
=46
409
P
=455
P
=407
39
P
=446
On October 7, 2011 and December 18, 2013, MPIC entered into an Investment Management
Agreement (IMA) with a Trustee Bank to fund the 2010-2012 and 2013-2015 LTIP programs,
respectively. 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 10 banks in the Philippines. As at December 31, 2014 and 2013, the balance of the LTIP
fund for the 2013-2015 LTIP program amounted to =
P344.9 million and P
=131.0 million,
respectively, and presented as Deposits for LTIP under Other noncurrent assets in the
consolidated financial statements (see Note 15).
Pension
Regulatory Environment. R.A. 7641 requires a minimum benefit of equivalent to one-half
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. As at December 31, 2014, the retirement benefits of
employees of MPIC, MPTC, MPTDC and CVHMC are provided through 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.
*SGVFS008665*
- 102 Contributions to the retirement plan are made based on the employees monthly basic salary which
is at 10.0%. Additionally, an employee has an option to make a personal contribution to the fund,
at an amount not exceeding 40.0% of his monthly salary. 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, MPIC, MPTC and MPTDC 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 and as discussed in Note 2, MPIC, MPTC and MPTDC
account for the retirement obligation under the higher of defined benefit obligation relating to the
minimum guarantee and the obligation arising from the defined contribution plan. Disclosures
required for a defined benefit retirement plan apply to MPIC, MPTC and MPTDCs 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.
Maynilad, MNTC, RMCI, CLDH and AHI have funded noncontributory defined benefit
retirement plan covering all their eligible regular employees. The retirement benefit plans of AHI,
RMCI, Maynilad and MNTC are funded and managed as follows:
RMCIs retirement fund is being monitored by its Treasury Officer under the supervision of
the RMCIs Chief Financial Officer.
The plan assets of AHI, Maynilad and MNTC 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.
As at December 31, 2014, CIC, EMHMC and DLSMC 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.
*SGVFS008665*
- 103 Retirement Costs. The following tables summarize the components of the retirement costs under
the defined benefit plans and the defined contribution plans included in Personnel costs under
Cost of services and General and administrative expenses account in the consolidated
statement of comprehensive income.
2014
2013
2012
(In Millions)
Current service cost

Net interest cost
Past service cost
Curtailment gain
Retirement costs for the year
P
= 173
20
(257)
(P
= 64)
=
P180
17
1
=
P198
=
P164
17
=
P181
Actual return on plan assets
P
= 91
P
=77
=
P158
In line with its strategic goal to improve operational efficiency, Maynilad offered a Special
Opportunity Program (SOP), a redundancy and right-sizing program in 2014. This program
offered a separation package based on the number of years, or fractions thereof, on a pro-rated
basis, of service with Maynilad plus monetary equivalent of some benefits. 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. The
reduction in the number of employees resulted in a curtailment gain of =
P257.3 million.
Pension Assets and Accrued Retirement Costs. Reconciliation of net liability/(asset) recognized in
the consolidated statement of financial position as at December 31 follows:
2014
2013
2012
(In Millions)
Present value of defined benefit

obligation (PVDBO)
Fair value of plan assets (FVPA)
Net liability
Pension asset(a)
Accrued retirement liability (b)
Net liability
P
= 1,589
1,171
P
= 418
(P
= 22)
440
P
= 418
=1,589
P
1,280
=
P309
=1,452
P
1,174
=
P278
(P
=24)
333
=
P309
(P
=49)
327
=
P278
2013
2012
(a)
Included under Other noncurrent asset account (see Note 15).

Included under Deferred credits and other long-term liabilities (see Note 20).
(b)
Changes in PVDBO are as follows:

2014
(In Millions)
PVDBO at beginning of the year

PVDBO from acquired
subsidiaries
Interest cost
Current service costs
Past service cost
P
=1,589
P
=1,452
P
=1,175
73
173
48
86
180
1
43
78
164
(Forward)
*SGVFS008665*
- 104 2014
2013
2012
(In Millions)
Benefits paid from:

Plan asset
Company funds
Curtailment
Actuarial losses (gains) due to:
Changes in financial
assumptions
Changes in demographics
Experience adjustments
PVDBO at end of the year
(P
= 7)
(20)
(257)
(P
=30)
(19)
(P
=26)
(13)
48
(5)
(5)
P
=1,589
(119)
(13)
3
P
=1,589
25
(16)
22
P
=1,452
2013
2012
Changes in FVPA are as follows:

2014
(In Millions)
FVPA at beginning of the year

FVPA from acquired subsidiaries
Interest income included in net
interest cost
Benefits paid
Contributions by employer
Remeasurement in OCI from return
on plan asset excluding amount
included in net interest cost
FVPA at end of the year
P
= 1,280
53
(270)
72
36
P
= 1,171
=1,174
P
6
=
P939
6
69
(30)
53
8
=1,280
P
61
(26)
97
97
=1,174
P
Maynilad, CIC, EMHMC, AHI, CVHMC and DLSMC are not expecting any contribution to their
respective retirement plan assets for 2015. MPIC, MPTC, MNTC, RMCI and CLDH expect to
make a total of =
P74.7 million of expected contribution to their respective retirement fund in 2015.
The major categories of the plan assets are the following:
2013
2014
(In Millions)
Philippine bonds and treasury notes

Philippine equity securities
Cash in bank
Unit trust funds
Philippine life insurance plans
Receivables and other assets
P
= 567
271
162
87
21
63
P
= 1,171
=
P577
316
221
74
17
75
=1,280
P
The plan assets carrying amount approximates its fair value since these are short-term in nature or
marked-to-market. Plan assets consist of the following:
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 2.3% to 9.4% (2014) and 3.5%
to 9.4% (2013) and have varying maturities of up to 2037 as at December 31, 2014 and 2013.
*SGVFS008665*
- 105
Philippine equity securities. This substantially pertains to investment in shares of various

entities (not related parties of the Company) which stocks are traded in the PSE.
Unit trust funds. Include mutual funds invested in quoted shares.
Receivables and others assets. Include a seven year certificate of deposit with interest of
5.25% and certain unsecured fixed-rate notes of a related party and unsecured notes of an
unaffiliated company with interests ranging from 6.3% to 6.7%.
While the Company does not perform any Asset-Liability 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, 2014 and 2013 in
determining retirement obligations are shown below:
2013
2014
(In Percentage)
Annual discount rate

Future range of annual salary increases
4.09 to 5.19
3.00 to 10.00
3.78 to 6.38
3.00 to 10.00
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.
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
2014
2013
(In Millions)
Annual discount rate

Future range of annual salary increases
+ 1.0%
- 1.0%
+ 1.0%
- 1.0%
(P
= 125)
149
140
(120)
(P
=124)
148
142
(120)
*SGVFS008665*
- 106 The following table provides for the maturity analysis of the undiscounted benefit payments as at
December 31:
2013
2014
(In Millions)
Less than one year

More than one year to five years
More than five to ten years
Beyond ten years
Total expected benefit payments
P
= 155
481
1,035
6,264
P
= 7,935
=
P136
676
1,201
5,602
=7,615
P
The average duration of the defined benefit obligation is 20 years as at December 31, 2014 and
2013.
26. Interest Income and Interest Expense

The following are the sources of the Companys interest income:
2014
2013
2012
(In Millions)
Cash and cash equivalents, short-term deposits

and restricted cash (see Note 7)
Notes receivable (see Note 8)
Investments in bonds and treasury notes
(see Note 10)
Accretion on noncurrent financial assets
Receivable on financial guarantee (see Note 21)
Others
P
=253
67
=
P295
96
=
P505
100
50
15
P
=385
39
20
11
1
=462
P
35
11
1
=652
P
2013
2012
The following are the sources of the Companys interest expense:

2014
(In Millions)
Notes payable and long-term debt (see Note 19)

Accretion on service concession
fees payable (see Note 18)
Accretion on financial liabilities (see Note 20)
Amortization of debt issue costs (see Note 19)
Financial guarantee obligation (see Note 21)
Others
P
=3,267
=3,093
P
=2,793
P
644
215
42
30
103
P
=4,301
659
140
46
11
52
=4,001
P
644
10
93
11
128
=3,679
P
*SGVFS008665*
- 107 -
27. Construction revenue and other income and Construction costs and other expenses
2014
2013
2012
(In Millions)
Construction revenue and other income:

Construction revenue (see Notes 3 and 13)
Dividend income (see Notes 10 and 11)
Gain on sale of investment (see Note 10)
Reversal of provision for heavy maintenance
(see Note 17)
Management fees (see Note 21)
Income from advertising (see Note 21)
Rental income
Deferred credits and foreign exchange
gains - net
Income from toll service and utility facilities
(see Note 21)
Reversal of provisions and accruals
Reversal of provisions for doubtful accounts
Guarantee fees (see Note 21)
Gain on bargain purchase (see Note 4)
Reversal of contingent liabilities (a)
Reversal of accrued interest payable to
MWSS (a)
Others (b)
Construction costs and other expenses:
Construction costs (see Notes 3 and 13)
Refinancing costs (see Notes 16 and 19)
Other provisions (see Note 32)
FCDA (see Note 20)
Adjustment to amortized cost due to change
in expected cash flows (c)
Mark-to-market loss on derivatives
(see Note 36)
Others (d)
P
=6,670
471
222
=5,557
P
405
=6,731
P
561
118
103
95
94
153
64
95
82
45
82
44
763
886
24
20
23
63
196
24
22
19
99
23
687
630
P
=8,491
748
=8,113
P
378
522
=10,115
P
P
=6,501
1,049
110
=5,432
P
814
845
174
=6,608
P
331
785
960
374
227
P
=7,887
294
=7,559
P
45
136
=9,239
P
a. As discussed in Note 3, in light of the Maynilads current negotiation and outstanding offer of
US$14.0 million to fully settle the claim of MWSS, Maynilad reversed P
=378.1 million of
accrued interest and the Company derecognized the recorded contingent liability amounting to
=
P686.6 million resulting from the application of the accounting for business combinations when
the Company acquired control of Maynilad.
b. Others under Construction revenue and other income included gains on sale of investments,
property and equipment, and real estate inventory, reversal of provision for decline in value of an
asset, adjustment on projected to actual payments, gain on remeasurements of existing
investments, other recoveries and incidental income.
c. Relates to portion of the unamortized debt issue cost that was expensed as a result of change in
expected cash flow arising from refinancing of various long term debt.
d. Others under Construction costs and other expenses consists of provision for decline in value
of an asset, loss on remeasurements of previously held interest, loss on sale and conveyance of
certain assets and other incidental expenses.
*SGVFS008665*
- 108 -
28. Other Comprehensive Income

Other comprehensive income recognized in the consolidated statements of comprehensive income
consists of the following:
2014
Other comprehensive income 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
Exchange differences on
translation of foreign
operations
Exchange differences on
translation of foreign
operations
Fair value changes of cash flow
hedges
Change in fair value of AFS
financial assets
(see Note 10)
Income tax
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)
Re-measurement gains (losses) on
defined benefit plans
(see Note 25)
Revaluation increment
Income tax
2013
(In Millions)
2012
P
=135
(P
=181)
=
P
32
(21)
(23)
11
11
(178)
2
(24)
199
(22)
(14)
17
(7)
21
(52)
369
469
137
(94)
(14)
398
=384
P
68
94
(50)
581
=602
P
(1)
1
(52)
(P
=76)
29. Income Tax

a. The Companys deferred tax components as at December 31 are as follows:
2013
2014
(In Millions)
Provisions
Accrued retirement cost and other accrued expenses
NOLCO
Lease payable
P
= 281
547
165
117
=
P619
156
203
113
(Forward)
*SGVFS008665*
- 109 2013
2014
(In Millions)
Debt issue cost

MCIT
Unamortized past service cost
Excess of fair values over book values
Timing difference in depreciation method
Equity transaction (see Note 22)
Unamortized foreign exchange losses capitalized as
service concession assets
Improvement of facilities
Others
Net deferred tax assets/(liabilities)
P
= 51
32
42
(3,114)
(681)
(483)
P
=42
20
12
(3,140)
(555)
(20)
(3)
2
(P
= 3,064)
(21)
(5)
(P
=2,556)
Reflected in the Statement of Financial Position:

2013
2014
Net Movement
(In Millions)
Deferred tax assets (see Note 15)

Deferred tax liabilities
P1,218
=
(3,774)
(P
=2,556)
P
= 1,164
(4,228)
(P
= 3,064)
(P
=54)
(454)
(P
=508)
Net movement recognized in:

Profit or loss
Equity (OCI and Equity reserve)
(P
=48)
(460)
(P
=508)
As at December 31, 2013, deferred taxes included balances of acquired subsidiaries

amounting to P
=165.3 million of net deferred tax liability (see Note 4).
b. 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.
2013
2014
(In Millions)
NOLCO
Allowance for doubtful accounts
Provisions and other accruals
Accrued retirement cost and others
MCIT
=3,762
P
1,267
54
82
17
=5,182
P
P
= 4,203
1,267
635
18
P
= 6,123
c. As at December 31, 2014 and 2013, NOLCO of the Parent Company and various subsidiaries
can be carried forward and claimed as deduction from regular taxable income as follows:
Year Incurred
2014
2013
2012
2011
Amount
Acquisition
Addition
P
=
1,454
1,670
1,314
=
P4,438
P
=
P
=
=
P1,635
=
P1,635
Expired
P
=
(1,188)
(P
=1,188)
Application
(In Millions)
Balance
Expiry Year
P
=
(7)
(126)
(P
=133)
=
P1,635
1,447
1,670
=
P4,752
2017
2016
2015
2014
*SGVFS008665*
- 110 d. The following carryforward benefits of MCIT can be claimed as tax credits against future
income taxes payable:
Year Incurred
2014
2013
2012
2011
Amount
Acquisition
Addition
P
=
18
15
4
P
=37
P
=
P
=
P
=17
P
=17
Expired
P
=
(4)
(P
=4)
Application
(In Millions)
Balance
Expiry Year
P
=
P
=
P
=17
18
15
P
=50
2017
2016
2015
2014
e. The current provision for income tax for year ended December 31 consists of the following:
2014
2013
2012
(In Millions)
RCIT
MCIT
Final tax
P
=1,086
19
55
P
=1,160
=978
P
18
65
=1,061
P
=977
P
7
113
=1,097
P
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:
2014
2013
2012
(In Millions)

Income tax at statutory tax rate of
30.0%
Net income under ITH
Share in net earnings of equity
method investees
Changes in unrecognized deferred
tax assets and others
Effect of optional standard deduction
Various income subjected to lower
final tax rates - net
Final tax on interest income
Nondeductible (nontaxable) expenses
(income) - net
MCIT
Others
P
=13,782
=12,072
P
=10,869
P
4,135
(2,078)
3,621
(1,799)
3,261
(1,634)
(950)
(686)
(529)
(117)
(176)
(193)
(126)
536
(84)
55
(72)
65
(145)
106
405
18
P
=1,208
(235)
18
=593
P
47
7
13
=1,662
P
On December 18, 2008, the BIR issued Revenue Regulation (RR) No. 16-2008, which
implemented the provisions of R.A. 9504 on Optional Standard Deduction (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. MNTC opted
to avail of the OSD for the taxable years 2013 and 2014.
*SGVFS008665*
- 111 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 non-tax 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, will end in December 2015. ITH incentive enjoyed by Maynilad amounted to
P
=2,078.0 million, P
P1,889.9 million in 2014, 2013 and 2012, respectively.
PHIs operations in Legazpi City and Norzagaray, Bulacan were registered with the BOI as New
Bulk Supplier of Treated Water and New Operator of Bulk Water Supply Facility. As a registered
enterprise, PHI enjoys certain tax and non-tax incentives, including ITH until December 31, 2013
limited to the revenue generated from the sales of bulk water supply to Legazpi City Water
District and the bulk water supply facility with Norzagaray Water District.
CIC is registered with the BOI to build and transfer infrastructure project for the CAVITEX on a
pioneer status under the Omnibus Investments Code of 1987. As a registered enterprise, CIC is
entitled to certain tax and non-tax incentives, including ITH for the sale/revenue of the R-1
Extension, Segment 4 (Zapote to Kawit, Cavite) for a period of 6 years from January 2009 or
actual start of commercial operation, whichever is earlier, but in no case earlier than the date of
registration (February 8, 2008). As provided under the terms of the registration, CIC shall initially
be granted a four-year ITH. The additional two-year ITH shall be granted upon submission of
completed or on-going projects in compliance with its corporate social responsibility, which shall
be submitted before the lapse of its initial four-year ITH. CIC was not able to comply with the
requirements of the BOI, thus, did not avail of the ITH in 2014 and 2013.
30. Earnings Per Share

The calculation of earnings per share for the year ended December 31 follows:
2014
2013
2012
(In Millions, Except for Per Share Amounts)
Net income attributable to owners of the

Parent Company
Effect of cumulative dividends on preferred
shareholders of the Parent Company (see Note 22)
Net income attributable to common owners
of the Parent Company
(a)
(b)
(5)
=7,209
P
(5)
=5,907
P
(5)
P
=7,935
=7,204
P
=5,902
P
26,026
12
24,614
1,314
24,593
5
26,038
25,928
24,598
24
61
54
(e)
26,062
25,989
24,652
Basic earnings per share
(c/d)
P
=0.305
=0.278
P
=0.240
P
Diluted earnings per share
(c/e)
P
=0.304
=0.277
P
=0.239
P
Outstanding common shares at the beginning

of the year
Effect of issuance of common shares during the year
Weighted average number of common shares
for basic earnings per share
Effects of potential dilution from:
ESOP (see Note 31)
Weighted average number of common shares adjusted
for the effects of potential dilution
(c)
P
=7,940
(d)
*SGVFS008665*
- 112 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 time-weighting factor. The time-weighting factor is the number of days that the
common shares are outstanding as a proportion to the total number of days in the year.
In 2014, 2013 and 2012, the ESOP was considered in the computation of the diluted earnings and
certain grants were considered dilutive.
31. Share-based Payment

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 long-term 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.
First Grant. The Company granted on December 9, 2008 (Tranche A) and March 10, 2009
(Tranche B) options in respect of 123,925,245 common shares to its senior management.
Details of the said tranches follow: (a) Tranche A for 61,000,000 shares, 50.0% of which
vested immediately on January 2, 2009 with an exercise price of P
=2.12 per share and
(b) Tranche B for 62,925,245 shares, 50.0% of which vested on March 10, 2009 with an
exercise price of =
P2.73 per share. The remaining 50.0% of each said tranche will vest on the
first anniversary of the initial vesting date. The share options automatically vest on their
respective vesting schedules. The grantees of the said option may exercise in whole or in part
their respective options at any time after vesting but prior to the expiration of three years after
all of the options shares for such tranche have vested. Both tranches of the First Grant expired
on January 2, 2013 and March 10, 2013, respectively.
Second and Third Grants. In 2010, in consideration of the Philippine SECs policy to exclude
the independent directors from ESOP grant and pending MPICs consequent position paper
filed with the SEC maintaining the validity of the grant to independent directors, the
Compensation Committee modified the resolution it adopted on July 2, 2010. The
Compensation Committee approved a modified plan excluding the independent directors from
ESOP grant, without prejudice to reinstatement, as approved by the Philippine SEC on
September 20, 2010.
In the modified plan, MPIC allocated and set aside stock options relating to an additional
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
*SGVFS008665*
- 113 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 =
P3.50 on December 21, 2010 to officers of Maynilad (the Third
Grant A).
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).
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.
112 million common shares were granted under Tranche A while 8 million common shares
will be included under Tranche B. The grantees include the 3 independent directors of the
Company. Of the total shares granted, 14.0 million common shares are allocated to senior
management of MPTC. The grant was approved by the Philippine SEC on March 4, 2014.
The weighted average remaining term to expiry for the share options outstanding as at
December 31, 2014 and 2013 as follows:
2013
2014
(In Years)
First grant
Second grant
Third grant
Fourth grant
1.5
2.1
4.8
0.5
1.1
3.8
For the years ended December 31, 2014 and 2013, the weighted average share price of MPICs
common share is P
=4.87 and P
=5.17 per share, respectively. Total ESOP expense recognized in
2014, 2013 and 2012 follows:
2014
Personnel
Cost
(Note 25)
First grant
Second grant
Third grant
Fourth grant
Equity
Reserves
(Note 22)
P
=
64
P
=64
P
=
64
P
=64
2013
Personnel
Equity
Cost
Reserves
(Note 25)
(Note 22)
(In Millions)
P
=
P
=
18
18
P
=18
P
=18
2012
Personnel
Cost
(Note 25)
P
=
8
5
P
=13
Equity
Reserves
(Note 22)
P
=
8
5
P
=13
The following table illustrates the number of, exercise prices of, and movements in share options
in 2014 and 2013:
Outstanding at December 31, 2012

Exercised during the year (see Note 22)
Expired during the year
First Grant
Tranche A
Tranche B
Number
Exercise
Number
Exercise
of shares
price
of shares
price
15,000,000
=2.12
P
25,050,000
=2.73
P
(10,000,000)
2.12
(22,550,000)
2.73
(5,000,000)
(2,500,000)
Second Grant
Tranche A
Tranche B
Number Exercise
Number
Exercise
of shares
price
of shares
Price
59,380,000
=2.73
P
28,105,000
=2.73
P
(31,280,000)
2.73
(10,125,000)
2.73
28,100,000
=2.73
P
17,980,000
=2.73
P
(7,100,000)
2.73
(10,920,000)
2.73
21,000,000
= 2.73
P
7,060,000
= 2.73
P
Exercisable at:
December 31, 2012
December 31, 2013
December 31, 2014
15,000,000
59,380,000
28,100,000
21,000,000
=2.12
P
25,050,000
=2.73
P
=2.73
P
P2.73
=
= 2.73
P
16,975,000
17,980,000
7,060,000
=2.73
P
P2.73
=
= 2.73
P
*SGVFS008665*
- 114 -
Tranche A
Number
Exercise
of shares
price
10,000,000
P
=3.50
(6,500,000)
P
=3.50
3,500,000
P
=3.50
3,500,000
P
=3.50

Grant during the year
Exercised during the year (see Note22)
Exercised during the year (see Note22)
Expired during the period
Exercisable at:
December 31, 2012
December 31, 2013
December 31, 2014
6,500,000
3,500,000
3,500,000
Third Grant
Tranche B
Number
Exercise
of shares
price
1,000,000
P
=3.53
(650,000)
3.53
350,000
P
=3.53
(350,000)
3.53
P
=
P
=3.50
P
=3.50
P
=3.50
300,000
Tranche C
Number
Exercise
of shares
price
2,750,000
P
=3.66
(1,045,000)
3.66
1,705,000
P
=3.66
(927,000)
3.66
778,000
P
=3.66
P
=3.53
1,250,000
1,705,000
778,000
P
=3.66
P
=3.66
P
=3.66
Fourth Grant
Grant during the year

Tranche A
Number
of shares
56,000,000
56,000,000
(1,000,000)
55,000,000
Exercisable at:
December 31, 2013
December 31, 2014
55,000,000
Exercise
Price
P
=4.60
P
=4.60
4.60
P
=4.60
Tranche B
Number
of shares
56,000,000
56,000,000
56,000,000
Exercise
Price
P
=4.60
P
=4.60
P
=4.60
P
=4.60
The fair value of the options granted is estimated at the date of grant using Black-Scholes-Merton
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:
Spot Price
Exercise price
Risk-free rate
Expected volatility*
Term to vesting in days
Call price
Spot Price
Exercise price
Risk-free rate
Expected volatility*
Term to vesting in days
Call price
50.0%
vesting on
January 2,
2009
=2.10
P
=2.12
P
5.92%
94.07%
24
=0.20
P
30.0%
vesting on
August 1,
2011
=3.47
P
=3.50
P
1.62%
46.62%
223
=0.46
P
First Grant
Tranche A
Tranche B
50.0%
50.0%
50.0%
vesting on
vesting on
vesting on
March 10,
March 10,
January 2,
2010
2009
2010
=2.10
P
=2.70
P
=2.70
P
=2.12
P
=2.73
P
=2.73
P
6.60%
4.24%
4.82%
58.10%
61.25%
66.43%
389
61
365
=0.55
P
=0.27
P
=0.75
P
Tranche A
35.0%
35.0%
vesting on vesting on
August 1,
August 1,
2012
2013
=3.47
P
=3.47
P
=3.50
P
=3.50
P
2.83%
3.73
68.23%
72.82%
589
954
=1.20
P
=1.62
P
30.0%
vesting on
March 8,
2012
=3.53
P
=3.53
P
2.56%
39.32%
366
=0.58
P
Third Grant
Tranche B
35.0%
vesting on
March 8,
2013
=3.53
P
=3.53
P
4.38%
61.39%
731
=1.28
P
Second Grant
50.0%
vesting on
January 1,
2011
=2.65
P
=2.73
P
4.16%
48.33%
183
=0.35
P
Tranche A
50.0%
vesting on
January 1,
2012
=2.65
P
=2.73
P
4.92%
69.83%
548
=0.91
P
35.0%
50.0%
vesting on vesting on
March 8, April 14,
2014
2012
=3.53
P
=3.66
P
=3.53
P
=3.66
P
5.01%
2.05%
64.42%
39.13%
1,096
366
=1.62
P
=0.60
P
30.0%
vesting on
July 2,
2011
=2.65
P
=2.73
P
4.61%
69.27%
365
=0.73
P
Tranche C
50.0%
vesting on
April 14,
2013
=3.66
P
=3.66
P
3.83%
60.76%
731
=1.30
P
Tranche B
35.0%
35.0%
vesting on
vesting on
July 2,
July 2,
2013
2012
=2.65
P
=2.65
P
=2.73
P
=2.73
P
5.21%
5.67%
67.52%
76.60%
731
1,096
=1.03
P
=1.39
P
Fourth Grant
Tranche A
Tranche B
50.0%
50.0%
vesting on
vesting on
October 14,
October 14,
2014
2015
=4.59
P
=4.59
P
=4.60
P
=4.60
P
0.66%
2.40%
35.23%
33.07%
365
730
=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.
*SGVFS008665*
- 115 -
32. Contingencies
Water Segment
The following are the significant contingent liabilities of Maynilad as at December 31, 2014 and
2013:
Disputed Billings with MWSS. Additional Tranche B Concession Fees and interest penalty are
being claimed by MWSS in excess of the amount recommended by the Receiver. Such additional
charges being claimed by MWSS (in addition to other miscellaneous claims) amounted to
P
=5.0 billion and P
=4.9 billion as at December 31, 2014 and 2013, respectively. The Rehabilitation
Court has resolved to deny and disallow the said disputed claims of MWSS in its
December 19, 2007 Order, upholding the recommendations of the Receiver on the matter.
Following the termination of the Maynilads rehabilitation proceedings, Maynilad and MWSS
sought to resolve this matter in accordance with the dispute resolution requirements of the TCA
(see Notes 3 and 20).
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, 2014 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 February 26, 2015, the case is
still pending.
Cost of Living Allowance (COLA). On November 24, 2006, the Labor Arbiter issued a decision in
favor of the Maynilad Water Supervisors Association (MWSA), ordering the payment of COLA to
Maynilads supervisor-employees, retroactive to the date when they were hired by Maynilad in
1997, with legal interest from the date of promulgation of the decision until full payment of the
award or P
=249.5 million as computed and claimed by MWSA. This decision was reversed and set
aside by the National Labor Relations Commission (NLRC) in 2007, but reinstated by the Court of
Appeals in 2010. After the issuance of the Labor Arbiters decision in 2007, Maynilad executed a
compromise agreement with MWSA, wherein Maynilad agreed to pay MWSA residual benefits
equivalent to its claim for COLA for 23 months, from August 1997 to June 1999. Thus
Maynilads dispute with MWSA was limited to the supervisor-employees claim for COLA from
July 1999 up to the present time. In 2011, the Court of Appeals granted the motion for
reconsideration filed by Maynilad by issuing an amended decision reinstating and affirming the
resolutions of the NLRC. The Court of Appeals thereafter issued a resolution denying the motion
for reconsideration filed by MWSA. On November 16, 2011, MWSA filed a Petition for Review
on Certiorari before the Supreme Court, seeking to annul the said amended decision and the
resolution of the Court of Appeals.
*SGVFS008665*
- 116 On December 11, 2013, Notice of Judgment was issued by the Supreme Court which upheld the
assailed Amended Decision and Resolution of the Court of Appeals which held that the employees
of Maynilad are not entitled to receive COLA pursuant to the terms of Maynilads concession
agreement.
On February 26, 2014, the Second Division issued a resolution (1) denying with finality MWSAs
motion for reconsideration and (2) denying MWSAs motion to refer the case to the Court En
Banc. In its Decision, the Supreme Court upheld the assailed Amended Decision and Resolution
of the Court of Appeals that reinstated the earlier ruling of the NLRC that held that the employees
of Maynilad are not entitled to receive COLA pursuant to the terms of the Concession Agreement.
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.
Toll Operations Segment
Value-Added Tax (VAT). In view of RMC 39-2011, MNTC 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, MNTC received the following
VAT assessments:
MNTC received a Formal Letter of Demand from the BIR on March 16, 2009 requesting
MNTC to pay deficiency VAT plus penalties amounting to P
=1,010.5 million for taxable year
2006.
MNTC received a Final Assessment Notice from the BIR dated November 15, 2009, assessing
MNTC for deficiency VAT plus penalties amounting to P
=557.6 million for taxable year 2007.
MNTC received a Notice of Informal Assessment from the BIR dated October 5, 2009,
assessing MNTC for deficiency VAT plus penalties amounting to =
P470.9 million for taxable
year 2008.
On May 21, 2010, the BIR issued a Notice of Informal Conference assessing MNTC for
deficiency VAT plus penalties amounting to =
P1.0 billion for taxable year 2009.
On April 3, 2014, the BIR accepted and approved the Companys application for abatement and
issued a Certificate of Approval for the cancellation of the basic output tax, interest and
compromise penalty amounting to =
=584.6 million for taxable years 2006 and
2007, respectively.
Notwithstanding the foregoing, management believes, in consultation with its legal counsel, that in
any event, the Supplemental Toll Operation Agreement among MNTC, Republic of the Philippines,
acting by and through the Toll Regulatory Board, and PNCC, provides MNTC with legal recourse in
order to protect its lawful interests in case there is a change in existing laws, which makes the
performance by MNTC of its obligations materially more expensive.
*SGVFS008665*
- 117 Local Business Tax (LBT). On July 7, 2011, the Regional Trial Court (RTC) of Bulacan ruled that
MNTC is liable for =
P67.4 million in local business taxes and permits and regulatory fees. In 2012,
the Court of Tax Appeals (CTA) modified the RTC of Malolos, Bulacans decision and cancelled
and set aside for lack of basis the notice of assessment dated 2008 issued against MNTC for
P
=67.4 million LBT for the years 2005 to 2007. The municipality of Guiguinto subsequently filed
with the CTA a motion for reconsideration. The CTA, in a resolution dated April 25, 2013, denied
the motion for reconsideration filed by the municipality of Guiguinto. The decision and resolution
of the CTA have not been appealed and have thus become final, inappealable, and executory.
On September 3, 2013, an agreement was signed between MNTC and the Municipality of
Guiguinto to finally reconcile past collections and settle any remaining obligations to keep
MNTCs accounts with Guiguinto current. The parties agreed that (a) all of MNTCs previous
payments of P10.0 million should be deemed advance payments for any liability for LBT and
regulatory fees; and (b) MNTC shall pay P8.0 million to cover remaining LBT and regulatory fees
up to the fourth quarter of 2013. The parties agreed that the payments made or to be made under
this agreement shall constitute full and sufficient payment by MNTC of any and all liability for
LBT, regulatory fees, surcharges, interests, and penalties for the years 2004 to 2013 to Guiguinto,
and MNTC is therefore released, free, and clear from any and all such liabilities for the stated
period.
Real Property Tax (RPT). MNTC 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 MNTC 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 MNTC was P
=304.9 million. The LBAA has yet to determine whether said
properties in fact covers portions of the NLEX, which MNTC 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
(DOF-BLGF) 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
DOF-BLGF to hold the enforcement of any collection remedies in abeyance.
The outcome of the claims on RPT cannot be presently determined. The management of MNTC
believes that these claims will not have a significant impact on the Companys consolidated
financial statements and believes that the STOA also provides MNTC with legal recourse in order
to protect its lawful interests in case there is a change in existing laws which makes the
performance by MNTC 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.
*SGVFS008665*
- 118 Power Segment

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 this may prejudice Meralcos position in on-going claims, litigations
and assessments.
Supreme Court (SC) Temporary Restraining Order (TRO) on December 2013 Increase in Meralco
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 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, which reflected a total increase of =
P4.15/kWh for a
200-kWh residential consumer. The generation costs for the November 2013 supply month,
increased significantly because of the use of the more expensive liquid fuel by the natural gasfired power plants that were affected by the Malampaya Gas Field or Malampaya, shutdown from
November 11 to December 10, 2013. This was compounded by the aberrant spike in the
Wholesale Electricity Spot Market (WESM), charges on account of the scheduled and extended
shutdown, and the forced outages of several base load power plants, as well as the non-compliance
with WESM Rules by certain plants resulting in significant power generation capacities not being
offered and dispatched.
On December 19, 2013, several party-list representatives in the House of Representatives, filed a
Petition against Meralco, ERC and the Department of Energy or DOE before the SC, questioning
the ERC clearance granted to Meralco to charge the =
P4.15/kWh price increase, alleging the lack of
hearing and due process. It also sought for the declaration of the unconstitutionality of Sections 6
and 29 of Republic Act No. 9136, The Electric Power Industry Reform Act of 2001 or 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 or AGRA that the ERC had promulgated. Both petitions prayed for the issuance of a
TRO, and Writ of Preliminary Injunction.
On December 23, 2013, the SC consolidated the two (2) Petitions and granted the application for
TRO effectively immediately and for a period of sixty (60) days, which effectively enjoined the
ERC and Meralco from implementing the P
=4.15/kwh price increase. The SC also ordered
Meralco, ERC and DOE to file their respective comments to the Petitions and set the hearing for
Oral Arguments on January 21, 2014. The SC further set two more Oral Arguments on
February 4, 2014 and February 11, 2014. After the conclusion of the Oral Arguments, the SC
gave 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 had filed its Memorandum on said date.
On February 18, 2014, acting on the motion filed by the Petitioners, the SC extended for another
period of 60 days or until April 22, 2014, the TRO that it originally issued against Meralco and
ERC on December 23, 2013. The TRO was also similarly applied to the generating companies,
specifically Masinloc Power Partners Co. Ltd. (MPPCL), San Miguel Energy Corporation
(SMEC), South Premier Power Corporation, First Gas Power Corporation, and the National Grid
Corporation of the Philippines, and the Philippine Electricity Market Corporation or PEMC (the
administrator of WESM and market operator) who were all enjoined from collecting from Meralco
the deferred amounts representing the P
=4.15/kWh price increase for the November 2013 supply
month.
*SGVFS008665*
- 119 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. 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 P
=9,274 million. 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 Corporation, Team (Philippines) Energy
Corporation, Panasia Energy Holdings, Inc., and SMEC, have filed motions for reconsideration
questioning the Order dated March 3, 2014. Meralco filed a consolidated comment to these
motions for reconsideration.
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.
In its Order dated October 15, 2014, the ERC issued an Order denying the motion filed by the
generating companies. The generator companies have filed separate petitions before the CA to
question the March 3, 2014 and October 15, 2014 Orders of the ERC.
On April 22, 2014, the SC extended indefinitely the TRO issued on December 23, 2013 and
February 18, 2014 and directed generating companies not to collect from Meralco. The SC has
yet to resolve the various petitions filed against Meralco, ERC and DOE as at February 26, 2015.
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 BLC which NOHI sold to a third party. The assessment was based on the
finding of the Bureau of Internal Revenue-Large Taxpayer Service (BIR-LTS) 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 the companys
*SGVFS008665*
- 120 position. The company 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 Petion for Review and directed the parties to submit their memoranda. As of
February 26, 2015, NOHI through its counsel is preparing the memorandum for submission to the
CTA.
NOHI firmly believes that it is not liable for the deficiency donors taxes and that it has strong
legal and factual basis to question the FDDA in its appeal with the CTA.
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 =
P434.1 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. However, subject to actual payment of pending taxes included in the warranties,
the provision has remained in the books.
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 P
=158.0 per share for a total consideration of =
P411.4 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 P
=54.8 million in 2009 for liability equivalent to the unrealized
gain. Thus, total liability 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. As at February 26, 2015, NOHI is awaiting release from the guarantee undertaking from
Columbus to reverse the provision.
In the opinion of management and NOHIs legal counsel, the eventual liability from these lawsuits
or claims, if any, will not have a material adverse effect on NOHIs financial position and
financial performance, as well as in MPICs consolidated financial statements.
Other disclosures required by PAS 37 were not provided as it may prejudice the Companys
position in ongoing claims, litigations and assessments.
*SGVFS008665*
- 121 -
33. Significant Contracts, Agreements and Commitments

MPIC
Landcos Restructuring. On December 22, 2014, MPIC entered into an agreement with Landco
and its controlling shareholder, ABHC to restructure and clean up the balance sheet of Landco in
preparation for an eventual sale to third parties. The agreement contemplates the implementation
of the following transactions: (i) the conversion of MPICs preferred shares in Landco to common
shares, (ii) additional subscription to non-voting preferred shares by way of cash infusion and
conversion of MPICs receivables from Landco into equity, (iii) offsetting of certain intercompany accounts, and (iv) spin off of non-performing assets of Landco to a separate company.
The cash infusion will be to the extent of =
P85.0 million and conversion of receivables into equity
to the extent of P
=79.8 million. The conversion of the preferred shares to common shares in
Landco and assumption of ABHCs payable to Landco of =
P155.3 million were completed in 2014.
After the transactions disclosed above, 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 (included
under AFS Financial Assets account as at December 31, 2013), were reclassified to Assets held
for sale. The carrying amount of all interests in Landco as at December 31, 2014 comprising of
P
=755.5 million of common shares or 38.1% interest (which percentage of ownership would qualify
as an investment in associate) and P
=614.3 million of loans and interest receivable from Landco
and ABHC, is expected to be recovered principally through a sale transaction and the sale is
considered highly probable. As the total carrying amount of all interests in Landco is less than the
fair value less costs to dispose, no impairment loss was recognized for the period ended
December 31, 2014.
Water Segment
Contracts. In relation to Maynilads concession agreement (the Concession Agreement),
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.
Commitments. Significant commitments under the Concession Agreement follow:
a. Payment of Concession Fees (see Note 18)
*SGVFS008665*
- 122 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.
Rate Rebasing Period
Aggregate Amount
Drawable Under
Performance Bond
(In Millions)
First (August 1, 1997 December 31, 2002)

Second (January 1, 2003 December 31, 2007)
Third (January 1, 2008 December 31, 2012)
Fourth (January 1, 2013 December 31, 2017)
Fifth (January 1, 2018 May 6, 2022)
US$120.0
120.0
90.0
80.0
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 13), 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 MWSS-ROs 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.
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 MWSS-RO due to unforeseen
circumstances.
*SGVFS008665*
- 123 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 MWSS-RO
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 third-party 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. Non-incurrence 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 MWSS-RO, amounts to an effective
abandonment of the Concession Agreement and which failure continues for at least 30 days
after written notice from the MWSS-RO, may cause the Concession Agreement terminated.
Operating Lease Commitment. Maynilad 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
P
=167.7 million, P
P175.2 million in 2014, 2013 and 2012, respectively.
Future minimum operating lease payments as at December 31, 2014 and 2013 are:
Period Covered
2014
Not later than one year

More than one year and not later than five years
More than five years
P
=112
154
170
2013
(In Millions)
P
=132
76
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, which as of February 26, 2015 has yet to be
incorporated. 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 Oro's population of
640,000.
Toll Operations Segment
NLEX Concession Agreement. Obligations and commitments of MNTC under the NLEX
Concession Agreement are discussed in Notes 13 and 17.
Subic-Clark-Tarlac Expressway (SCTEX) Concession Agreement. On February 9, 2015, MNTC,
received the Notice of Award from the BCDA for the management, operation and maintenance of
the 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.
On February 26, 2015, MNTC and BCDA signed the Business Agreement (BA), marking the
culmination of BCDAs effort to privatize the management, operation and maintenance of the
SCTEX. The BA binds MNTC and BCDA to a contract for the management, operation and
maintenance of SCTEX until the end of the SCTEX concession period (October 30, 2043). The
*SGVFS008665*
- 124 privatization provides the opportunity to realize MNTCs vision of integrating the operation of NLEX
with SCTEX, thereby offering seamless expressway travel to motorists. The effectivity of the BA is
subject to conditions precedent, among which is the TRB approval and signing of the STOA. On
February 26, 2015, the Business Operating Agreement was signed with full take over of the SCTEX
operation expected by second quarter of 2015.
On February 5, 2015, MNTC and BCDA signed the NLEX-SCTEX Integration Agreement
relating to the toll collection system integration that will feature a common transit ticket system
for both NLEXs closed system and that of the SCTEX. The project is expected to be completed
within the year.NLEX-SLEX Connector Road Project. The Connector Road Project was approved
by the NEDA Board on February 20, 2015 as an unsolicited proposal under the BOT Law. This is
expected to trigger the commencement of the Swiss Challenge within 2nd quarter of 2015.
MPTDC, as Original Proponent of the unsolicited proposal, awaits DPWHs written notice of the
NEDA Board approval.
Construction Contract for NLEX Segment 9. On May 3, 2013, MNTC, under a competitive
bidding, has awarded the Civil Works contract to EEI Corporation. The Civil Works Construction
Agreement was executed by MNTC and EEI Construction in relation to the construction of the
2.4 km Segment 9 (part of Phase II of NLEX), a four-lane expressway that links the SMART
Connect Interchange to McArthur Highway. Total civil works construction contract was set at
P
=1,145.4 million, as may be adjusted from time to time pursuant to the terms of the agreement.
The Construction Notice to Proceed was issued by MNTC to EEI Corporation in May 2013 and
mobilization works commenced in May 2013. The construction works are expected to be
completed by first quarter of 2015.
Unapplied mobilization advances to EEI Corporation, included as part of Advances to contractors
and consultants in the consolidated statement of financial position, amounted to P
=71.0 million
and P
=140.0 million as at December 31, 2014 and 2013, respectively.
Construction Contract for NLEX Segment 10. On April 28, 2014, MNTC signed a target cost
construction contract with Leighton Contractors (Asia) Ltd. (LCAL) for the construction of NLEX
Segment 10, a 5.6-km, four-lane elevated expressway that will start from the terminal of Segment 9 in
Valenzuela City and go south to C-3 Road in Caloocan City above the alignment of the PNR railway
tracks. The target cost is approximately =
P10 billion (inclusive of VAT) with a completion period of
twenty-four (24) months from start date. 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 bank-issued
irrevocable stand-by letter of credit, (ii) cash retention, and (iii) a parent company guarantee issued by
Leighton Asia Limited. Construction is in progress as of February 26, 2015 with target completion
date of fourth quarter of 2016.
On May 8, 2014, MNTC issued the notice to proceed to LCAL, signalling the start of preconstruction activities. Pursuant to the contract, MNTC placed a reserve amount of P
=889 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 under noncurrent assets.
PNCC. PNCC is a non-controlling stockholder in MNTC. In consideration of the assignment by
PNCC of its usufructuary rights, interests and privileges under its franchise, PNCC is entitled to
receive a payment equivalent to 6.0% and 2.0% of the toll revenue 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 1.0% per annum. The PNCC franchise expired in
May 2007 but since the payment is a continuing obligation under the Shareholders Agreement,
PNCC continues to receive the same payment. However, on December 2, 2010, MNTC received a
*SGVFS008665*
- 125 letter from the TRB dated November 30, 2010, citing a decision of the Supreme Court dated
October 19, 2010 directing MNTC to remit to the National Treasury, through TRB, all payments
representing PNCCs percentage share of the toll revenues and dividends, if any, arising out of
PNCCs participation in the NLEX Project.
On the basis of the conflicting claims of PNCC and TRB to the revenue share and dividends, on
December 8, 2010, MNTC filed a motion for clarification asking the SC to clarify the entity to
which MNTC should remit its payments which was then due on December 20, 2010. Pending
resolution by the SC of the motion for clarification, MNTC filed a petition for consignation with
the RTC of Caloocan for the latter to hold the payments in trust and deliver to the party ultimately
adjudged by the SC to be entitled to it. On December 29, 2010, MNTC through a letter sent by its
legal counsel, informed PNCC and TRB of the consignation made to the RTC of Caloocan.
In a resolution dated January 18, 2011, the SC directed MNTC to remit to the National Treasury
PNCCs percentage share of toll revenues and dividends arising out of PNCCs participation in the
NLEX Project. On April 12, 2011, the SC issued a Resolution directing MNTC 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 guideline relative to the determination of the net income remittable by
PNCC to the National Treasury. In the meantime, while the guidelines have yet to be formulated,
PNCC and TRB have agreed to remit the entire consigned amount to the National Treasury.
Following the directive of the TRB dated March 22, 2012, MNTC has remitted to the National
Government through the TRB the payments for the PNCC fees accruing since the month of
December 2010 and the dividends payable to PNCC since July 2010. In accordance with the TRB
directive, 90% of the PNCC fees and dividends payable was remitted to the TRB while the
balance of 10% to PNCC.
On September 19, 2011, Forum Holdings Corporation (FHC, an Intervenor) filed a Petition-inIntervention with the RTC of Caloocan praying that MNTC be ordered to comply with its
contractual commitment to PNCC under contract by releasing and delivering directly to PNCC the
consigned amount. The Intervenor, however, does not pray for any damages against MNTC.
PNCC has filed its opposition to the Motion for Intervention. On January 11, 2012, RTC of
Caloocan, despite the fact that the consigned amount at that time has already been remitted to the
National Treasury, granted FHCs petition filed on September 19, 2011. On September 6, 2013,
the RTC heard the case to decide on the prayer for dismissal requested by MNTC, TRB and
PNCC in their urgent joint manifestation and motion. During said hearing, the RTC found that the
petition for consignation was already rendered moot and academic since the consigned amount
was already remitted to the National Government and FHC already withdrew its intervention.
Since there was no more pending incident for resolution, the RTC ordered the case dismissed.
Power Segment
Renewable Energy / Waste Management Project. MPIC and Global Green International Energy
(GGIE), a Singapore-based company, have partnered to develop a renewable energy / waste
management project. MPIC and GGIE plan to invest approximately P
=240.0 million (US$5.3
million) in equity, out of the total project cost of =
P480 million (US$10.6 million). The facility, to
be located in Tagum City, Davao del Norte, will convert 20 to 25 metric tons of municipal solid
waste into about 13,000 liters of biodiesel daily. The facility can be expanded to allow the
conversion of excess heat into electricity. On November 7, 2014, MPIC and GGIE incorporated
Metro Global Green Waste, Inc., as an investment holding company for the waste-to-energy
projects.
*SGVFS008665*
- 126 Healthcare Segment

Lease agreements. As discussed in Note 3, EMHMC and CVHMC entered into lease agreements
with SSpS and RCAM for the management and operation of OLLH and CSMC, respectively.
Each of these lease agreements is for a period of 20 years, renewable for successive periods of 10
years upon the mutual consent of both parties. EMHMC and CVHMC accounted for their
respective lease agreements as acquisition of a business in accordance with PFRS 3.
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. Below is the schedule of
fixed and variable monthly rent:
Annual
Fixed
Variable Rent
Monthly (% of Prior Years
Rent
Net Revenues)
Period
(In Thousands)
EMHMC
November 2010 to October 2015
CVHMC
March 2009 to February 2014
P
=1,000
1,250
1,500
2.00%
2.25%
2.50%
3,000
3,300
3,630
3,993
3.00%
3.00%
3.00%
3.00%
Lease payments under these arrangements are as follows:

Fixed
2014
Variable
Total
Fixed
2013
Variable
Total
(In Millions)
Not later than one year

More than one year and not
later than five years
More than five years
Total lease payments
Less amount representing
interest
Present value of lease
obligation
P
=52
P
=45
P
=97
=51
P
=62
P
=113
P
238
598
888
321
1,136
1,502
559
1,734
2,390
259
628
938
355
1,167
1,584
614
1,795
2,522
1,328
1,447
P
=1,062
=1,075
P
EMHMC commits to improve and develop OLLH, by way of cumulative capital expenditures of
at least =
P350.0 million no later than November 1, 2015. The commitment shall be utilized in
accordance with EMHMCs Capital Expenditure (CAPEX) program and in the event that
EMHMC fails to make or infuse the commitment in the amounts and within the period stated,
EMHMC shall deposit in escrow such deficiency and the use of which will be mutually
determined by both parties. As of December 31, 2014, the approved CAPEX infusion is at
P
=181.8 million covering period of up to December 31, 2013. In 2014, EMHMC infused
P
=76.8 million to the CAPEX program which is still for review and approval.
*SGVFS008665*
- 127 CVHMC has a commitment to make a Capital Expenditure in CSMC amounting to at least
=
P750.0 million (CAPEX Commitment) no later than the 10th anniversary of the Agreement, with
at least P
=250.0 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. CVHMCs accumulated infusion to the CAPEX program are
P
P1,018.4 million as of December 31, 2014 and 2013, respectively.
On September 16, 2011, CVHMC renewed a purchase commitment with a third party supplier
with a minimum purchase requirement amounting to =
P28.0 million worth of certain medical
products for two years expiring September 2013. The agreement provides for rebates and
discounts but if CVHMC fails to meet the set minimum purchase requirements, CVHMC shall pay
the supplier the amount equal to all the rebates provided plus default interest. CVHMC completed
its minimum purchase commitment in September 2013.
Rail Segment
=
P 65-billion Light Rail Transit Line 1 Cavite Extension and Operations & Maintenance Project
(the LRT Project). On October 2, 2014, LRMC signed together with the Department of
Transportation and Communications (DOTC) and the Light Rail Transit Authority (LRTA, and
together with DOTC as Grantors) the Concession Agreement for the LRT Project. LRMC was
formally awarded the LRT Project by the DOTC and LRTA after the consortium of MPLRC, AC
Infrastructure Holdings Corporation (AC Infra) and Macquarie Infrastructure Holdings
(Philippines) PTE Ltd. (MIHPL) submitted the lone bid with a premium of =
P9.35 billion.
The concession agreement is for a period of thirty-two (32) years commencing from the Effective
Date. The Required Effective Date means the date falling twelve (12) months after the signing
date of or as extended in accordance with the concession agreement. The handover of the
operation and maintenance of the existing system of the LRT by the Grantors to LRMC shall take
place on the Effective Date or such other time as may be agreed in writing between the Grantors
and the Concessionaire. The Effective Date is subject to certain conditions precedent under the
concession agreement.
Under the Concession Agreement, LRMC will operate and maintain the existing LRT Line 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 this route, which traverses the cities of
Paraaque and Las Pias up to Bacoor, Cavite. LRMC will invest P
=40.0 billion on the Project.
The extended rail line is envisioned to help ease the worsening traffic conditions in the ParaaqueLas Pias-Cavite corridor. It is also expected to enhance commercial development around the rail
stations.
LRMC is required to pay the bid premium of P
=9.35 billion as concession fees, based on the
following schedule:
10% of the bid amount within twenty (20) days from receipt of the Notice of Award (NOA),
which amount has already been paid;
10% of the bid amount upon Effective Date which is nine (9) months to a maximum of twelve
(12) months from Signing Date of the Concession Agreement;
80% of the bid amount in equal quarterly instalments over the Concession Period with the first
payment on the fifth anniversary of the Effective Date as defined under the Concession
Agreement.
*SGVFS008665*
- 128 Equity infusion as at December 31, 2014 of the other shareholders in LRMH and LRMC with an
aggregate amount of P
=722.5 million are included in Other changes in NCI in the consolidated
statement of changes in equity.
Escrow Agreement. On October 20, 2014, pursuant to the requirements of the 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 the
Concessionaire. Such shares would be held in escrow until the third anniversary of the Extension
Completion Date as defined under the Concession Agreement.
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 Concession Agreement, 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 Concession Agreement. 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 then-current 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 =
P7.3 billion with a sound value of P
=13.8 billion.
MWSS corporate headquarters are made available to Maynilad and the East Concessionaire for a
one-year period beginning on the commencement date, subject to yearly renewal with the consent
of the parties concerned. Rent expense related to these properties amounted to =
P38.0 million,
P
=33.8 million and =
P33.1 million in 2014, 2013 and 2012, respectively.
35. Financial Risk Management Objectives and Policies

The Companys principal financial instruments consist mainly of borrowings from a related party
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, short-term deposits, receivables, accounts payable and other current
liabilities, concession fees payable and other related party transactions which arise directly from
the Companys operations. The Company also holds AFS financial assets.
*SGVFS008665*
- 129 The Company also enters into derivative transactions, particularly interest rate swaps and crosscurrency swaps, to manage the interest rate and foreign currency risks arising from its long-term
debts (see Note 36).
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.
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.
MPIC. MPICs exposure to credit risk is equal to the carrying amount of its financial assets.
MPIC has no concentration of credit risk.
Toll segment. Receivables arose mainly from Easytrip Services Corporation (ESC) when Easytrip
tag-motorists ply in NLEX and those non-toll revenues in the form of advertising services
particularly from SMART. ESC, a joint venture of the Company beginning 2014 (see Note 11),
assists MNTC in increasing the usage of the electronic toll collection (ETC) facility. The
segments due from related parties are mainly from TMC. ESC, SMART and TMC are
considered as low-risk counterparties as these are well-established companies. Moreover, MNTC
has payment obligations to TMC which far exceed the aggregate amount of receivables and dues
from TMC. Receivables also arose from motorists who cause accidental damage to NLEX
property from day-to-day operations. Property damage claims are initially processed by TMC and
are eventually turned over to MNTC. MNTC also has advances made to DPWH, a Philippine
government entity, which is covered by a Reimbursement Agreement.
MNTC also generates non-toll 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 one-time
access fees to recurring fees calculated as a percentage of sales. The arrangements are backed by a
service facility contract between MNTC 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, MNTC 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.
Water segment. 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.
*SGVFS008665*
- 130 Healthcare segment. 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.
MPIC Group. 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. The collateral covering certain
receivables represents first-ranking pledge of Landco common shares in favor of the Company.
For due from related parties, credit enhancement represents payable to the same counterparty that
the Company will not pay until collection of the receivables.
*SGVFS008665*
- 131 -
Financial assets at FVPL Derivative assets

Loans and receivables:
Cash and cash equivalents(a)
Short-term deposits
Restricted cash
Receivables
Due from related parties (current and noncurrent)
Deposits for LTIP(b)
Long-term cash and miscellaneous deposits(b)
AFS financial assets (c)
(a)
(b)
(c)
2013
Gross
Maximum
Exposure
(a)
2014
Fair Value and
Financial
Effect of
Collateral or
Credit
Enhancement
(b)
P
=-
P
=
P
=
P
=32
P
=
P
=32
17,638
8,033
2,367
3,939
140
345
308
1,938
P
=34,708
69
P
=69
17,569
8,033
2,367
3,939
140
345
308
1,938
P
=34,639
11,493
3,627
1,827
4,342
294
131
313
3,515
P
=25,574
54
465
P
=519
11,439
3,627
1,827
3,877
294
131
313
3,515
P
=25,055
Gross
Maximum
Net
Exposure
Exposure
(a)
(c) = (a) (b)
(In Millions)
Fair Value and

Financial Effect of
Collateral
or Credit
Enhancement
(b)
Net
exposure
(c) = (a) (b)
Excludes cash on hand amounting to =

P 86.9 million and =
P 142.7 million as at December 31, 2014 and 2013, respectively.
Included under Other noncurrent assets account in the consolidated statement of financial position.
Excludes shares of stocks.
*SGVFS008665*
- 132 As at December 31, 2014 the aging analysis of past due but not impaired financial assets is as follows:

Short-term deposits
Restricted cash
Receivables:
Notes receivable
Trade receivables
Accrued interests receivables
Dividends receivable
Others
AFS(b)
Deposits for LTIP
Long-term cash and miscellaneous deposits(c)
Neither Past
Due nor
Impaired
<30 Days
3060 Days
P
=17,638
8,033
2,367
P
=
P
=
P
=
P
=
1,982
373
51
73
41
547
140
1,938
345
308
P
=33,836
322
P
=325
142
P
=142
152
P
=152
140
11
P
=151
Total
Total
Collectively
and
Individually
Impaired
P
=
P
=
P
=17,638
8,033
2,367
P
=
P
=17,638
8,033
2,367
12
90
P
=102
768
90
14
P
=872
2,750
373
51
90
73
41
561
140
1,938
345
308
P
=34,708
150
716
12
P
=879
150
3,466
373
51
102
73
41
562
140
1,938
345
308
P
=35,587
Past Due but not Impaired

6190 Days 91-120 Days
>120 Days
(In Millions)
Total
*(a)
Excluding cash on hand.

Excluding shares of stocks.
(c)
(b)
*SGVFS008665*
- 133 As at December 31, 2013 the aging analysis of past due but not impaired financial assets is as follows:

Short-term deposits
Restricted cash
Receivables:
Notes receivable
Trade receivables
Others
AFS(b)
Deposits for LTIP
Long-term cash and miscellaneous deposits(c)
Derivative assets(c)
*(a)
(b)
(c)
Neither Past
Due nor
Impaired
<30 Days
3060 Days
=
P11,493
3,627
1,827
=
P
=
P
=
P
=
P
853
1,406
441
279
80
28
444
294
3,515
131
313
32
=
P24,763
261
=
P262
163
=
P168
98
=
P102
97
=
P100
Past Due but not Impaired

6190 Days 91-120 Days
>120 Days
(In Millions)
Total
Total
Individually
Impaired
Total
=
P
=
P
=11,493
P
3,627
1,827
=
P
=11,493
P
3,627
1,827
88
90
=
P167
707
90
14
=
P811
853
2,113
441
279
90
80
28
458
294
3,515
131
313
32
=25,574
P
180
667
6
12
=
P867
1,033
2,780
441
285
102
80
28
460
294
3,515
131
313
32
=26,441
P

*SGVFS008665*
- 134 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.
High Grade
Short-term deposits
Restricted cash
Receivables:
Trade receivables
Others
Deposit for LTIP(c)
Miscellaneous deposits(c)
AFS financial assets (d)
2014
Standard Sub-standard
Grade
Grade
(In Millions)
Total
P
=17,638
8,033
2,367
P
=
P
=
P
=17,638
8,033
2,367
1,538
373
51
73
41
547
345
140
1,938
P
=33,084
388
308
P
=696
56
P
=56
1,982
373
51
73
41
547
345
140
308
1,938
P
=33,836
(a)

Included under Other current assets account in the consolidated statement of financial position.
(d)
(b )
(c)
High Grade
Financial assets at FVPL Derivative assets
Short-term deposits
Restricted cash
Receivables:
Notes receivable
Trade receivables
Others
Deposit for LTIP(c)
Miscellaneous deposits(c)
AFS financial assets (d)
2013
Standard
Sub-standard
Grade
Grade
(In Millions)
Total
=32
P
=
P
=
P
=32
P
11,493
3,627
1,827
11,493
3,627
1,827
589
662
441
279
80
28
444
131
229
3,515
=23,377
P
264
668
313
=1,245
P
76
=76
P
853
1,406
441
279
80
28
444
131
229
313
3,515
=24,698
P
(a)

Included under Other current assets account in the consolidated statement of financial position.
(c)
(d)
(b )
*SGVFS008665*
- 135 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.
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. Sub-standard 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
MPIC Group. 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
short-term deposits, amounting to =
P15,263.3 million as at December 31,
2014 and 2013, respectively, that are allocated to meet the Companys short-term liquidity needs.
The table below summarizes the maturity profile of the Companys financial assets and liabilities
as at December 31, 2014 and 2013 based on undiscounted contractual payments.
2014
Financial Assets
Short-term deposits
Receivables
Beacon Electric preferred shares (b)
Cash and miscellaneous deposits (d)
Financial Liabilities
Accrued expenses(e)
Accrued construction costs
Trade payables(e)
Accounts payable
On Demand
Within
1 Year
12 Years
23 Years
(In Millions)
34 Years
More than
4 Years
Total
= 3,174
P
1,675
4,849
= 14,464
P
8,033
2,880
140
323
25,840
P
=
263
310
653
1,226
P
=
P
=
542
542
P
=
11,573
1,490
13,063
= 17,638
P
8,033
4,818
140
11,573
2,665
653
45,520
546
2,607
2,680
2,741
1,026
2,607
2,680
3,287
1,026
(Forward)
*SGVFS008665*
- 136 2014

Dividends payable
Retention payable
Other current liabilities(e)
Payable to CHI
Customers guaranty deposits (f)
Concession fees payable
Long-term debts(g)
Liquidity gap
On Demand
Within
1 Year
12 Years
23 Years
(In Millions)
34 Years
More than
4 Years
Total
P
=
546
= 4,303
P
P721
=
299
260
277
7,338
163
1,501
7,214
26,827
(P
= 987)
P
=
1,266
7,096
8,362
(P
= 7,136)
P
=
1,155
6,155
7,310
(P
= 7,310)
P
=
1,172
10,147
11,319
(P
= 10,777)
P
=
804
13,485
52,990
67,279
(P
= 54,216)
P721
=
299
260
277
7,338
163
804
18,579
83,602
121,643
(P
= 75,523)
On Demand
Within
1 Year
12 Years
23 Years
(In Millions)
34 Years
More than
4 Years
Total
=2,413
P
792
3,205
P9,080
=
3,627
2,991
240
2,103
18,041
=
P
215
11
226
=
P
11
481
444
936
=
P
190
11
464
665
=
P
501
221
11,573
1,897
14,192
=11,493
P
3,627
4,689
494
11,573
4,945
444
37,265
583
45
25
93
7
6
759
=2,446
P
2,189
4,655
2,966
902
620
425
218
177
163
11
1,214
5,130
18,670
(P
=629)
784
221
11,889
38,277
51,171
(P
=36,979)
2,189
4,655
3,549
947
620
425
218
202
93
163
784
265
16,434
62,206
92,750
(P
=55,485)
2013
Financial Assets
Short-term deposits
Receivables
Beacon Electric preferred shares (b)
Cash and miscellaneous deposits (d)
Accrued expenses(e)
Accrued construction costs
Trade payables(e)
Accounts payable
Dividends payable
Retention payable
Other current liabilities(e)
Payable to CHI
Customers guaranty deposits (f)
Financial guarantee obligation(f)
Concession fees payable
Long-term debts(g)
11
1,119
4,848
5,978
(P
=5,752)
11
1,155
4,084
5,250
(P
=4,314)
11
1,050
9,861
10,922
(P
=10,257)
Liquidity gap
(a)
(b)
Included in the 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 Deferred credits and other long-term 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, 2014 and 2013, 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 long-term 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 interest-bearing loans. Specific interest rate risk policies are as follows:
MPIC. In 2013, MPIC entered into a loan agreement to refinance its outstanding loan. The new
loan bears 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.
*SGVFS008665*
- 137 Tollway segment. The debt of the entities in this group are significantly fixed-rate loans,
effectively locking in the interest rate in order to reduce exposure to interest rate fluctuations.
With 100.0% of the financial instruments in local currency loans, around 21.0% of which is in
floating interest rate, exposure is now limited to changes in six-month PDST-F.
Water segment. Maynilads exposure to interest rate risk relates primarily to its interest-bearing
loans. Maynilad maintains a mix of floating and fixed rate loans, currently at a ratio of 3%
floating and 97% fixed. The floating rate interest-bearing loans will increase to a higher portion
over time because of future drawdowns in connection to the MWMP loan agreement.
MPIC Group. The following tables set out the carrying amount, classified by maturity, of the
Companys interest-bearing financial assets and financial liabilities that are subject to interest rate
risk. Interest on financial instruments classified as floating rate is repriced either semi-annually 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 non-interest bearing and are therefore not subject to interest
rate risk.
US Dollar-Denominated Financial Assets and Financial Liabilities
Interest Rate
Restricted Cash
Floating rate loans:
MWMP Worldbank Loan
International Finance
Corporation-Subordinated
$1
5
$6
Floating rate
benchmark
+1.25% spread
LIBOR+IPA (1%2% of EBITDA)
Interest Rate
MWMP Worldbank Loan
CorporationSubordinated
On Demand
LIBOR+IPA (1%2% of EBITDA)
45 Years
More than
5 Years
Total
$5
5
$10
$15
$15
1
$1
$15
1
$16
December 31, 2013

Within
1 Year
23 Years
(In Millions)
$
$
45 Years
More than
5 Years
Total
$2
On Demand
$2
Floating rate
benchmark
+1.25% spread
December 31, 2014

Within
1 Year
23 Years
(In Millions)
$4
$
$4
$
$2
$2
1
$1
$2
1
$3
45 Years
More than
5 Years
Total
THB
THB
THB 23
THB 667
THB 800
THB 1,955
Thai Baht-Denominated Financial Assets and Financial Liabilities
Interest Rate
Floating rate loans Thanachart Term Loan
On Demand
THB 23
Minimum Lending
Rate less 1.5%
December 31, 2014

Within
1 Year
23 Years
(In Millions)
THB
THB
THB 106
THB 382
*SGVFS008665*
- 138 Peso-Denominated Financial Assets and Financial Liabilities

December 31, 2014

Investment in bonds and
corporate notes

PNB Loan
BDO Bank Loan
Interest Rate
On Demand
Within
1 Year
23 Years
(In Millions)
45 Years
More than
5 Years
Total
0.25%-6.0%
P
=3,104
P
=14,302
P
=
P
=
P
=
P
=17,406
2.13%-6%
P
=3,104
256
P
=14,558
206
P
=206
441
P
=441
1,035
P
=1,035
1,938
P
=19,344
P
=
P
=893
P
=
P
=
P
=
P
=893
P
=
25
P
=918
46
P
=46
56
P
=56
21
P
=21
148
P
=1,041
On Demand
Within
1 Year
23 Years
(In Millions)
45 Years
More than
5 Years
Total
0.05%-4.60%
10%-12%
P
=2,326
P
=9,068
265
P
=
133
P
=
100
P
=
355
=
P11,394
853
2.13%-6%
P
=2,326
P
=9,333
350
P
=483
394
P
=494
778
P
=1,133
1,522
=
P13,769
P
=
P
=892
P
=893
P
=
P
=
P
=1,785
17
12
29
P
=
79
P
=988
16
P
=921
33
=
P33
34
=
P34
162
P
=1,976
PDST-F + 0.5%
Margin
2% p.a +PDST-F
rate ;prevailing
market interest
rates
December 31, 2013

Interest Rate
Notes receivable
Investment in bonds and
corporate notes
PNB Loan
Peso-denominated Bank
Loan
BDO Bank Loan
PDST-F + 0.5%
Margin
Floating rate
benchmark+4.00
% (9.00%, June
3, 2009 to June 3,
2016)
2% p.a +PDST-F rate
;prevailing
market interest
rates
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 and US Dollar 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
in Basis Points
Effect on Income
Before Income Tax
(In Millions)
2014
2013
+50
50
+50
50
(22)
22
(10)
10
There were no outstanding derivative transactions as at December 31, 2014 and 2013.
*SGVFS008665*
- 139 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, 2014 and 2013,
the Companys foreign currency risk results primarily from movements of the Philippine Peso
against US Dollar, 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 borrowings:
Tollways segment. The segments exposure to foreign exchange currency risk relates mainly to
CICs dollar denominated Series 2010-1 Notes amounting to $20 million (P
=792 million) as at
December 31, 2014. 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).
Water Segment. The servicing of foreign currency-denominated 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 Regulatory Office.
Hospital Segment. 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 dollar-based revenue from its foreign patients to
mitigate this risk.
MPIC Group. The Companys foreign currency-denominated financial assets and liabilities as at
December 31 are:
Assets:
Restricted cash
Receivables
Liabilities:
Service concession fees
payable
Long-term debts
Net foreign currencydenominated liabilities
2013
Euro
US Dollar
2014
Thai Baht
$5
5
10
THB 23
23
$2
1
3
(95)
(33)
(128)
(1,955)
(1,955)
(854)
(854)
(92)
(22)
(114)
(1)
(1)
(1,472)
(1,472)
($118)
(THB 1,932)
(854)
($111)
(1)
(1,472)
US Dollar
JPY
(In Millions)
JPY
*SGVFS008665*
- 140 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
in Foreign Exchange Rates
Foreign
Exchange Rate
Effect on Income
Before Income Tax
(In Millions)
2014
US Dollar
THB
JPY
US Dollar
THB
JPY
+5%
+5%
+5%
-5%
-5%
-5%
44.72
1.36
0.37
44.72
1.36
0.37
(P
= 273)
(127)
(16)
273
127
16
Increase/Decrease
in Foreign Exchange Rates
Foreign
Exchange Rate
Effect on Income
Before Income Tax
(In Millions)
2013
US Dollar
Euro
JPY
US Dollar
Euro
JPY
+5%
+5%
+5%
-5%
-5%
-5%
44.40
60.82
0.42
44.40
60.82
0.42
(P
=246)
(3)
(31)
246
3
31
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.
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 agreement provides that MPIC shall ensure during the term of the loan that
its debt-to-equity ratio does not exceed 70:30, and its debt service coverage ratio (DSCR) is at a
minimum of 1.3x. To be able to declare dividends, MPIC shall achieve a DSCR of 1.5x. As at
December 31, 2014 and 2013, MPIC is in compliance with the required financial ratios and other
loan covenants.
Tollways Segment. Under the loan agreements, MNTC is required a Maintenance Debt Service
Coverage Ratio (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 MNTC 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.
*SGVFS008665*
- 141 MNTC also ensures that its debt to equity ratio is in line with the requirements of the BOI. BOI
requires the Company to comply with a 75:25 debt to equity ratio as proof of capital build-up.
MNTC is in compliance with the required financial ratios and other loan covenants.
In relation to CICs loan agreement relating to the Series 2010-1 Dollar-denominated 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 2014. Other than restrictions as to dividend distribution, CIC is not subject
to other externally imposed capital requirements.
Under 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. CIC is in compliance with the required financial
ratios and other loan covenants.
Water Segment. Maynilad closely manages its capital structure vis-a-vis 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. In 2014, Maynilad is in compliance
with the required financial ratios and other loan covenants.
MPIC Group. The Company manages its capital structure and adjust to 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, 2014 and 2013. The Company monitors capital
on the basis of debt-to-equity ratio. Debt-to-equity ratio is calculated as long-term debts over
equity. The Companys goal is to maintain a sustainable debt-to-equity ratio. The debt-to-equity
ratio as at December 31, 2014 and 2013 are:
2013
2014
(In Millions)
Long-term debts
Equity
Debt-to-equity ratio
P
= 61,067
129,572
47%
P51,048
=
113,280
45%
*SGVFS008665*
- 142 -
36. Financial Instruments Categories and Derivatives

Categories of Financial Instruments
The categories of the Companys financial assets and financial liabilities as at December 31, 2014
and 2013 are:
2014
Financial Assets
ASSETS
Short-term deposits
Restricted cash
Receivables - net
Derivative assets
AFS financial assets:
Investment in bonds
Investment in UITF
Investment in equity
Equity method investees (a)
LIABILITIES
Accounts payable and other
current liabilities (b)
Long-term debt
Deferred credits and other long-term
liabilities
(a)
Financial
Liabilities
Other
Financial
Liabilities
Total
FVPL
Loans and
Receivables
AFS
Financial
Assets
(In Millions)
P
=
P
=17,638
2,994
2,367
3,939
140
P
=
P
=
P
=17,638
2,994
2,367
3,939
140
P
=
756
653
P
=28,487
1,938
5,039
526
11,573
P
=19,076
P
=
1,938
5,039
526
12,329
653
P
=47,563
P
=
P
=
P
=
P
=11,320
7,279
7,771
61,067
P
=11,320
7,279
7,771
61,067
P
=
P
=
P
=
1,406
P
=88,844
1,406
P
=88,844
Financial
Liabilities
Other
Financial
Liabilities
Total
Includes advances to Beacon Electric and investment in preferred shares of Beacon Electric classified as AFS financial assets.
Excludes statutory payables
(b)
2013
Financial Assets
ASSETS
Short-term deposits
Restricted cash
Receivables - net
Derivative assets
AFS financial assets:
Investment in bonds
Investment in UITF
Investment in equity
Equity method investees (a)
FVPL
Loans and
Receivables
AFS
Financial
Assets
(In Thousands)
P
=
32
=
P11,493
3,627
1,827
4,342
294
P
=
P
=
=
P11,493
3,627
1,827
4,342
294
32
P
=32
756
163
=
P22,502
1,520
1,995
1,297
11,573
=
P16,385
P
=
1,520
1,995
1,297
12,329
163
=
P38,919
*SGVFS008665*
- 143 2013
Financial Assets
LIABILITIES
Accounts payable and other
current liabilities (b)
Long-term debt
Deferred credits and other long-term
liabilities
(a)
Financial
Liabilities
Other
Financial
Liabilities
Total
FVPL
Loans and
Receivables
AFS
Financial
Assets
(In Thousands)
P
=
P
=
P
=
=
P13,066
93
8,512
51,048
=
P13,066
93
8,512
51,048
P
=
P
=
P
=
1,321
=
P74,040
1,321
=
P74,040
Includes advances to Beacon Electric and investment in preferred shares of Beacon Electric classified as AFS financial assets.
Excludes statutory payables
(b)
Derivative Financial Instruments

The Company has no freestanding derivatives and no derivatives accounted for as cash flow
hedges as at December 31, 2014 and 2013. However, the Company has outstanding and
freestanding derivative financial instruments as at December 31, 2013 comprising of embedded
conversion option presented under noncurrent assets amounting to =
P32.0 million.
Embedded conversion option. As discussed in Note 8, the Company bifurcated the embedded
conversion option in its investment in Landcos preferred shares. The conversion option gives the
Company the right to convert the preferred shares into common shares of Landco at a conversion
price of =
P156.27, subject to the occurrence of certain contingent events. At initial recognition, the
Company assigned a value amounting to =
P31.7 million to the conversion option. This amount is
the residual after deducting from the value of the hybrid instrument the fair value of the host
instrument (preferred shares without any embedded derivative) calculated as the present value of
all future cash flows from the preferred shares discounted using credit adjusted interest rates
ranging from 8.5% to 11.8%.
The embedded conversion option has been carried at cost in the consolidated statement of
financial position since the underlying common shares of Landco are unquoted and there is no
reliable basis to determine subsequent fair value. As discussed in Note 33, the preferred shares
have been converted to common shares in 2014.
Fair Value Changes on Derivatives. The net changes in the fair values of all derivative
instruments for the years ended December 31, 2014 and 2013 are:
2014
2013
(In Millions)

Consolidation adjustment (see Note 4)
Conversion of preferred shares (see Notes 8 and 33)
P
=32
(32)
P
=
P
=257
(225)
P
=32
In 2012, =
P44.8 million and P
=3.2 million are included under Others account under Other
expenses of the consolidated statement of comprehensive income.
*SGVFS008665*
- 144 -
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).
As discussed in Notes 10 and 36, the unlisted shares of stock (except for NEPSCC shares) and the
embedded conversion option 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, 2014 and
2013, there were no financial instruments carried at fair value that were classified under Level 3.
2014
Assets measured at fair value

AFS Financial Assets (see Note 10):
Shares of stock
Unit Investment Trust Fund
Investment in bonds and treasury notes
Assets for which fair values are disclosed
Loans and Receivables:
Notes receivables (see Note 8)
Miscellaneous deposits (see Note 15)
Liabilities for which fair values are disclosed

Other financial liabilities:
Refundable deposits
(current and noncurrent)
Long-term debts (current and noncurrent)
Customer guaranty deposit
Carrying
Value
Level 1
Level 2
(In Millions)
Level 3
Total Fair
Value
P
=526
5,039
1,938
P
=7,503
P
=15
1,938
P
=1,953
P
=511
5,039
P
=5,550
P
=
P
=
P
=526
5,039
1,938
P
=7,503
P
=
206
P
=206
P
=
P
=
P
=
P
=
P
=
160
P
=160
P
=
160
P
=160
P
=8
P
=
P
=
P
=2
P
=2
7,771
61,067
804
P
=69,650
P
=
P
=
9,968
66,183
1,234
P
=77,387
9,968
66,183
1,234
P
=77,387
2013
Assets measured at fair value

AFS Financial Assets (see Note 10):
Shares of stock
Unit Investment Trust Fund
Investment in bonds and treasury notes
Investment in PMHI (see Note 11)
Assets for which fair values are disclosed

Loans and Receivables:
Notes receivables (see Note 8)
Miscellaneous deposits (see Note 15)
Carrying
Value
Level 1
Level 2
(In Millions)
Level 3
Total Fair
Value
P
=474
1,995
1,552
70
=
P4,091
P
=15
1,552
427
=
P1,994
P
=459
1,995
=
P2,454
P
=
P
=
P
=474
1,995
1,552
427
=
P4,448
P
=853
155
=
P1,008
P
=
P
=
P
=
P
=
=
P1,167
109
=
P1,276
=
P1,167
109
=
P1,276
*SGVFS008665*
- 145 2013
Liabilities for which fair values are disclosed

Other financial liabilities:
Refundable deposits
(current and noncurrent)
Long-term debts (current and noncurrent)
Customer guaranty deposit
Financial guarantee obligation
Carrying
Value
Level 1
Level 2
(In Millions)
Level 3
Total Fair
Value
P
=8
P
=
P
=
P
=1
P
=1
8,512
51,048
783
65
=
P60,416
P
=
P
=
16,296
56,987
1,149
150
=
P74,583
16,296
56,987
1,149
150
=
P74,583
During the year ended December 31, 2014 and 2013, there were no transfers between Level 1 and
Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurement.
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 short-term 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 short-term nature of the
transactions.
Investments in UITF. A UITF uses the mark-to-market 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 2014 and 2013, 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 Occupancy 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 2014 and 2013 is 7.01% and 7.01%, 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.
Financial Guarantee Obligation. Estimated fair value is based on the discounted value of future
cash flows using the prevailing peso interest rates that are specific to the tenor of the instruments
cash flows ranging from 1.0% to 6.0% in 2013.
Notes Receivable, Miscellaneous Deposits and Other Financial Assets. 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.
*SGVFS008665*
- 146 Long-term Debt. For both fixed rate and floating rate (repriceable every six months) US dollardenominated 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 2.1%
to 6.0% and 1.2% to 6.1% in 2014 and 2013, respectively.
38. Supplemental Cash Flow Information

The following table shows the Companys significant non-cash investing and financing activities
and corresponding transaction amounts for the years ended December 31, 2014, 2013 and 2012:
2014
2013
2012
(In Millions)
Non-cash investing and financing activities:

Payment of amount due to Beacon Electric by way
of offsetting against dividend receivable
Unpaid AFCSI subscription
Acquisition of CIC through subscription of
convertible notes (see Note 4)
Additions to service concession assets and
concession fees payable pertains to drawn
portion of MWSS loans
Unpaid consideration related to the acquisition of
PHI (see Note 4)
P
=4,450
203
=
P
=
P
6,772
1,143
1,075
317
For the year-ended December 31, 2014, the Company had a non-cash investing activity which was
not reflected in the consolidated statement of cash flows. As discussed in Note 11, MPIC acquired
56.35 million shares of Meralco at an aggregate consideration of =
P13.24 billion. Of the amount
due to Beacon Electric, a total of P
=4.45 billion was paid through offsetting with MPICs share of
dividends on common shares declared by Beacon Electric on June 24, 2014 and
November 17, 2014.
39. Events after the Reporting Period

Aside from those disclosed in Note 5 (Maynilads arbitration), Note 22 (MPICs dividend
declaration on February 26, 2015) and Note 33 (Notice of Award for the operations and
maintenance of the SCTEX), events occurring after the reporting period include:
Investment in CII Bridges and Roads Investment Joint Stock Company (CII B&R).
On January 14, 2015, MPTC entered into a Share Purchase Agreement with Ho Chi Minh City
Infrastructure Investment Joint Stock Company (CII) covering the purchase by MPTC from CII of
30 million shares of CII B&R at VND22,100 per share; and Bond Subscription Agreement with
CII covering the issuance by CII of and the subscription by MPTC to 1,020,000 bonds each with a
face value of VND1.0 million which are convertible to 56,666,667 shares of CII B&R that will
result in MPTC holding a minority equity interest equal to about 45% of the outstanding capital of
CII B&R (on a fully diluted basis) 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. Total acquisition cost for the shares and bonds is
VND1,955.0 billion (P
=4.0 billion). Closing of the transaction is expected in March 2015.
*SGVFS008665*
- 147 CII B&R (formerly Lu Gia Mechanical Electric Joint Stock Company) is a joint stock company
established and existing under the laws of Vietnam and listed in Ho Chi Minh City Stock
Exchange. The Company manufactures and trades lighting equipment, metal pillars and
mechanical parts for public lighting, traffic and decoration purposes.
Cebu-Cordova Bridge Project. In January 2015, MPTDC procured the 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 and completion date by 2020 assuming that awards and approvals are
secured by the first half of 2015.
MPTDC is proposing to form a joint venture vehicle with the City of Cebu and the Municipality of
Cordova for the design, construction, implementation, operation, and maintenance of the toll
bridge. The proposed joint venture will operate under a 35-year concession period, inclusive of
the preparatory work, design, and construction of the project.
MPIC Share Placement. 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 P
=4.90 per share. Closing of the Offer is 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
P
=8.9 billion. The proceeds from the placement and subscription transaction shall be 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.
Consequently, MPHIs economic interest in MPIC is reduced from 55.8% to 52.1%.
Meralco and Beacon Electrics Dividend Declaration. On February 23, 2015, the BOD of
Meralco approved the declaration of the final cash dividend of P
=8.49 per common share in favor
of the common stockholders of record as at March 23, 2015 with payment date of April 15, 2015.
The final cash dividends comprises of regular and special dividend of =
P3.66 and =
P4.83 per
common share, respectively.
On February 26, 2015, the BOD of Beacon Electric declared total dividends of P
=4.3 billion in
favor of the common shareholders of record as at February 26, 2015 with payment date of
February 27, 2015. MPICs share of the dividends declared by Beacon Electric amounting to
=
P2.2 billion is earmarked for offsetting against MPICs payable to Beacon Electric for the
acquisition of the Meralco shares as disclosed in Note 11.
*SGVFS008665*
- 148 -
40. Future Changes in Accounting Policies

The Company has not applied the following PFRS, Philippine Interpretations and amendments to
existing standards which are not yet effective as at December 31, 2014. Except for additional
disclosure requirements, adoption of the following standards are not expected to have any material
impact on the Companys financial position or performance:
PFRS 9, Financial Instruments Classification and Measurement (2010 version) PFRS 9

(2010 version) reflects the first phase on the replacement of PAS 39 and applies to the
classification and measurement of financial assets and liabilities as defined in PAS 39,
Financial Instruments: Recognition and Measurement. PFRS 9 requires all financial assets to
be measured at fair value at initial recognition. A debt financial asset may, if the fair value
option (FVO) is not invoked, be subsequently measured at amortized cost if it is held within a
business model that has the objective to hold the assets to collect the contractual cash flows
and its contractual terms give rise, on specified dates, to cash flows that are solely payments of
principal and interest on the principal outstanding. All other debt instruments are
subsequently measured at fair value through profit or loss. All equity financial assets are
measured at fair value either through other comprehensive income (OCI) or profit or loss.
Equity financial assets held for trading must be measured at fair value through profit or loss.
For FVO liabilities, the amount of change in the fair value of a liability that is attributable to
changes in credit risk must be presented in OCI. The remainder of the change in fair value is
presented in profit or loss, unless presentation of the fair value change in respect of the
liabilitys credit risk in OCI would create or enlarge an accounting mismatch in profit or loss.
All other PAS 39 classification and measurement requirements for financial liabilities have
been carried forward into PFRS 9, including the embedded derivative separation rules and the
criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on
the classification and measurement of the Groups financial assets, but will potentially have no
impact on the classification and measurement of financial liabilities.
PFRS 9 (2010 version) is effective for annual periods beginning on or after January 1, 2015.
This mandatory adoption date was moved to January 1, 2018 when the final version of
PFRS 9 was adopted by the Philippine Financial Reporting Standards Council (FRSC). Such
adoption, however, is still for approval by the Board of Accountancy (BOA).
Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate This
interpretation covers accounting for revenue and associated expenses by entities that
undertake the construction of real estate directly or through subcontractors. The SEC and the
FRSC have deferred the effectivity of this interpretation until the final Revenue standard is
issued by the IASB and an evaluation of the requirements of the final Revenue standard
against the practices of the Philippine real estate industry is completed. Adoption of the
interpretation when it becomes effective will not have any impact on the financial statements
of the Company.
The following new standards and amendments issued by the IASB were already adopted by the
FRSC but are still for approval by BOA:
Effective January 1, 2015
PAS 19, Employee Benefits Defined Benefit Plans: Employee Contributions (Amendments)
PAS 19 requires an entity to consider contributions from employees or third parties when
accounting for defined benefit plans. Where the contributions are linked to service, they
should be attributed to periods of service as a negative benefit. These amendments clarify
*SGVFS008665*
- 149 that, if the amount of the contributions is independent of the number of years of service, an
entity is permitted to recognize such contributions as a reduction in the service cost in the
period in which the service is rendered, instead of allocating the contributions to the periods of
service. This amendment is effective for annual periods beginning on or after January 1,
2015. It is not expected that this amendment would be relevant to the Company, since none of
the entities within the Company has defined benefit plans with contributions from employees
or third parties.
Annual Improvements to PFRSs (2010-2012 cycle). The Annual Improvements to PFRSs

(2010-2012 cycle) are effective for annual periods beginning on or after January 1, 2015 and
are not expected to have a material impact on the Company. They include:
o
PFRS 2, Share-based Payment Definition of Vesting Condition This improvement is

applied prospectively and clarifies various issues relating to the definitions of performance
and service conditions which are vesting conditions, including: a performance condition
must contain a service condition; a performance target must be met while the counterparty
is rendering service; a performance target may relate to the operations or activities of an
entity, or to those of another entity in the same group; a performance condition may be a
market or non-market condition; if the counterparty, regardless of the reason, ceases to
provide service during the vesting period, the service condition is not satisfied.
PFRS 3, Business Combinations Accounting for Contingent Consideration in a Business

Combination The amendment is applied prospectively for business combinations for
which the acquisition date is on or after July 1, 2014. It clarifies that a contingent
consideration that is not classified as equity is subsequently measured at fair value through
profit or loss whether or not it falls within the scope of PAS 39, Financial Instruments:
Recognition and Measurement (or PFRS 9, Financial Instruments, if early adopted). The
Company shall consider this amendment for future business combinations.
PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation of

the Total of the Reportable Segments' Assets to the Entity's Assets The amendments are
applied retrospectively and clarify that: an entity must disclose the judgments made by
management in applying the aggregation criteria in the standard, including a brief
description of operating segments that have been aggregated and the economic
characteristics (e.g., sales and gross margins) used to assess whether the segments are
'similar'; and the reconciliation of segment assets to total assets is only required to be
disclosed if the reconciliation is reported to the chief operating decision maker, similar to
the required disclosure for segment liabilities.
PAS 16, Property, Plant and Equipment and PAS 38, Intangible Assets Revaluation
Method Proportionate Restatement of Accumulated Depreciation and Amortization
The amendment is applied retrospectively and clarifies in PAS 16 and PAS 38 that the
asset may be revalued by reference to the observable data on either the gross or the net
carrying amount. In addition, the accumulated depreciation or amortization is the
difference between the gross and carrying amounts of the asset.
PAS 24, Related Party Disclosures Key Management Personnel The amendment is
applied retrospectively and clarifies that a management entity, which is an entity that
provides key management personnel services, is a related party subject to the related party
disclosures. In addition, an entity that uses a management entity is required to disclose the
expenses incurred for management services.
*SGVFS008665*
- 150

o
PFRS 3, Business Combinations - Scope Exceptions for Joint Arrangements The

amendment is applied prospectively and clarifies the following regarding the scope
exceptions within PFRS 3: joint arrangements, not just joint ventures, are outside the
scope of PFRS 3; and this scope exception applies only to the accounting in the financial
statements of the joint arrangement itself.
PFRS 13, Fair Value Measurement - Portfolio Exception The amendment is applied
prospectively and clarifies that the portfolio exception in PFRS 13 can be applied not only
to financial assets and financial liabilities, but also to other contracts within the scope of
PAS 39 (or PFRS 9, as applicable).
PAS 40, Investment Property The amendment is applied prospectively and clarifies that
PFRS 3, and not the description of ancillary services in PAS 40, is used to determine if the
transaction is the purchase of an asset or business combination. The description of
ancillary services in PAS 40 only differentiates between investment property and owneroccupied property (i.e., property, plant and equipment).
PAS 16, Property, Plant and Equipment, and PAS 38, Intangible Assets - Clarification of
Acceptable Methods of Depreciation and Amortization (Amendments) 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 revenue-based
method cannot be used to depreciate property, plant and equipment and may only be used in
very limited circumstances to amortize intangible assets. The amendments are effective
prospectively for annual periods beginning on or after January 1, 2016, with early adoption
permitted. These amendments are not expected to have any impact to the Company given that
the Company has not used a revenue-based method to depreciate its non-current assets.
PAS 16, Property, Plant and Equipment and PAS 41, Agriculture Bearer Plants
(Amendments) The amendments change the accounting requirements for biological assets
that meet the definition of bearer plants. Under the 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). The 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 retrospectively effective for annual periods
beginning on or after January 1, 2016, with early adoption permitted. These amendments are
not expected to have any impact to the Company as the Company does not have any bearer
plants.
*SGVFS008665*
- 151
PAS 27, Separate Financial Statements Equity Method in Separate Financial Statements
(Amendments) 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. For first-time adopters of
PFRS electing to use the equity method in its separate financial statements, they will be
required to apply this method from the date of transition to PFRS. The amendments are
effective for annual periods beginning on or after January 1, 2016, with early adoption
permitted. These amendments will not have any impact on the Companys consolidated
PFRS 10, Consolidated Financial Statements and PAS 28, Investments in Associates and Joint
Ventures Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture These amendments address an acknowledged inconsistency between the
requirements in PFRS 10 and those in PAS 28 (2011) in dealing with the sale or contribution
of assets between an investor and its associate or joint venture. The amendments require that
a full gain or loss is recognized when a transaction involves a business (whether it is housed in
a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets
that do not constitute a business, even if these assets are housed in a subsidiary. These
amendments are effective from annual periods beginning on or after January 1, 2016.
PFRS 11, Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations
(Amendments) 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 and are prospectively
effective for annual periods beginning on or after January 1, 2016, with early adoption
permitted. These amendments are not expected to have any impact to the Company.
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
income. The standard requires disclosures on the nature of, and risks associated with, the
entitys rate-regulation and the effects of that rate-regulation on its financial statements.
PFRS 14 is effective for annual periods beginning on or after January 1, 2016. Since the
Group is an existing PFRS preparer, this standard would not apply.
*SGVFS008665*
- 152

o
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. However, comparative disclosures are not required to be provided
for any period beginning before the annual period in which the entity first applies the
amendments.
PFRS 7 - Applicability of the Amendments to PFRS 7 to Condensed Interim Financial

Statements This 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 This
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.
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).
PFRS 9, Financial Instruments Hedge Accounting and amendments to PFRS 9, PFRS 7 and
PAS 39 (2013 version) PFRS 9 (2013 version) already includes the third phase of the
project to replace PAS 39 which pertains to hedge accounting. This version of PFRS 9
replaces the rules-based hedge accounting model of PAS 39 with a more principles-based
approach. Changes include replacing the rules-based hedge effectiveness test with an
objectives-based test that focuses on the economic relationship between the hedged item and
the hedging instrument, and the effect of credit risk on that economic relationship; allowing
risk components to be designated as the hedged item, not only for financial items but also for
*SGVFS008665*
- 153 non-financial items, provided that the risk component is separately identifiable and reliably
measurable; and allowing the time value of an option, the forward element of a forward
contract and any foreign currency basis spread to be excluded from the designation of a
derivative instrument as the hedging instrument and accounted for as costs of hedging.
PFRS 9 also requires more extensive disclosures for hedge accounting.
PFRS 9 (2013 version) has no mandatory effective date. The mandatory effective date of
January 1, 2018 was eventually set when the final version of PFRS 9 was adopted by the
FRSC. The adoption of the final version of PFRS 9, however, is still for approval by BOA.
The Company is currently assessing the impact of adopting this standard.
Issued by the IASB but not yet been adopted by the FRSC
IFRS 15 Revenue from Contracts with Customers IFRS 15 was issued in May 2014 and
establishes a new five-step model that will apply to revenue arising from contracts with
customers. Under IFRS 15 revenue is recognised 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 IFRS 15 provide a more structured approach to measuring and
recognising revenue. The new revenue standard is applicable to all entities and will supersede
all current revenue recognition requirements under IFRS. Either a full or modified
retrospective application is required for annual periods beginning on or after January 1, 2017
with early adoption permitted. The Company is currently assessing the impact of IFRS 15 and
plans to adopt the new standard on the required effective date once adopted locally.
*SGVFS008665*
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, 2014
PHILIPPINE FINANCIAL REPORTING STANDARDS

AND INTERPRETATIONS
Effective as at December 31, 2014
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
(Revised)
First-time Adoption of Philippine Financial Reporting

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 Sharebased Payment Transactions
Amendments to PFRS 2: Definition of Vesting Condition
PFRS 3
(Revised)
Business Combinations
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
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
PFRS 7
Financial Instruments: Disclosures

Amendments to PAS 39 and PFRS 7: Reclassification of
Financial Assets
Adopted
Not
Not
Not
Early
Adopted Applicable Adopted
SCHEDULE II
AND INTERPRETATIONS
Financial Assets - Effective Date and Transition
Amendments to PFRS 7: Improving Disclosures about
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
PFRS 9*
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
Philippine Accounting Standards

PAS 1
(Revised)
Presentation of Financial Statements

Amendment to PAS 1: Capital Disclosures
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
Adopted
Not
Not
Not
Early
SCHEDULE II
AND INTERPRETATIONS
PAS 2
Inventories
PAS 7
Statement of Cash Flows
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
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
(Revised)
Borrowing Costs
PAS 24
(Revised)
Related Party Disclosures

Amendments to PAS 24: Key Management Personnel
PAS 26
Accounting and Reporting by Retirement Benefit Plans
PAS 27
(Amended)*
Separate Financial Statements

Amendments to PAS 27: Investment Entities
Amendments to PAS 27: Equity Method in Separate
Financial Statements
PAS 28
(Amended)*
Investments in Associates and Joint Ventures

Amendments to PFRS 10: Sale or Contribution of Assets
Between an Investor and its Associate or Joint Venture
Adopted
Not
Not
Not
Early
SCHEDULE II
AND INTERPRETATIONS
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
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
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
PAS 41
Agriculture
Adopted
Not
Not
Not
Early
SCHEDULE II
AND INTERPRETATIONS
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
IFRIC 21
Levies
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
Adopted
Not
Not
Not
Early
SCHEDULE II
AND INTERPRETATIONS
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

Annual improvements to PFRSs 2011 2013 Cycle
Adopted
Not
Not
Not
Early
SCHEDULE II
SUPPLEMENTARY SCHEDULE REQUIRED
UNDER SRC RULE 68, AS AMENDED (2011)
Financial Soundness Indicators
Financial Ratios
a) Current Ratio
Formula
December 31,
2014
December 31,
2013
Total Current Assets

Total Current Liabilities
1.22
1.10
Net Profit After Tax (NPAT) +

Depreciation and Amortization
Total Liabilities
0.16
0.17
c) Total Liabilities-to-Equity Ratio
Total Liabilities
Total Stockholders' Equity
0.81
0.77
d) Long-term Debt-to-Equity Ratio
Long-term Debt
0.47
0.45
e) Asset to Equity Ratio
Total Assets
1.81
1.77
Earnings before Interest and Taxes

Net Interest Expense
4.52
4.41
NPAT
Net Revenues
37.17%
37.18%
h) Return on Asset
NPAT + Interest expense (net of tax)

Average Total Assets
7.55%
8.07%
i) Return on Equity
NPAT
Average Total Stockholders Equity
10.36%
11.06%
b) Solvency Ratio
f) Interest Rate Coverage Ratio
g) Net Profit Margin
SCHEDULE III
RECONCILIATION OF RETAINED EARNINGS

AVAILABLE FOR DIVIDEND DECLARATION
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
=8,773.5
Add: Net income based on the face of Audited
10,164.6
Financial Statements
Less: Unrealized gain as a result of transaction accounted for under

PFRS, net of tax (gain from accounting dilution on interest in
subsidiary)
Net income actually earned during the period
Less: Dividend declarations during the period
Total retained earnings end, available for dividend declaration
(4,200.9)
5,963.7
(2,297.8)
P
=12,439.4
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
Name of issuing entity and

association of each issue
Available-for-sale Financial
Assets
Investment in Preferred shares of
Beacon Electric
Investments in shares of stock:
Citra Metro Manila Tollways
Corporation
Bonifacio Land Corporation
Pacific Global One Aviation
Company, Inc.
Subic Water Sewerage Co.,
Inc.
Manila Polo Club
Palms Country Club
Alabang Country Club
Pico de Loro Club
Investment in Unit Investment
Trust Fund
Investments in quoted treasury
bonds and notes
Investments in quoted corporate
bonds
Number of shares
or principal
amount of bonds
and notes
Amount shown
Value based on
in the statement
market quotation at
of financial
end of reporting
position
period
Income
received and
accrued
1,083,259,828 shares
=11,573
P
=
P
=405
P
1,379,674 shares
316
66
339,772 shares
37,500,000 shares
47
38
915,580 shares
111
1 share
1 share
1 share
1 share
=4,980
P
12
1
2
1
5,039
12
1
2
1
5,039
=1,514
P
1,496
1,496
39
=450
P
442
442
11
P
=19,078
P
=6,993
P
=521
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)
Name and Designation of
debtor
Balance at
beginning
of period
Additions
Amounts
collected
Reversal
Current
Noncurrent
Balance
at end of
period
(In Millions)
Receivables:
Advances to officers and
employees
Due from related parties:
Tollways Management
Corporation
Landco Pacific Corporation
First Pacific Company, Ltd.
Lucena Land Corporation
Beacon Electric Assets
Holdings, Inc.
Others
=80
P
=73
P
(P
=80)
=
P
=73
P
=
P
=73
P
172
13
88
7
2
56
14
(57)
(98)
(2)
(65)
106
13
4
7
106
13
4
7
4
8
P
=374
1
6
P
=150
(9)
(P
=246)
(P
=65)
5
5
P
=213
P
=
5
5
P
=213
Schedule C. Amounts Receivable from Related Parties which are eliminated during the consolidation of
financial statements
Name and Designation of
debtor
Metro Pacific Investments
Corporation (MPIC):
Metropac Water
Investments Corporation
Metro Pacific Hospital
Holding, Inc.
Colinas Verdes Hospital
Managers Corporation
East Manila Hospital
Managers Corporation
Fragrant Cedar Holdings,
Inc.
Metro Pacific Light Rail
Corporation
Asian Hospital, Inc.
Bumrungrad International
Philippines, Inc.
Neo Oracle Holdings, Inc.:
MPIC
Metro Pacific Tollways
Corporation
Balance at
beginning
of period
Addition
s
Current
Noncurren
t
Balance
at end of
period
=102
P
=8
P
(P
=110)
=
P
=
P
=
P
=
P
51
(48)
22
23
(33)
12
12
20
30
(40)
10
10
(8)
5
2
1
14
(6)
(12)
(2)
359
359
359
P
=571
P
=80
(P
=259)
P
=
P
=392
P
=
P
=392
Amounts
collected
Amounts
written
off
(In Millions)
SCHEDULE IV
Schedule D. Intangible Assets Other Assets
Description
Beginning
balance
Additions
at cost*
Charged to
cost and
expenses
Charged
to other
accounts
Other charges
additions
(deductions)*
Ending
balance
(In Millions)
Service Concession Assets:
Cost
Carrying Value
P109,784
=
(15,244)
94,540
=6,678
P
6,678
=
P
(2,958)
(2,958)
=
P
=
P
P116,462
=
(18,202)
98,260
Property Use Rights:

Cost
Carrying Value
748
(99)
649
(41)
(41)
748
(140)
608
Software Cost**:
Cost
Carrying Value
113
(40)
73
21
21
(27)
(27)
134
(67)
67
100
100
18,308
P
=113,570
P
=6,799
(P
=3,026)
P
=
P
=
18,308
P
=117,343
Basketball franchise**
Goodwill
*Note for Additions at cost and other charges additions (deductions)

Additions to Service Concession Assets pertains to toll service concession asset included civil works construction
on MNTC's Segments 9 and 10 and CAVITEX's Modified Zapote Interchange and fixed operating equipment
design, supply and installation for the toll collection system migration. Additions in 2014 also include preconstruction costs of Segment 8.2 of Phase II of the NLEX and capitalized borrowing costs. Additions to the
water service concession assets for substantially relate to cost of rehabilitation, additional constructions and to the
additional concession fees pertaining to the drawn portion of the MWSS loans relating to new projects.
Basketball franchise represents cost of MPTCs Philippine Basketball Association (PBA) franchise named
NLEX Road Warriors.
**Included under Other noncurrent assets in the consolidated statement of financial position.
SCHEDULE IV
Schedule E. Long Term Debt
Title of Issue and type of

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet
Interest rates, amount or

number of periodic
installments, and maturity
dates
(In Millions)
Metro Pacific Tollways Corporation and subsidiaries,
Manila North Tollways Corporation and Cavitex Infrastructure Corporation
Philippine National Bank
=2,100
P
=891
P
(PNB) Loan
Series A Corporate Notes

Facility Agreement:
Series A-5 Notes
Banco De Oro
Unibank, Inc. (BDO)
Leasing & Finance
Inc.
Bank of Philippine
Islands (BPI)
Series A-7 Notes

BPI
Robinsons Bank
Corp. (RBC)
BDO Capital &
Investment Corp.
PNB
The Insular Life
Assurance Co., Ltd
Security Bank
Corporation (SBC)
Series A-10 Notes
BDO Capital &
Investments
Corporation
The Insular Life
Assurance Co Ltd.
SBC
Insular Life Assurance

Company, Ltd.
=
P
Interest rate: Subject to

floating rate based on 6month PDST-F + 0.50%
Payment terms: 7 years
balloon-type semi-annual
repayment starting June
2011, 85% payable on the
last 4 semi-annual periods
(June 2014 to December
2015)

6.5346% fixed interest per
annum
bullet-like repayment,
minimal annual
amortizations aggregating
4% between March 2012 to
March 2015 and 96% in
April 2016
annum
minimal annual
April 2018
1,000
959
4,210
27
4,002
1,000
944
500
497

annum
minimal annual
April 2021
annum
SCHEDULE IV

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet

number of periodic
dates
(In Millions)
Philippine American Life

and General Insurance
Company
=500
P
=
P
=496
P
200
198
Philippine American Life

and General Insurance
Company
1,000
992
SunLife of Canada Phils.,

Inc.
800
794
6,100
160
5,837
7,232
(or US $160)
82
711
=4,400
P
=
P
=4,314
P
Insular Life Assurance

Company, Ltd.
BDO
Rizal Commercial
Banking Corporation
(RCBC)
Bank of New York Mellon

(Series 2010-1 Note Dollar denominated)
BDO Capital & Investment

Corporation
bullet-like repayment with

principal payable in
December 2021
annum
December 2026
Interest rate: 5.0303% fixed
interest per annum
November 2023
interest per annum
December 2028
interest per annum
October 2023
Interest rate:
(a) 6.50% fixed interest per
annum from December
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
Interest rate: Subject to 12%
fixed interest per annum
quarterly repayment
starting March 2013 to
September 2022
5.07% interest per annum
Payment terms:7 years
SCHEDULE IV

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet

number of periodic
dates
(In Millions)
BDO Capital & Investment
Corporation
Banco De Oro Bank loan
=2,600
P
=
P
=2,573
P
3,250
45
3,137
=1,692
P
=16,922
P
4,963
6,104
(or US $ 137.5)
624
=1,008
P
=147
P
=288
P
Maynilad Water Holding Company, Inc. and subsidiaries,

Maynilad Water Services, Inc. and Philippine Hydro Inc.
Development Bank of
=21,152
P
the Philippines
Landbank of the
Philippines
Chinabank
SBC
BPI
BDO Leasing & Finance,
Inc.
BDO Unibank, Inc.
5,000
BDO Unibank, Inc. Loan
Landbank of the
Philippines

Corporation Term loan
principal payable in 2021

5.50% interest per annum
Payment terms:10 years
principal payable in 2024
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

interest per annum for the
first 5 years, for the
remaining 5 years, higher
of: (i) benchmark rate plus
0.75% per annum; or (ii)
5.75% per annum
semi-annual installments
until March 2023
Interest rate: Fixed rate per
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
Interest rate: Floating
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
Interest rate: Fixed rate

note, subject to 8.5% per
annum
SCHEDULE IV

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet

number of periodic
dates
(In Millions)
Corporation Term loan
=252
P
=36
P
=72
P
Deutsche Investitions
Entwicklungsgeselleschaft
Term Loan
476
71
136
Deutsche Investitions
Entwicklungsgeselleschaft
Term Loan
119
17
34
45
(or US $ 1)
45
6,480
65
6,318
=30
P
=4
P
=17
P
Corporation Subordinated Term Loan

BDO Omnibus Notes
Facility and Security
Agreement
Riverside Medical Center, Inc.

BDO Bank Loan
Payment terms: Payable on

equal semi-annual
installments until
November 2017
annum
Payment terms: Payable on
equal semi-annual
installments until
November 2017
annum
Payment terms: Semiannual interest and
principal payments until
September 2017
annum
Payment terms: Semiannual interest and
principal payments until
September 2017
Interest rate: LIBOR + IPA
(1% to 2% of EBITDA)
Payment terms: Lump sum
payable on April 2017

rate interest per annum, to
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
Interest rate: Floating Rate

Note
SCHEDULE IV

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet

number of periodic
dates
(In Millions)
quarterly installments until
November 2019
Note (2% plus 3M PDSTF)
May 2016
BDO Bank Loan
=36
P
=6
P
=3
P
BDO Bank Loan
60
47
BDO Short-term facility
25
21
12
30
26
Colinas Verdes Hospital Managers Corporation

65
65

interest
Payment terms: Three
months facilities payable in
January 2015 and February
2015
East Manila Hospital Managers Corporation

Security Bank Corporation
250
- Short term facility
90

4.25% fixed rate
Payment terms: 1 year due
in March 2015
AIF Toll Road Holding (Thailand) Limited

Thanachart Bank Public
THB 2,100
Company Limited
=144
P
=2,515
P

floating interest rate of
Minimum Lending Rate
minus 1.50% per annum
Payment terms: Semiannual 15 installments with
final installment due
November 2021

Note (2% plus 3M PDSTF)
September 2018
Note
payable in March 2021
Note
payable in July 2019
Note
payable in September 2021
SCHEDULE IV

obligation
Amount
authorized by
indenture
Amount shown
under caption
Current portion
of long-term
debt in related
balance sheet
Amount shown
under caption
Long-Term
Debt in related
balance sheet
(In Millions)
TOTAL
P
=3,573
P
=57,494

number of periodic
dates
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
Not Applicable. The Company has no related party indebtedness as at December 31, 2014.
Schedule G. Guarantees of Securities of Other Issuers
Name of issuing entity of

securities guaranteed by
the Company for which
this statement is filed
Title of issue of each class of

securities guaranteed
Total amount
guaranteed and
outstanding
Amount owned
by person for
which statement
is files
Nature of
guarantee
Not Applicable. There are no guarantees made by the Company as at December 31, 2014.
Schedule H. Capital Stock
Title of Issue
Common
Preferred
Class A =0.01 par value
P
Class B =1.00 par value
P
Number of
shares
authorized
Number of
shares issued
and
outstanding
as shown
under related
balance sheet
caption
28,500,000,000
26,046,270,752
5,000,000,000
1,500,000,000
Number of
shares
reserved for
options,
warrants,
conversion
and other
rights
Number of
shares held
by related
parties
Directors,
officers
and
employees
143,338,000
14,522,948,170
52,622,609
11,470,591,574
5,000,000,000
5,000,000,000
Others
SCHEDULE V
MPIC GROUP STRUCTURE

as of December 31, 2014
Enterprise Investments
Holding, Inc. (1)
First Pacific International

Limited
13.3%
Metro Pacific Holdings,
Inc.
60.0%
100.0%
Metro Pacific
Infrastructure Corporation
Intalink B.V.
26.7%
60.0%
Metro Pacific Resource,
Inc.
60.0%
Two Rivers Holdings Corp.
55.8%

99.9%
Corporation
50.0%
Beacon Electric Asset
Holdings Inc
51.3%
Maynilad Water
Holding Company,
Inc. (2)
.
5.2%
100.0%
44.96%
Cavitex Infrastructure
Corporation (3)
Philippine Hydro, Inc.
100%
100%
Amayi Water
Solutions Inc.
MetroPac Water
Investments Corp.
39.0%
Manila Water
Consortium Inc.
Metro Pacific Hospital

Holdings, Inc. (8)
Manila Electric Co
100.0%
100.0% Fragrant Cedar Holdings

Inc
75.6%
58.1%
Metro Pacific Light

Rail Corporation
Manila North Tollways

Corp (4)
100.0%
50.0%
Tollways Management
Corp
57.0%
Metro Strategic Infra

Holdings Inc. (5)
100.0%
Collared Wren Holdings,

Inc.
Light Rail Manila Holdings

Inc. (9)
70.0%
20.0%
100.0%
Light Rail Manila Holdings

2 Inc. (9)
51.0%
50.0%
100.0%
MPCALA Holdings, Inc
24.5%
24.5%
Larkwing Holdings, Inc.
50.0%
50.0%
20.0%
Colinas Verdes Hospital

Managers Corp.
Light Rail Manila Corporation
50.0%
Asian Hospital Inc.
Operator of Cardinal Santos

Medical Center
51.0%
100.0%
Metro Global Green

Waste, Inc.
33.3%
First Gen Northern

Energy Corp
58.8%
MPIC-JGS Airport
Holdings, Inc.
96.6%
Neo Oracle Holdings,

Inc. (11)
27.5%
46.0%
51.0%
70.0%
Bumrungrad
International Phils.

Development Corp.
100.0%
100%
85.6%
5.0%
100.0%
92.9%
Maynilad Water
Services, Inc.
50.0%
Porrovia Corporation
Colinas Healthcare,
Inc.
De Los Santos
Medical Center, Inc.
The Megaclinic, Inc.
100%
First Pacific Bancshares

Philippines, Inc.
100%
Metro Pacific Management

Services, Inc.
50.0%
First Pacific Realty Partners

Corporation
(10)
Automated Fare
Collection Services,
Easytrip Services
Corporation (6)
51.0%
Central Luzon
Doctors' Hospital
operator of Our Lady of Lourdes

Hospital
57.5%
Luzon Tollways
Corporation
100.0% Metro Tagaytay Land Co.,

Inc
100.0% East Manila Hospital

Managers Corp.
Riverside Medical
Center Inc.
13.4%
62.0%
Costa de Madera
Corporation
49.0%
Metro Pacific Land

Holdings, Inc.
40.0%
Metro Strategic Infra

Holdings Inc. (5)
100%
Pacific Plaza Towers

Management Services, Inc.
100%
Philippine International
Paper Corporation
100%
Pollux Realty
Development Corporation
dormant
MPIC Infrastructure
Holdings Limited
100.0%
100.0%
33.3%
FPM Infrastructure
Holdings Limited (7)
AIF Toll Roads Holdings

(Thailand) Limited
29.5%
100.0%
Medical Doctors, Inc.

Operator of Makati Medical
Center
100.0%
Don Muang Tollway Public

Company Ltd (Thailand)
Riverside College Inc.
60.0%
31.2%
Prime Media Holdings,
Inc.
Computerized Imaging
Institute, Inc.
34.8% Davao Doctors Hospital

(Clinica Hilario) Inc.
NOTES:
1 First Pacific Company Limited holds 40% equity interest in EIH
2 Formerly DMCI-MPIC Water Co. Inc.
3 By virtue of the Management Letter-Agreement, MPTC acquired control over CIC effective Jan 2, 2013
4 4.6% is owned through 46% ownership in Egis Investment Partners Philippines Inc.
5 Effective interest of 95.55% in MSIHI through 57% owned by MPTC and 40% owned by NOHI
6 ESC is a Joint venture between MPTDC and EGIS. Equity interest of 50% plus one share.
7 Effective interest of 100% in AIF Toll Roads through intermediate wholly owned BVI companies
8 Formerly Neptune Stroika Holdings Inc.; 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.
9 Controlling interest in LRMHI and LRMH2. Equity interest of 50% plus one share.
10 Formerly Light Rail Manila Corporation
11 End of corporate life (under liquidation)
MPIC's Operating Segments are as follows:
Water Utilities
Toll Operations
Power Distributions
Healthcare
Rail
Others
100.0%
Davao Doctors
College, Inc.
100.0%
Allied Professional
Development Corp.
30.0%
Davao Doctors
Oncology Center Inc.
65.0%
Metro Asia Link Holdings,

Inc.
Filed to SEC Non-Operation
EXHIBIT III
ANNUAL CORPORATE
GOVERNANCE REPORT
SECURITIES AND EXCHANGE COMMISSION

SEC FORM ACGR
ANNUAL CORPORATE GOVERNANCE REPORT
1. Report is Filed for the Year 2014

2. Exact Name of Registrant as Specified in its Charter METRO PACIFIC INVESTMENTS CORPORATION
3. 10th Floor, MGO BUILDING, LEGAZPI CORNER DELA ROSA STREETS,
LEGASPI VILLAGE, MAKATI CITY, PHILIPINES
Address of Principal Office
4. SEC Identification Number CS200604494
5. Industry Classification Code (SEC Use Only)

6. BIR Tax Identification Number 244-520-457-000
7. (632) 888-0888
Issuers Telephone number, including area code
8. N/A
Former name or former address, if changed from the last report
1200
Postal Code
TABLE OF CONTENTS
A.
BOARD MATTERS ........................................................................................................................................1

1. BOARD OF DIRECTORS..............................................................................................................................1
a. COMPOSITION OF THE BOARD ..........................................................................................................1
b. DIRECTORSHIP IN OTHER COMPANIES ..............................................................................................4
c. SHAREHOLDING IN THE COMPANY ....................................................................................................9
2. CHAIRMAN AND CEO............................................................................................................................. 10
3. OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS................................................ 12
4. CHANGES IN THE BOARD OF DIRECTORS ............................................................................................. 18
5. ORIENTATION AND EDUCATION PROGRAM ......................................................................................... 49
B.
CODE OF BUSINESS CONDUCT & ETHICS ................................................................................................. 57

1. POLICIES................................................................................................................................................. 57
2. DISSEMINATION OF CODE ..................................................................................................................... 59
3. COMPLIANCE WITH CODE ..................................................................................................................... 59
4. RELATED PARTY TRANSACTIONS ........................................................................................................... 60
a. Policies and Procedures .................................................................................................................. 60
b. Conflict of Interest .......................................................................................................................... 61
5. FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS...................................................................... 63
6. ALTERNATIVE DISPUTE RESOLUTION .................................................................................................... 64
C.
BOARD MEETINGS & ATTENDANCE ......................................................................................................... 64

1. SCHEDULE OF MEETINGS ...................................................................................................................... 64
2. DETAILS OF ATTENDANCE OF DIRECTORS ............................................................................................. 65
3. SEPARATE MEETINGS OF NON-EXECUTIVE DIRECTORS ........................................................................ 65

4. ACCESS TO INFORMATION .................................................................................................................... 66
5. EXTERNAL ADVICE ................................................................................................................................. 69
6. CHANGE/S IN EXISTING POLICIES .......................................................................................................... 70
D.
REMUNERATION MATTERS ...................................................................................................................... 70

1. REMUNERATION PROCESS .................................................................................................................... 70
2. REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS ................................................................ 71
3. AGGREGATE REMUNERATION............................................................................................................... 72
4. STOCK RIGHTS, OPTIONS AND WARRANTS ........................................................................................... 73
5. REMUNERATION OF MANAGEMENT .................................................................................................... 74
E.
BOARD COMMITTEES............................................................................................................................... 75
1. NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES .............................................................. 75
2. COMMITTEE MEMBERS ......................................................................................................................... 81
3. CHANGES IN COMMITTEE MEMBERS.................................................................................................... 84
4. WORK DONE AND ISSUES ADDRESSED ................................................................................................. 85
5. COMMITTEE PROGRAM ........................................................................................................................ 87
F.
RISK MANAGEMENT SYSTEM ................................................................................................................... 88

1. STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM ...................................................... 88
2. RISK POLICY ........................................................................................................................................... 89
3. CONTROL SYSTEM SET UP ..................................................................................................................... 95
G.
INTERNAL AUDIT AND CONTROL ............................................................................................................. 98

1. STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM ...................................................... 98
2. INTERNAL AUDIT.................................................................................................................................... 99
a. Role, Scope and Internal Audit Function ........................................................................................ 99

b. Appointment/Removal of Internal Auditor .................................................................................. 100
c. Reporting Relationship with the Audit Committee ....................................................................... 100
d. Resignation, Re-Assignment and Reasons .................................................................................... 101
e. Progress Against Plans, Issues, Findings and Examination Trends ............................................... 101
f. Audit Control Policies and Procedures ......................................................................................... 101
g. Mechanism and Safeguards .......................................................................................................... 102
H.
ROLE OF STAKEHOLDERS ....................................................................................................................... 103
I.
DISCLOSURE AND TRANSPARENCY ........................................................................................................ 112

1. Ownership Structure ........................................................................................................................... 113
2. Annual Report ..................................................................................................................................... 114
3. External Auditors fee .......................................................................................................................... 114
4. Medium of Communication ................................................................................................................ 114
5. Release of Audited Financial Report ................................................................................................... 115
6. Company Website ............................................................................................................................... 115
7. Disclosure of RPT ................................................................................................................................. 116
J.
RIGHTS OF STOCKHOLDERS ................................................................................................................... 117

1. Right to participate effectively in and vote in Annual/Special Stockholders Meetings ..................... 117
2. Treatment of Minority Stockholders ................................................................................................... 124
K.
INVESTORS RELATIONS PROGRAM ........................................................................................................ 125
L.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES ................................................................................ 127
M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL......................................................................... 128

N.
INTERNAL BREACHES AND SANCTIONS ................................................................................................. 129
A. BOARD MATTERS
1.
BOARD OF DIRECTORS
Number of Directors per Articles of Incorporation
Fifteen (15)
Actual number of Directors for the year
Fifteen (15)
a.
COMPOSITION OF THE BOARD

Please see below the updated composition of the Board of Directors of the Corporation:
Directors Name
Chairman, NonExecutive Director
Jose Ma. K. Lim
Executive Director,
President and CEO
David J. Nicol
Executive Director,
Chief Financial Officer
Ray C. Espinosa
Non-Executive Director
Robert C. Nicholson
Antonio A. Picazo
Type [Executive (ED),

Non-Executive (NED)
or Independent
Director (ID)]
Executive Director
and Corporate
Secretary
Date first elected
Elected when
(Annual /
Special
Meeting)
No. of years
served as
director
May 30, 2014
AGM
March 2006
May 30, 2014
AGM
Metro Pacific Holdings Inc.

(MPHI)
May 2010
May 30, 2014
AGM

(MPHI)
November 2009
May 30, 2014
AGM

(MPHI)
June 2009
May 30, 2014
AGM

(MPHI)
November 2009
May 30, 2014
AGM

(MPHI)
March 2006
May 30, 2014
AGM

(MPHI)
March 2006
May 30, 2014
AGM

(MPHI)
July 2006
May 30, 2014
AGM
If nominee,
identify the
principal
Nominator in the last election

(if ID, state the relationship
with the nominator)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)

(MPHI)
March 2006

(MPHI)
Date last elected (if ID,

state the number of
years served as ID)1
Reckoned from the election immediately following May 30, 2014 AGM.
Edward A. Tortorici
Executive Director and

Executive Advisor
Victorico P. Vargas
Washington Z. SyCip
Independent Director
Edward S. Go
Lydia B. Echauz
Chief Justice Artemio V.

Panganiban
Metro Pacific
Holdings Inc.
(MPHI)
Metro Pacific
Holdings Inc.
(MPHI)

(MPHI)
November 2009
May 30, 2014
AGM

(MPHI)
May 2011
May 30, 2014
AGM
Flordeliza Anibigno (Registered

Stockholder); Relationship None
August 2011
May 30, 2014
AGM
July 2006
May 30, 2014
AGM
November 2009
May 30, 2014
AGM
August 2007
May 30, 2014
AGM
1) Provide a brief summary of the corporate governance policy that the board of directors has adopted. Please emphasize the policy/ies relative to the treatment of all
shareholders, respect for the rights of minority shareholders and of other stakeholders, disclosure duties, and board responsibilities.
The Board adheres to the Corporations Revised Manual of Corporate Governance which provides guidance to the Board in executing their duties and responsibilities in
accordance with the Securities and Exchange Commissions (SEC) Revised Manual of Corporate Governance and best practices. The Corporations Revised Manual of
Corporate Governance includes provisions on the following items:
(i) Board Governance
The Board Governance Section discusses the composition of the Board; the guidelines on multiple board seats; the duties and responsibilities of the Chairman and the
Chief Executive Officer; the rules on the qualifications and disqualifications of the directors; the responsibilities, duties and functions of the Board; the Internal Control
responsibilities of the Board; the Board meetings and quorum requirement; the remuneration of directors and officers; the description of the different board
committees; and the functions of the board secretary and the compliance officer.
(ii) Adequate and Timely Information
This section of the Revised Manual of Corporate Governance tackles the Managements provision to the Board of complete, adequate and timely information about the
matters to be taken in their meetings and for them to be able to properly fulfill their duties and responsibilities. This section also states that the members of the Board,
either individually or as a Board, and in furtherance of their duties and responsibilities, should have access to independent professional advice at the corporations
expense.
(iii) Accountability and Audit

The Board is primarily accountable to the stockholders and it should provide them with a balanced and comprehensible assessment of the corporation's performance,
position and prospects on a quarterly basis, including interim and other reports that could adversely affect its business, as well as reports to regulators that are required
by law.
The Board, after consultations with the Audit and Risk Management Committee, shall recommend to the stockholders an external auditor duly accredited by the
Commission who shall undertake an independent audit of the corporation, and shall provide an objective assurance on the manner by which the financial statements
shall be prepared and presented to the stockholders.
(iv) Stockholders Rights and Protection of Minority Stockholders Interests
The Board shall respect the rights of the stockholders as provided for in the Corporation Code, namely:
1) Right to vote on all matters that require their consent or approval;
2) Pre-emptive right to all stock issuances of the corporation;
3) Right to inspect corporate books and records;
4) Right to information;
5) Right to dividends; and
6) Appraisal right.
The Board should be transparent and fair in the conduct of the annual and special stockholders meetings of the corporation. The stockholders should be encouraged to
personally attend such meetings. If they cannot attend, they should be apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the bylaws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the stockholders favor.
It is the duty of the Board to promote the rights of the stockholders, remove impediments to the exercise of those rights and provide an adequate avenue for them to
seek timely redress for breach of their rights.
The Board should take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders meaningful
participation in meetings, whether in person or by proxy. Accurate and timely information should be made available to the stockholders to enable them to make a sound
judgment on all matters brought to their attention for consideration or approval.
Although all stockholders should be treated equally or without discrimination, the Board should give minority stockholders the right to propose the holding of meetings
and the items for discussion in the agenda that relate directly to the business of the corporation.
(v) Disclosure and Transparency
The essence of corporate governance is transparency. The more transparent the internal workings of the corporation are, the more difficult it will be for Management
and dominant stockholders to mismanage the corporation or misappropriate its assets. All material information about the corporation which could adversely affect its
viability or the interests of the stockholders should be publicly and timely disclosed. All such information should be disclosed through the appropriate Exchange
3
mechanisms and submissions to the Commission.

2) How often does the Board review and approve the vision and mission?
The Corporation reviews its Mission and Vision from time to time as may be needed.
b.
DIRECTORSHIP IN OTHER COMPANIES

(i) Directorship in the Companys Group
Identify, as and if applicable, the members of the companys Board of Directors who hold the office of director in other companies within its Group:
Directors Name
Corporate Name of the

Group Company
Philippine Long Distance Telephone Company
PLDT Communications and Energy Ventures Inc. (PCEV)
Smart Communications, Inc.
ePLDT, Inc.
Landco Pacific Corporation
Maynilad Water Services Corporation
Philex Mining Corporation
Manila North Tollways Corporation
Medical Doctors, Inc. (Makati Medical Center)
Colinas Verdes, Inc.(Cardinal Santos Medical Center)
Davao Doctors, Inc.
Beacon Electric Asset Holdings, Inc
Riverside Medical Center, Inc
Our Lady of Lourdes Hospital
Asian Hospital, Inc
Mediaquest, Inc
Associated Broadcasting Corporation (TV5)
Light Rail Manila Holdings Inc.
Type of Directorship (Executive, NonExecutive, Independent). Indicate if

director is also the Chairman.
Chairman, Non-Executive Director
The Group is composed of the parent, subsidiaries, associates and joint ventures of the company.
4
Jose Ma. K. Lim
Edward S. Go
Beacon Electric Asset Holdings Inc.

Tollways Management Corporation
Indra Philippines
Meralco Powergen
Our Lady of Lourdes Hospital
Asian Hospital
Davao Doctors Hospital (Clinica Hilario) Inc.
Riverside Medical Center
Metro Strategic Infrastructure Holdings, Inc.
PLDT Communications and Energy Ventures, Inc. (PCEV)
TV5 Network, Inc. (formerly ABC Development Corporation)
Mediaquest Holdings, Inc.
Cignal TV Inc.(formerly Mediascape, Inc.)
Colinas Healthcare Inc.
East Manila Hospital Managers Corporation
Asian Hospital Inc.
Riverside Medical Center Inc.
Riverside College Inc.
Davao Doctors Hospital (Clinica Hilario) Inc.
Davao Doctors College Inc.
De Los Santos Medical Center Inc.
De Los Santos STI Megaclinic Inc.
Central Luzon Doctors Hospital Inc.

Executive Director, President
Executive Director
5
Edward A Tortorici
Ray C. Espinosa
Robert C. Nicholson
Victorico P. Vargas
Philippine Long Distance Tel. Co.

Metro Pacific Tollways Development Corporation
Cavitex Infrastructure Corp.
PEA Tollway Corporation
PLDT Subic Telecom, Inc.
PLDT Clark Telecom, Inc.
TAHANAN
PLDT Global Corporation
Pacific Global One Aviation Company Inc.
ABC Development Corporation
Mediascape, Inc.
Digital Telecommunications Philippines
Digitel Crossing
Nation Broadcasting Corporation
Meralco PowerGen Corporation
Philippine Telecommunications Investment Corp.
Metro Pacific Assets Holdings
BTF Holdings, Inc
Inc Metro Pacific Resources, Inc. - Director
Metro Pacific Holdings
Two Rivers Pacific Holdings Corporation
Tahanan Mutual Building and Loan Association, Inc.
Cignal TV, Inc. (formerly Mediascape, Inc.)
Media5 Marketing Corporation
Philex Petroleum Corporation
PLDT Global Corporation
Executive Director, President and CEO

Executive Director
6
Washington Z. SyCip
David J. Nicol
Antonio A. Picazo
Lydia B. Echauz
Metropac Water Investments Corporation

Philippine Hydro, Inc.
None
MPIC Infrastructure Holdings, Inc.
None
None
Cignal TV, Inc. (formerly Mediascape, Inc.)
ABC Development Corporation
BTF Holdings, Inc
(ii) Directorship in Other Listed Companies

Identify, as and if applicable, the members of the companys Board of Directors who are also directors of publicly-listed companies outside of its Group:
Directors Name
Jose Ma. K. Lim
David J. Nicol
Edward S. Go
Antonio A. Picazo
Name of Listed Company

None
None
None
None
None
None
None
Petron Corporation
Bank of Philippine Islands
First Philippine Holdings Corporation
Robinsons Land Corporation
GMA Network, Inc.
GMA Holdings, Inc.
Type of Directorship (Executive, NonExecutive, Independent). Indicate if

director is also the Chairman.
None
None
None
None
None
None
None
Lydia B. Echauz
Edward A Tortorici
Ray C. Espinosa
Robert C. Nicholson
Victorico P. Vargas
Washington Z. SyCip
Jollibee Foods Corporation

Asian Terminals
None
Far Eastern University Inc.
None
None
Non-executive Director
None
Lepanto Consolidated Mining Corporation
Philweb Corporation
None
None
Lopez Holdings Corporation
Belle Corporation
First Philippine Holdings Corporation
Highlands Prime Inc.
Century Properties Group Inc.
Cityland Development Corp.
MacroAsia Corporation
Philippine National Bank
Non-Executive Director, Vice Chairman

None
None
Chairman, Independent Director

(iii) Relationship within the Company and its Group

Provide details, as and if applicable, of any relation among the members of the Board of Directors, which links them to significant shareholders in the company
and/or in its group:
The Corporation 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 Corporation to become Directors or Executive Officers is related to the others by consanguinity or affinity within the fourth civil degree.
Directors Name
Name of the Significant Shareholder
Description of the relationship
None
None
None
(iv) Has the company set a limit on the number of board seats in other companies (publicly listed, ordinary and companies with secondary license) that an individual
director or CEO may hold simultaneously? In particular, is the limit of five board seats in other publicly listed companies imposed and observed? If yes, briefly
describe other guidelines:
Guidelines
c.
Executive Director
The Corporations Revised Manual of Corporate Governance states a

provision that Corporations Board may consider the adoption of
guidelines on the number of directorships that its members can hold
in stock and non-stock corporations. The optimum number should
take into consideration the capacity of a director to diligently and
efficiently perform his duties and responsibilities. (Article 3. Board
Governance, Section B. Multiple Board Seats)
The Corporations Revised Manual of Corporate Governance contains

a provision that Corporations Board may consider the adoption of
guidelines on the number of directorships that its members can hold
in stock and non-stock corporations. The optimum number should
take into consideration the capacity of a director to diligently and
efficiently perform his duties and responsibilities. (Article 3. Board
CEO
The Corporations Revised Manual of Corporate Governance states

that for the CEO and other executives, they may be covered by a
lower indicative limit for membership in other boards. A similar limit
may apply to independent or non-executive directors who, at the
same time, serve as full-time executives in other corporations. (Article
3. Board Governance, Section B. Multiple Board Seats)
Maximum Number of Directorships in other

companies
The Corporation has not set a limit, although the
Corporations Revised Manual of Corporate
Governance states that the optimum number
should take into consideration the capacity of a
non-director to diligently and efficiently perform
his duties and responsibilities. (Article 3. Board
should take into consideration the capacity of a
non-executive director to diligently and
efficiently perform his duties and responsibilities.
(Article 3. Board Governance, Section B. Multiple
Board Seats)
should take into consideration the capacity of
the CEO to diligently and efficiently perform his
duties and responsibilities. (Article 3. Board
SHAREHOLDINGS IN THE COMPANY

Complete the following table on the members of the Companys Board of Directors who directly and indirectly own shares in the company:
The following are the number of common shares of stock owned of record and beneficially by the directors of the Company, and the percentage of shareholdings of
each, as at February 28, 2015:
Name of Director
Jose Ma. K. Lim
David J. Nicol
Lydia B. Echauz
Ray C. Espinosa
Edward S. Go
Robert C. Nicholson
Antonio A. Picazo
Edward A. Tortorici
Victorico P. Vargas
Washington Z. SyCip
TOTAL
2.
1
11,000,001
7,250,001
30,000
1
5,862,001
500,000
1
10,000,001
250,001
1,001
2,500,001
10,729,596
4,500,001
Number of
Indirect shares / Through
(name of record owner)
None
None
None
None
None
None
None
None
None
None
None
None
None
None
1
52,622,608
None
None
Number of Direct
shares
% of Capital Stock
0.00%
0.04%
0.03%
0.00%
0.00%
0.02%
0.00%
0.00%
0.04%
0.00%
0.00%
0.01%
0.04%
0.00%
0.00%
CHAIRMAN AND CEO

(a) Do different persons assume the role of Chairman of the Board of Directors and CEO? If no, describe the checks and balances laid down to ensure that the Board gets
the benefit of independent views.
Yes
No
(v)
Identify the Chair and CEO:

Chairman of the Board
CEO/President
Jose Ma. K. Lim
(b) Roles, Accountabilities and Deliverables

1.
Define and clarify the roles, accountabilities and deliverables of the Chairman and CEO.
10
The roles of the Chairman and CEO is separated to foster and appropriate balance of power, increased accountability and better capacity for independent decisionmaking by the Board.
The summary of the roles, accountabilities and deliverables of the Chairman and the Chief Executive Officer as defined in the Corporations Amended By-Laws, and
Revised Manual of Corporate Governance is stated in the table shown below.
Roles
Chairman
The Chairmans roles are as follows:
a. Preside at the meetings of the directors and the
stockholders.
b. Ensure that the meetings of the Board are held in
accordance with the By-Laws or as the Chair may
deem necessary.
c. Supervise the preparation of the agenda of the
meeting in coordination with the Corporate
Secretary, taking into consideration the suggestions
of the CEO, Management and the directors; and
d. Maintain qualitative and timely lines of
communication and information between the Board
and Management
e. Exercise such power and perform such duties as the
Board of Directors may assign to him.
Accountabilities
The Chairman is accountable to all shareholders of the
Chief Executive Officer

The Chief Executive Officers (CEO) roles are as follows:
a. To preside at the meetings of the Board of Directors and of the
stockholders in the absence of the Chairman or Vice Chairman of the
Board of Directors.
b. To initiate and develop corporate objectives and policies and formulate
long range projects, plans and programs for the approval of the Board
of Directors including those for executive training, development and
compensation.
c. Administer and direct the day-to-day business of the Corporation.
d. To have general supervision and management of the business affairs
and property of the Corporation.
e. To ensure that the administrative and operational policies of the
corporation are carried out under his supervision and control.
f. Subject to guidelines prescribed by the law, to appoint, remove,
suspend, or discipline employees of the Corporation, prescribe their
duties, and determine their salaries.
g. To oversee the preparation of budgets and the statements of accounts
of the Corporation.
h. To prepare such statements and reports of the Corporation as may be
required of him by law.
i. To represent the Corporation at all functions and proceedings.
j. To execute on behalf of the Corporation all contracts, agreements and
other instruments affecting the interests of the Corporation which
require the approval of the Board of Directors, except as otherwise
directed by the Board of Directors.
k. To make reports to the Board of Directors and stockholders.
l. To sign certificates of stocks.
m. To perform such other duties as are incident to his office or are
entrusted to him by the Board of Directors.
The CEO is accountable to the Board of Directors in achieving goals and
11
Deliverables
2.
Corporation.
targets set by the Corporation.
The following are the deliverables of the Chairman:

a. Ensure that the meetings of the Board are held in
accordance with the By-Laws or as the Chair may
deem necessary.
b. Supervise the preparation of the agenda of the
meeting in coordination with the Corporate
Secretary, taking into consideration the suggestions
of the CEO, Management and the directors; and
c. Maintain qualitative and timely lines of
communication and information between the Board
and Management
The Chief Executive Officers (CEO) roles are as follows:

a. To initiate and develop corporate objectives and policies and formulate
long range projects, plans and programs for the approval of the Board of
Directors including those for executive training, development and
compensation.
b. Administer and direct the day-to-day business of the Corporation.
c. To have general supervision and management of the business affairs and
property of the Corporation.
d. To ensure that the administrative and operational policies of the
corporation are carried out under his supervision and control.
e. To oversee the preparation of budgets and the statements of accounts
of the Corporation.
f. To prepare such statements and reports of the Corporation as may be
required of him by law.
g. To represent the Corporation at all functions and proceedings.
h. To execute on behalf of the Corporation all contracts, agreements and
other instruments affecting the interests of the Corporation which
require the approval of the Board of Directors, except as otherwise
directed by the Board of Directors.
i. To make reports to the Board of Directors and stockholders.
j. To sign certificates of stocks.
Explain how the Board of Directors plans for the succession of the CEO/Managing Director/President and the top key management positions?
The Board has the responsibility of adopting an effective succession planning program for Management. As part of its internal control responsibilities, the Board
evaluates the proposed senior management appointments and reviews the Corporations management succession plan. The First Pacific Leadership Academy (FPLA), the
groups executive learning and development arm, is in charge of high level executive succession planning. FPLA gathers data on current and potential leaders across the
First Pacific group of companies, and create development programs for those who are considered high potentials for future CEO/President positions. The academy
continually conducts reviews with the Corporations Chairman on the development of the pipeline and replacing vacant key positions. Key leaders within the group are
regularly rotated to ensure that high potentials are being developed.
3.
OTHER EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS

(a) Does the company have a policy of ensuring diversity of experience and background of directors in the board? Please explain.
The Corporation has a Diversity Policy, as disclosed in its website, which states the following:
12
MPIC embraces and promotes diversity at all levels, including at Board level. Diversity, in terms of age, gender, culture and religion, exists in the workplace of the
Corporation. The Corporation is committed to providing opportunities that allow individuals to reach their full potential irrespective of individual background or
difference. In selecting new directors, The Corporation takes diversity of background into account in, addition to experience, skills and qualifications. Each year the Board
will set measurable objectives to determine compliance with diversity related initiatives. The Nomination Committee will monitor and evaluate implementation thereof.
(b) Does it ensure that at least one non-executive director has an experience in the sector or industry the company belongs to? Please explain.
Yes, the Corporation ensures that least one non-executive director has an experience in the sector or industry the company belongs to. The non-executive directors that have
experiences in investments are Mr. Edward S. Go (Independent Director) who has over 40 years of management experience in banking and finance; and Atty. Ray C. Espinosa
who is a President and CEO of various companies within the group and who holds directorships (either as Executive, Non-Executive or Independent Director) in different
publicly listed corporations.
(c) Define and clarify the roles, accountabilities and deliverables of the Executive, Non-Executive and Independent Directors:
Roles
Executive
The Executive director is a director who is
also the head of a department or unit of the
Corporation or performs any work related to
its operation. The following are the roles of
an Executive Director as stated in the
Corporations By-Laws and Revised Manual
of Corporate Governance:
Non-Executive
The Non-executive director is a director who
is not the head of a department or unit of the
corporation nor performs any work related to
its operation. The following are the roles of a
Non-Executive Director as stated in the
Corporations By-Laws and Revised Manual of
Corporate Governance:
It is the Boards responsibility to foster

the long-term success of the corporation,
and to sustain its competitiveness and
profitability in a manner consistent with
its corporate objectives and the best
interests of its stockholders.
It is the Boards responsibility to foster the

long-term success of the corporation, and
to sustain its competitiveness and
profitability in a manner consistent with its
corporate objectives and the best interests
of its stockholders.
The Board should formulate the

corporations vision, mission, strategic
objectives, policies and procedures that
shall guide its activities, including the
means to effectively monitor
Managements performance.

shall guide its activities, including the
means to effectively monitor
Managements performance.
An Independent director is a person who,
apart from his fees and shareholdings, is
independent of management and free from
any business or other relationship which could,
or could reasonably be perceived to; materially
interfere with his exercise of independent
judgment in carrying out his responsibilities as
a director. The following are the roles of an
Independent Director as stated in the
Corporations By-Laws and Revised Manual of
Corporate Governance:
Independent directors should always attend
Board meetings. Unless otherwise provided
in the By-laws, their absence shall not affect
the quorum requirement. However, the
Board may, to promote transparency,
require the presence of at least one
independent director in all its meetings.
It is the Boards responsibility to foster the
long-term success of the corporation, and
to sustain its competitiveness and
13
To ensure a high standard of best practice

for the corporation and its stockholders,
the Board should conduct itself with
honesty and integrity in the performance
of, among others, the following duties
and functions:

for the corporation and its stockholders,
the Board should conduct itself with
honesty and integrity in the performance
of, among others, the following duties and
functions:
a. Implement a process for the selection

of directors who can add value and
contribute independent judgment to
the formulation of sound corporate
strategies and policies .Appoint
competent, professional, honest and
highly-motivated management
officers. Adopt an effective succession
planning program for Management.
b. Provide sound strategic policies and
guidelines to the corporation on major
capital expenditures. Establish
programs that can sustain its longterm viability and strength.
Periodically evaluate and monitor the
implementation of such policies and
strategies, including the business
plans, operating budgets and
Managements overall performance.
c. Ensure the corporations faithful
compliance with all applicable laws,
regulations and best business
practices.
d. Establish and maintain an investor
relations program that will keep the
stockholders informed of important
developments in the corporation. If
feasible, the corporations CEO or chief
financial officer shall exercise
oversight responsibility over this
program.
a. Implement a process for the selection

of directors who can add value and
contribute independent judgment to
the formulation of sound corporate
highly-motivated management officers.
Adopt an effective succession planning
program for Management.
capital expenditures. Establish
programs that can sustain its long-term
viability and strength. Periodically
evaluate and monitor the
implementation of such policies and
strategies, including the business plans,
operating budgets and Managements
overall performance.
regulations and best business practices.
financial officer shall exercise oversight
responsibility over this program.
e. Identify the sectors in the community
in which the corporation operates or
profitability in a manner consistent with its

corporate objectives and the best interests
of its stockholders.
shall guide its activities, including the means
to effectively monitor Managements
performance.
for the corporation and its stockholders, the
Board should conduct itself with honesty
and integrity in the performance of, among
others, the following duties and functions:
a. Implement a process for the selection of

directors who can add value and
contribute independent judgment to the
formulation of sound corporate
highly-motivated management officers.
Adopt an effective succession planning
program for Management.
capital expenditures. Establish programs
that can sustain its long-term viability
and strength. Periodically evaluate and
monitor the implementation of such
policies and strategies, including the
business plans, operating budgets and
Managements overall performance.
14
e. Identify the sectors in the community

in which the corporation operates or
are directly affected by its operations,
and formulate a clear policy of
accurate, timely and effective
communication with them.
f. Adopt a system of check and balance
within the Board. A regular review of
the effectiveness of such system
should be conducted to ensure the
integrity of the decision-making and
reporting processes at all times. There
should be a continuing review of the
corporations internal control system
in order to maintain its adequacy and
effectiveness.
g. Identify key risk areas and
performance indicators and monitor
these factors with due diligence to
enable the corporation to anticipate
and prepare for possible threats to its
operational and financial viability.
h. Formulate and implement policies and
procedures that would ensure the
integrity and transparency of related
party transactions between and
among the corporation and its parent
company, joint ventures, subsidiaries,
associates, affiliates, major
stockholders, officers and directors,
including their spouses, children and
dependent siblings and parents, and
of interlocking director relationships
by members of the Board.
i. Constitute an Audit Committee and
such other committees it deems
necessary to assist the Board in the
performance of its duties and
responsibilities.
are directly affected by its operations,

and formulate a clear policy of
accurate, timely and effective
communication with them.
within the Board. A regular review of
the effectiveness of such system should
be conducted to ensure the integrity of
the decision-making and reporting
processes at all times. There should be
a continuing review of the
corporations internal control system in
order to maintain its adequacy and
effectiveness.
g. Identify key risk areas and performance
indicators and monitor these factors
with due diligence to enable the
corporation to anticipate and prepare
for possible threats to its operational
and financial viability.
party transactions between and among
the corporation and its parent
company, joint ventures, subsidiaries,
associates, affiliates, major
stockholders, officers and directors,
including their spouses, children and
dependent siblings and parents, and of
interlocking director relationships by
members of the Board.
responsibilities.
j. Establish and maintain an alternative
dispute resolution system in the

regulations and best business practices.
financial officer shall exercise oversight
responsibility over this program.
e. Identify the sectors in the community in
which the corporation operates or are
directly affected by its operations, and
formulate a clear policy of accurate,
timely and effective communication with
them.
within the Board. A regular review of the
effectiveness of such system should be
conducted to ensure the integrity of the
decision-making and reporting processes
at all times. There should be a
continuing review of the corporations
internal control system in order to
maintain its adequacy and effectiveness.
g. Identify key risk areas and performance
indicators and monitor these factors
with due diligence to enable the
corporation to anticipate and prepare
for possible threats to its operational
and financial viability.
party transactions between and among
the corporation and its parent company,
joint ventures, subsidiaries, associates,
affiliates, major stockholders, officers
and directors, including their spouses,
children and dependent siblings and
15

corporation that can amicably settle
conflicts or differences between the
corporation and its stockholders, and
the corporation and third parties,
including the regulatory authorities.
k. Meet at such times or frequency as
may be needed. The minutes of such
meetings should be duly recorded.
Independent views during Board
meetings should be encouraged and
given due consideration.
l. Keep the activities and decisions of
the Board within its authority under
the articles of incorporation and bylaws, and in accordance with existing
laws, rules and regulations.
m. Appoint a Compliance Officer who
shall have the rank of at least vice
president. In the absence of such
appointment, the Corporate
Secretary, preferably a lawyer shall act
as Compliance Officer.
A directors office is one of trust and
confidence. A director should act in the
best interest of the corporation in a
manner characterized by transparency,
accountability and fairness. He should
also exercise leadership, prudence and
integrity in directing the corporation
towards sustained progress.
A director should observe the following
norms of conduct:
a. Conduct fair business transactions
with the corporation, and ensure that
his personal interest does not conflict

k. Meet at such times or frequency as
may be needed. The minutes of such
l. Keep the activities and decisions of the
Board within its authority under the
articles of incorporation and by-laws,
and in accordance with existing laws,
rules and regulations.
appointment, the Corporate Secretary,
preferably a lawyer shall act as
Compliance Officer.
confidence. A director should act in the
best interest of the corporation in a
manner characterized by transparency,
accountability and fairness. He should also
exercise leadership, prudence and integrity
in directing the corporation towards
sustained progress.
norms of conduct:
a. Conduct fair business transactions with
the corporation, and ensure that his
personal interest does not conflict with
the interests of the corporation.
b. Devote the time and attention
parents, and of interlocking director

relationships by members of the Board.
responsibilities.
k. Meet at such times or frequency as may
be needed. The minutes of such
l. Keep the activities and decisions of the
Board within its authority under the
articles of incorporation and by-laws,
and in accordance with existing laws,
rules and regulations.
appointment, the Corporate Secretary,
preferably a lawyer shall act as
Compliance Officer.
confidence. A director should act in the best
interest of the corporation in a manner
characterized by transparency,
accountability and fairness. He should also
exercise leadership, prudence and integrity
in directing the corporation towards
16
with the interests of the corporation.

b. Devote the time and attention
necessary to properly and effectively
perform his duties and
responsibilities.
c. Act judiciously.
d. Exercise independent judgment.
e. Have a working knowledge of the
statutory and regulatory requirements
that affect the corporation, including
its articles of incorporation and
bylaws, the rules and regulations of
the Commission and, where
applicable, the requirements of
relevant regulatory agencies.
f. Observe confidentiality.
necessary to properly and effectively

perform his duties and responsibilities.
c. Act judiciously.
that affect the corporation, including its
articles of incorporation and bylaws,
the rules and regulations of the
Commission and, where applicable, the
requirements of relevant regulatory
agencies.
Accountabilities
Executive directors are accountable to the

shareholders of the Corporation as they are
involved in the day-to-day activities of the
Company and are responsible for execution
of business strategies and plans.
Non-Executive Directors are accountable to

the shareholders of the Corporation as they
are part of the Board which has responsibility
to foster the long-term success of the
corporation, and to sustain its
competitiveness and profitability in a manner
consistent with its corporate objectives and
the best interests of its stockholders.
Deliverables
Improved shareholder value.
sustained progress.
norms of conduct:
a. Conduct fair business transactions with
the corporation, and ensure that his
personal interest does not conflict with
the interests of the corporation.
b. Devote the time and attention necessary
to properly and effectively perform his
duties and responsibilities.
c. Act judiciously.
that affect the corporation, including its
articles of incorporation and bylaws, the
rules and regulations of the Commission
and, where applicable, the requirements
of relevant regulatory agencies.
Independent directors also have the same
accountability to the shareholders. They are
expected to be independent of management
and free from any business or other
relationship which could, or could reasonably
be perceived to, materially interfere with his
exercise of independent judgment in carrying
out his responsibilities as a director. As
Independent Directors, as much as possible,
they are expected to be in attendance during
board meetings to promote transparency and
independence.
(d) Provide the companys definition of independence and describe the companys compliance to the definition.
17
In compliance with Corporations By-Laws and Revised Manual of Corporate Governance, the Board shall be composed of at least five (5), but not more than fifteen (15),
members who are elected by the stockholders. At least two (2) or twenty percent (20%) of the Board shall be composed of Independent directors, while the rest of the
members is a combination of executive and non-executive directors. An Independent director is a person who, apart from his fees and shareholdings, is independent of
management and free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of independent
judgment in carrying out his responsibilities as a director. The Corporation has fifteen (15) directors, four (4) of which are Independent.
(e) Does the company have a term limit of five consecutive years for independent directors? If after two years, the company wishes to bring back an independent
director who had served for five years, does it limit the term for no more than four additional years? Please explain.
The Corporations By-Laws stipulates that the Board of Directors shall be elected during each regular meeting of stockholders and shall hold office for (1) year and until their
successors are elected. The Nomination Committee formulates screening policies to enable the committee to effectively review the qualification of the nominees for
independent directors, and conduct nominations for independent directors prior to the stockholders meeting.
4.
CHANGES IN THE BOARD OF DIRECTORS (EXECUTIVE, NON-EXECUTIVE AND INDEPENDENT DIRECTORS)

e.
Resignation/Death/Removal
Indicate any changes in the composition of the Board of Directors that happened during the period:
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.
Name
Position
Date of Cessation
Reason
None
None
None
None
(b) Selection/Appointment, Re-election, Disqualification, Removal, Reinstatement and Suspension

1) Describe the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement and suspension of the members of the Board of
Directors. Provide details of the processes adopted (including the frequency of election) and the criteria employed in each procedure:
The following are the procedures for the selection/appointment, re-election, disqualification, removal, reinstatement and suspension of the members of the Board of
Directors as taken from the Securities and Regulation Code (SRC), the Corporations By-Laws and Revised Manual of Corporate Governance.
Procedure
Process Adopted
Criteria
a. Selection/Appointment
(i) Executive
Company By-Laws
Company By-Laws
18
Directors
Article III
Section 3 Election and Term
Article III
Section 2 Qualifications of the Members of the Board
The Board of Directors shall be elected during each

regular meeting of stockholders and snail hold office for
one (1) year and until their successors are elected and
qualified.
Any person having at least one share of stock registered in his name in the
books of the Corporation may be nominated and elected to the Board of
Directors, provided, however, that no person shall qualify or be eligible for
nomination or election to the Board of Directors if he is engaged in any
business which competes with or is antagonistic to that of the Corporation
or any of its subsidiaries or affiliates. Without limiting the generality of the
foregoing, a person shall be deemed to be so engaged:
A nomination committee is hereby created which may be

organized from time to time upon determination of the
Board of Directors. The nomination committee shall be
composed of at least three (3) members, one of whom
shall be an independent director.
The nomination committee shall have the following
functions: (A) formulate screening policies to enable the
committee to effectively review the qualification of the
nominees for independent directors; and (B) conduct
nominations for independent directors prior to the
stockholders meeting in accordance with the procedures
set forth in Rule 38 of the Amended Implementing Rules
and Regulations of the Securities and Regulation Code, as
the same may be amended from time to time.
i. if he is an officer, manager or controlling person of, or the owner (either

of record or beneficial) of 20% or more of any outstanding class of
shares of any corporation (other than one in which this Corporation
owns at least 30% of the capital stock) engaged in business which the
Board, by at least two-thirds (2/3) vote determines to be competitive or
antagonistic to that of the Corporation or any of its subsidiaries or
affiliates;
ii. if he is an officer, manager or controlling person of, or the owner (either
shares of, any corporation or entity engaged in any line of business if the
Corporation or any of its subsidiaries or affiliates, when in the judgment
of the Board, by at least two-thirds (2/3) vote, the law against
combinations in restraint of trade shall be violated by such persons
membership in the Board of Directors; or
iii. if the Board, in the exercise of its judgment in good faith, determines by
at least two-thirds (2/3) vote that he is the nominee of any person set
forth in (i) or (ii).
In determining whether or not a person is a controlling person, beneficial
owner or nominee of another, the Board may take into account such factors
as business and family relationships.
For proper implementation of this provision, all nominations for election for
Directors by the stockholders shall be submitted in writing to the Board of
Directors and be received at the Corporations principal place of business at
least thirty (30) working days before the date of the regular or special
meeting of stockholders for the purpose of electing directors.
19
Revised Manual of Corporate Governance

Article 3
Part D. Qualifications of Directors
Company By-Laws
Article III
qualified.
(ii) Non-Executive
Directors

In addition to the qualifications for membership in the Board provided for in

the Corporation Code, Securities Regulation Code and other relevant laws,
the Board may provide for additional qualifications which include, among
others, the following:
(i) College education or equivalent academic degree;
(ii) Practical understanding of the business of the corporation;
(iii) Membership in good standing in relevant industry, business or
professional Organizations; and
(iv) Previous business experience.
Company By-Laws
Article III
affiliates;
20

Article 3

Article 3

Company By-Laws
Article III
(iii) Independent
Directors

qualified.
Company By-Laws
Article III
Section 2A Independent Directors
The Corporation shall have at least two (2) independent directors or at least
twenty percent (20%) of the entire Board membership, whichever is lesser.
The independent directors shall have all the qualifications and none of the
disqualifications set forth in Section 38 of the Securities and Regulation Code
and its Implementing Rules and Regulations, as the same may be amended
from time to time.
21

Republic Act No. 8799
Amended Implementing Rules and Regulation of the Securities Regulation
Code (SRC)
Rule 38 Requirements on Nomination and Election of Independent
Directors, Item (2)

Amended Implementing Rules and Regulation of the
Securities Regulation Code (SRC)
Rule 38 Requirements on Nomination and Election of
Independent Directors, Item (2)
2. As used in Section 38 of the Code, independent director means a person

who, apart from his fees and shareholdings, is independent of
management and free from any business or other relationship which
could, or could reasonably be perceived to, materially interfere with his
exercise of independent judgment in carrying out his responsibilities as a
director in any covered company and includes, among others, any
person who:
A. Is not a director or officer of the covered company or of its related
companies or any of its substantial shareholders except when the
same shall be an independent director of any of the foregoing;
B. Does not own more than two percent (2%) of the shares of the
covered company and/or its related companies or any of its
substantial shareholders;
C. Is not related to any director, officer or substantial shareholder of
the covered company, any of its related companies or any of its
substantial shareholders. For this purpose, relatives include spouse,
parent, child, brother, sister, and the spouse of such child, brother
or sister;
D. Is not acting as a nominee or representative of any director or
substantial shareholder of the covered company, and/or any of its
related companies and/or any of its substantial shareholders,
pursuant to a Deed of Trust or under any contract or arrangement;
22
E.

Article 3
Has not been employed in any executive capacity by the covered

company, any of its related companies and/or by any of its
substantial shareholders within the last five (5) years;
F. Is not retained, either personally or through his firm or any similar
entity, as professional adviser, by that covered company, any of its
related companies and/or any of its substantial shareholders, within
the last five (5) years; or
G. Has not engaged and does not engage in any transaction with the
covered company and/or with any of its related companies and/or
with any of its substantial shareholders, whether by himself and/or
with other persons and/or through a firm of which he is a partner
and/or a company of which he is a director or substantial
shareholder, other than transactions which are conducted at arms
length and are immaterial.
b. Re-appointment
(i) Executive
Directors
Company By-Laws
Article III
Company By-Laws
Article III

qualified.


23


affiliates;

Article 3

24
Company By-Laws
Article III
Company By-Laws
Article III
qualified.
(ii) Non-Executive
Directors

affiliates;
25

Article 3

Company By-Laws
Article III
qualified.
(iii) Independent
Directors

Company By-Laws
Article III
from time to time.

26

person who:

Article 3

or sister;
E. Has not been employed in any executive capacity by the covered
F. Is not retained, either personally or through his firm or any similar
27

Securities and Exchange Commission (SEC) Memorandum

Circular No. 9, Series of 2011 on Term Limits for
Independent Directors.
1. There shall be no limit in the number of covered companies that a

person may be elected as Independent Director (ID), except in business
conglomerates where an ID can be elected to only five (5) companies of
the conglomerate, i.e., parent company, subsidiary or affiliate;
2. IDs can serve as such for five (5) consecutive years, provided that service
for a period of at least six (6) months shall be equivalent to one (1) year,
regardless of the manner by which the ID position was relinquished or
terminated;
3. After completion of the five-year service period, an ID shall be ineligible
for election as such in the same company unless the ID has undergone a
cooling off period of two (2) years, provided, that during such period,
the ID concerned has not engaged in any activity that under existing
rules disqualifies a person from being elected as ID in the same
company;
4. An ID re-elected as such in the same company after the cooling off
period can serve for another five (5) consecutive years under the
conditions mentioned in paragraph 2 above;
5. After serving as ID for ten (10) years, the ID shall be perpetually barred
from being elected as such in the same company, without prejudice to
being elected as ID in other companies outside of the business
conglomerate, where applicable, under the same conditions provided
for in this Circular.
c. Permanent Disqualification
The following shall be grounds for the permanent disqualification of a
director:
(i) Executive
Directors

Article 3
Part E. Disqualification of Directors, Item (1) Permanent
Disqualification
(i) Any person convicted by final judgment or order by a competent

judicial or administrative body of any crime that (a) involves the
purchase or sale of securities, as defined in the Securities Regulation
Code; (b) arises out of the persons conduct as an underwriter, broker,
dealer, investment adviser, principal, distributor, mutual fund dealer,
futures commission merchant, commodity trading advisor, or floor
broker; or (c) arises out of his fiduciary relationship with a bank, quasi28
bank, trust company, investment house or as an affiliated person of

any of them;
(ii) Any person who, by reason of misconduct, after hearing, is
permanently enjoined by a final judgment or order of the Commission
or any court or administrative body of competent jurisdiction from: (a)
acting as underwriter, broker, dealer, investment adviser, principal
distributor, mutual fund dealer, futures commission merchant,
commodity trading advisor, or floor broker; (b) acting as director or
officer of a bank, quasi-bank, trust company, investment house, or
investment company; (c) engaging in or continuing any conduct or
practice in any of the capacities mentioned in subparagraphs (a) and
(b) above, or willfully violating the laws that govern securities and
banking activities.
The disqualification shall also apply if such person is currently the
subject of an order of the Commission or any court or administrative
body denying, revoking or suspending any registration, license or
permit issued to him under the Corporation Code, Securities
Regulation Code or any other law administered by the Commission or
Bangko Sentral ng Pilipinas (BSP), or under any rule or regulation
issued by the Commission or BSP, or has otherwise been restrained to
engage in any activity involving securities and banking; or such person
is currently the subject of an effective order of a self-regulatory
organization suspending or expelling him from membership,
participation or association with a member or participant of the
organization;
(iii) Any person convicted by final judgment or order by a court or
competent administrative body of an offense involving moral
turpitude, fraud, embezzlement, theft, estafa, counterfeiting,
misappropriation, forgery, bribery, false affirmation, perjury or other
fraudulent acts;
(iv) Any person who has been adjudged by final judgment or order of the
Commission, court, or competent administrative body to have willfully
violated, or willfully aided, abetted, counseled, induced or procured
the violation of any provision of the Corporation Code, Securities
BSP, or any of its rule, regulation or order;
(v) Any person earlier elected as independent director who becomes an
officer, employee or consultant of the same corporation;
29
(vi) Any person judicially declared as insolvent;

(vii) Any person found guilty by final judgment or order of a foreign court
or equivalent financial regulatory authority of acts, violations or
misconduct similar to any of the acts, violations or misconduct
enumerated in sub-paragraphs (i) to (v) above;
(viii) Conviction by final judgment of an offense punishable by
imprisonment for more than six (6) years, or a violation of the
Corporation Code committed within five (5) years prior to the date of
his election or appointment.
director:
(ii) Non-Executive
Directors

Article 3
Disqualification

broker; or (c) arises out of his fiduciary relationship with a bank, quasibank, trust company, investment house or as an affiliated person of
any of them;
banking activities.
30

organization;
fraudulent acts;
director:
(iii) Independent
Directors

Article 3
Disqualification

broker; or (c) arises out of his fiduciary relationship with a bank, quasi31
(ii)
(iii)
(iv)
(v)
(vi)
bank, trust company, investment house or as an affiliated person of

any of them;
Any person who, by reason of misconduct, after hearing, is
banking activities.
organization;
Any person convicted by final judgment or order by a court or
fraudulent acts;
Any person who has been adjudged by final judgment or order of the
Any person earlier elected as independent director who becomes an
Any person judicially declared as insolvent;
32
d. Temporary Disqualification
The Board may provide for the temporary disqualification of a director for
any of the following
reasons:
(i) Executive
Directors

Article 3
Part E. Disqualification of Directors, Item (2) Temporary
Disqualification
(ii) Non-Executive
Directors

Article 3
Disqualification
(i) Refusal to comply with the disclosure requirements of the Securities

Regulation Code and its implementing Rules and Regulations. The
disqualification shall be in effect as long as the refusal persists.
(ii) Absence in more than fifty (50) percent of all regular and special
meetings of the Board during his incumbency, or any twelve (12)
month period during the said incumbency, unless the absence is due
to illness, death in the immediate family or serious accident. The
disqualification shall apply for purposes of the succeeding election.
(iii) Dismissal or termination for cause as director of any corporation
covered by this Code. The disqualification shall be in effect until he
has cleared himself from any involvement in the cause that gave rise
to his dismissal or termination.
(v) If any of the judgments or orders cited in the grounds for permanent
disqualification has not yet become final. A temporarily disqualified
director shall, within sixty (60) business days from such
disqualification, take the appropriate action to remedy or correct the
disqualification. If he fails or refuses to do so for unjustified reasons,
the disqualification shall become permanent.
reasons:
33
reasons:
(iii) Independent
Directors

Article 3
Disqualification

(iv) if the beneficial equity ownership of an independent director in the
corporation or its subsidiaries and affiliates exceeds two percent of its
subscribed capital stock. The disqualification shall be lifted if the limit
is later complied with.
34

e. Permanent Disqualification
director:
(i) Executive
Directors
Aside from the provisions cited in Section 28 (Removal of

directors or trustees) of the Philippine Corporation Code,
in the event that an executive director is subject to
removal from his directorship, the Company follows the
provision of its Revised Manual of Corporate Governance
Article 3
Disqualification

any of them;
banking activities.
35
organization;
fraudulent acts;
director:
(ii) Non-Executive
Directors

in the event that a non-executive director is subject to
Article 3
Disqualification

any of them;
36

banking activities.
organization;
fraudulent acts;
37

director:
(iii) Independent
Directors

in the event that an independent director is subject to
Article 3
Disqualification

any of them;
banking activities.
38
organization;
fraudulent acts;
f. Re-instatement
In the event that a removed/suspended executive
director is subject to reinstatement as a director of the
Company, the Company follows the provision of its
Company By-Laws
Article III
(i) Executive
Directors

qualified.
Company By-Laws
Article III
39


affiliates;
In the event that a removed/suspended non-executive

Company By-Laws
Article III
(ii) Non-Executive
Directors

qualified.
Company By-Laws
Article III
40


affiliates;
In the event that a removed/suspended independent

Company By-Laws
Article III
(iii) Independent
Directors

qualified.
Company By-Laws
Article III
from time to time.

41

person who:


or sister;
E. Has not been employed in any executive capacity by the covered
42
F.
Is not retained, either personally or through his firm or any similar

g. Suspension
director:
(i) Executive
Directors
In the event that an executive director is subject to

suspension from his duty as a director of the Company,
the Company follows the provision of its
Article 3
Disqualification

any of them;
banking activities.
43
(ii) Non-Executive
Directors
In the event that a non-executive director is subject to

Article 3
Disqualification

organization;
fraudulent acts;
director:
44
(ii)
(iii)
(iv)
(v)
any of them;
Any person who, by reason of misconduct, after hearing, is
banking activities.
organization;
Any person convicted by final judgment or order by a court or
fraudulent acts;
Any person who has been adjudged by final judgment or order of the
Any person earlier elected as independent director who becomes an
45

director:
(iii) Independent
Directors
In the event that an independent director is subject to

Article 3
Disqualification

any of them;
banking activities.
46

organization;
fraudulent acts;
2) Stockholders' Meeting, Results and Attendance
As previously disclosed to the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE), the Corporation held its 2014 Annual Stockholders
Meeting on 30 May 2014. Below are the results of such meeting:
Resolution
Approval of the Chief Financial Officers Report and the Annual Report for the
year 2013
st
Adoption of the Audited Financial Statements for the year ended 31 December
2013 contained in the Annual Report
Approving
Dissenting
Abstaining
100% of SH in attendance
47
Ratification of all acts of the Board of Directors and Management for the year
2013
Appointment of the external auditor of the Company for the year 2014
Election of Directors:
Name of Director
Jose Ma. K. Lim
David J. Nicol
Lydia B. Echauz
Ray C. Espinosa
Edward S. Go
Robert C. Nicholson
Chief Justice Artemio V.
Panganiban
Antonio A. Picazo
Edward A. Tortorici
Victorico P. Vargas
Washington Z. SyCip
Votes Received
20,683,075,913
21,107,485,620
21,107,485,620
21,535,400,889
21,098,112,321
21,107,485,620
21,498,790,982
20,683,075,913
21,107,485,620
20,674,248,020
21,099,708,721
21,066,693,220
20,690,220,913
21,107,485,620
20,685,128,013
Below is a summary of the attendance in the last stockholders meeting:
Type of Meeting
Annual
Names of Board members /

Officers present
Atty. Amado R. Santiago III
Atty. Ray C. Espinosa
Date of Meeting
30 May 2014
Voting
Procedure (by
poll, show of
hands, etc.)
Votes were
counted thru
% of SH Attending
in Person
% of SH in
Proxy
Total % of SH
attendance
0.09%
69.69%
69.78%
48
Ms. Lydia B. Echauz

Chief Justice Artemio V. Panganiban
Mr. Washington Z. SyCip
Atty. Antonio A. Picazo
Mr. Augusto P. Palisoc, Jr.
Mr. Ramoncito S. Fernandez
Mr. Victorico P. Vargas
Mr. David J. Nicol
Mr. Jose Ma. K. Lim
5.
Proxies.
ORIENTATION AND EDUCATION PROGRAM

(a) Disclose details of the companys orientation program for new directors, if any.
The Corporation has no formal orientation program for new directors.
3
(b) State any in-house training and external courses attended by Directors and Senior Management for the past three (3) years:
Name of Director/Officer
Date of Training
12/04/2014
10/15/2014
04/01/2014
12/02/2013
11/19/2012
08/29/2012
Program
Corporate Governance: What to Expect from the SEC;
Corporate Governance Trends and Practices in Advanced
Economies Synopsis on Legal and Regulatory issues: Revised Listing
Rules on connected transactions.
Briefing on Corporate Governance Requirements Under U.S.
Laws and Regulations and Foreign Corrupt Practices Act Of
1977
Ensuring Effective Board Oversight of Ethics and
Compliance: Emerging Trends and Lessons
Learned
First Pacific Companies: Navigating the New World of
Business
Corporate Governance Practices for Listed Companys
Directors Under The New Listing Rules
Name of Training Institution

SEC Chairperson Teresita J. Herbosa and
Mr. Graham Winter, Makati Shangri-la,
Makati City
Graham Winter
Mr. Garth W. Bray Partner, Sullivan &
Cromwell LLP
Mr. Winthrop Swenson
Thomas Donaldson
The Wharton School
Ms Cecelia Ng
Senior Management refers to the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company.
49
12/04/2014
Jose Ma. K. Lim
11/19/2012
12/04/2014

Economies First Pacific Companies: Navigating the New World of
Business
Economies -
David J. Nicol
08/15/2012
12/04/2014
Edward S. Go
11/19/2012
12/04/2014
11/19/2012
8/17/2012
8/8-9/2012
5/21/2012
04/18-19/2012
03/15/2012
02/02-03/2012
Corporate Governance Asia's First Philippine International

CG Forum: Marching Towards Economic Sustainability

Business
Business
MVP Back to School Lecture Series
Competitive Intelligence & Business Wargaming
Kamia Room, G/F, EDSA, Shangri-La
Innovation Forum: The First 90 Days
First Pacific Leadership Academy
Antipolo City, Philippines
Leading the Self
Executive Talks: On Higher Ground
Future Proofing our Business

Makati City
Thomas Donaldson
The Wharton School
Makati City
Aldrin Monsod
Corporate Governance Asia
New Initiative Media Limited
Rm 2301, 23th Floor, World Wide
House
19 Des Voeux Road, Central, Hong Kong
Makati City
Thomas Donaldson
The Wharton School
Makati City
Thomas Donaldson
The Wharton School
Ateneo de Manila University
Scott Anthony
Archbishop Luis Antonio Tagle

Mr. Karl Ronn and Mr. Bob Johansen,
Facilitators thru the invitation of First
50

01/12/2012
12/04/2014
Antonio A. Picazo
11/19/2012
2012
12/04/2014
04/01/2014
UBS Global Outlook 2012

Rigodon Ballroom, The Peninsula Manila
Business
Corporate Governance Course
Economies Briefing on Corporate Governance Requirements Under U.S.
1977
03/31/2014
ASEAN Corporate Governance Scorecard Orientation
11/19/2012

Business
08/15/2012
Corporate Governance Asia's First Philippine International

CG Forum: Marching Towards Economic Sustainability
Marriot Hotel, Resorts World Manila, Philippines
12/04/2014
05/15-17/ 2011
03/1/2011
3/1/2011, 3/8/2011,
3/17/2011, 9/5/2011,
9/6/2011

Economies Interoperability and All Electronic Toll Collection Workshop
Dallas, Texas, USA
Orientation Course on Corporate Governance
Makati City
Professional Directors Program
Makati City
Pacific Leadership Academy

Makati City
Thomas Donaldson
The Wharton School
Douglas Henck
Vice Chairman of the Asian Corporate
Governance Association
Makati City
Cromwell LLP
Mr. Ricardo Nicanor N. Jacinto President & CEO, Institute of Corporate
Directors
Thomas Donaldson
The Wharton School
Aldrin Monsod
Corporate Governance Asia
New Initiative Media Limited
Rm 2301, 23th Floor, World Wide
House, 19 Des Voeux Road, Central,
Hong Kong
Makati City
IBTTA
The Institute of Corporate Directors
51
11/23-24/2011
11/19/2012
02/15/2012
11/8/2012
11/19/2012
11/22/2012
01/14-19/2013
03/4-9/2013
04/22-27/2013
06/19/2013
07/06/2013
08/22/2013
09/10/2013
09/19-26/2013
Evaluating Enterprise Risk Management

At Eastwood Richmonde Hotel, Bagumbayan, Q.C.
Business
Seminar-Workshop on New Media Strategies for Issues
Management
Discovery Suites, Pasig City
PPP and Infrastructure Forum
New World Hotel, Makati City
Business
Topic: Corporate Government Enhancement
Guest Speaker: Thomas Donaldson, The Wharton School
PPP: On the Road to Investment Grade
Manila Peninsula Hotel, Makati City
Advanced Management Program
Module 1 : Business Executive as Corporate Citizen
Venue: Oakwood Hotel, Ortigas
Module 2: Business Executive as Global Entrepreneur
In Jakarta, Indonesia
Module 3: Business Executive as Value Creator
In Cebu City
2013 Mid-Year Business Economics Briefing (Gearing UP for
the Asean Economic Community)
MVP Lecture Series (last session)
Chiang-Tan Room,School of Management 111, Ateneo
AIM CEO Forum | The Creation of Corporate Culture:
Building Values as the Basis of Corporate Culture at
Meralco Caseroom, Ground floor, AIM Building, Makati
th
11 MAP International CEO Forum Conference: Sept. 10,
2013 from8am to 5:30pm
Rizal Ballroom, Makati Shangrila Hotel, Makati City
Conference Theme: Business Beyond Borders: Global
Perspectives, Domestic Dynamics
st
81 IBTTA Conference in Vancouver, Canada
The Institute of Internal Auditors

Philippines Centre for Professional
Development
Thomas Donaldson
The Wharton School
Creative Point International, Inc.
British Embassy Manila and The UK
Trade and Investment (UKTI)
Economic Journalists Association of the
Philippines (EJAP)
University of Asia and the Pacific

MVP/Ateneo
AIM
MAP
IBTTA
52
11/07/2013
11/27/2013
12/02/2013
12/04/2014
01/15-17/2014
Lydia B. Echauz
12/02/2013
11/28-29/2013
11/19/2012
12/04/2014
10/15/2014
12/5/2012
Edward A Tortorici
2/2-3/2012
8/29/2012
Ray C. Espinosa
FPLAs Series: The Business of Innovation:

Transcending Business Through Innovation
SMX Convention Center, SM Aura, The Fort
2013 Year-end Economics Briefing entitled Infrastructure
Spending: Sustaining Philippine Growth: Nov. 27, 2013 from
1pm-5pm at Li Seng Giap Auditorium, UA&P
Joint Corporate Governance Symposium of MVP
Companies: Dec. 2 , 10am to 1:30pm
Makati Shangrila Hotel
Economies Good Governance Summit
Executive Talks: Corporate Governance Enchancement
Session
Corporate Governance Seminar
Business
"Synopsis on Legal and Regulatory, First Pacific Company
Limited, Hong Kong."
Corporate governance practices for listed companys
directors under the new Listing Rules
First Pacific Company Limited, Hong Kong
8/29/2012
Effective risk management and internal controls

12/04/2014

Economies -

Makati City
PICC
Manila AB, Makati Shangri-la Hotel
Thomas Donaldson
The Wharton School
Makati City
Graham Winter

Cecelia Ng, Director of Ernst & Young
Tim Clough, Keith Stephenson and
Wong Hung Han, Risk & Controls
Solutions, Price Waterhouse Coopers
Makati City
53
04/01/2014

1977
03/31/2014
11/20/2012
12/4/2014
02/2-3/2012
Robert C. Nicholson
08/29/2012
08/29/2012
08/30/2012
12/4/2014
11/07/2013
12/02/213
Victorico P. Vargas
02/02-03/2012
03/15/2012

Business
Economies Future Proofing our Business
Corporate governance practices for listed companys
directors under the new Listing Rules
Effective risk management and internal controls
Directors Training
Lifestyle Properties Development Limited
Economies Executive Series: The Business Innovation: Transcending
Business Through Innovation
SMX Convention Center, SM Aura Premier
Bonifacio Global City
Corporate Governance Enhancement Session
Makati Shangri-La, Makati City
Executive Talks: On Higher Ground

Cromwell LLP
Directors
Thomas Donaldson
The Wharton School
Makati City
Cecelia Ng, Director of Ernst & Young
Tim Clough, Keith Stephenson and
Wong Hung Han, Risk & Controls
Solutions, Price Waterhouse Coopers
Lifestyle Properties Development
Limited
Makati City

Archbishop Luis Antonio Tagle
54
04/18-19/2012
05/21/2012
11/19/2012
12/04/2014
Washington Z. SyCip
12/02/2013
11/19/2012
Leading the Self

Innovation Forum: The First 90 Days
Business
Economies Executive Talks: Corporate Governance Enhancement
Session
Business
Scott Anthony
Thomas Donaldson
The Wharton School
Makati City
Manila AB, Makati Shangri-la Hotel
Thomas Donaldson
The Wharton School
(c) Continuing education programs for directors: programs and seminars and roundtables attended during 2014.
Name of Director/Officer
Date of Training
12/04/2014
10/15/2014
04/01/2014
Jose Ma. K. Lim
12/04/2014
David J. Nicol
12/04/2014
Edward S. Go
12/04/2014
12/04/2014
Program
1977
Economies Corporate Governance: What to Expect from the SEC;
Name of Training Institution

Makati City
Graham Winter
Cromwell LLP
Makati City
Makati City
Makati City
55
Antonio A. Picazo
12/04/2014
12/04/2014
04/01/2014
03/31/2014
Lydia B. Echauz
12/04/2014
12/04/2014
01/15-17/2014
12/04/2014
Edward A Tortorici
10/15/2014
12/04/2014
Ray C. Espinosa
04/01/2014
03/31/2014
Robert C. Nicholson
12/04/2014
Victorico P. Vargas
12/4/2014

1977
Economies Good Governance Summit
1977
Makati City
Makati City
Makati City
Cromwell LLP
Directors
Makati City
Makati City
PICC
Makati City
Graham Winter
Makati City
Cromwell LLP
Directors
Makati City
56
Washington Z. SyCip
12/4/2014

Economies -

Makati City
Makati City
B. CODE OF BUSINESS CONDUCT & ETHICS

1.
POLICIES
Discuss briefly the companys policies on the following business conduct or ethics affecting directors, senior management and employees:
The Corporations Code of Business Conduct and Ethics sets forth MPICs business principles and values which shall guide and govern all business relationships of MPIC, its
directors, officers and employees, including their decisions and actions when performing their respective duties and responsibilities.
Business Conduct &

Ethics
Directors
Senior Management
Employees
1. Avoid any actual or apparent conflicts of interest between your private interest, including the private interest of a member of your
family, and the interests of MPIC, unless you have obtained prior approval by the appropriate approving authorities as designated in
applicable policies of MPIC. Any actual or apparent conflict of interest, and any material transaction or relationship that could
reasonably be expected to give rise to a conflict of interest, should be disclosed to the Corporate Governance Office.
2. Avoid activities and interests that could significantly affect the objective or effective performance of duties and responsibilities in
MPIC, including business interests or unauthorized employment outside MPIC, the receipt from and giving of gifts to persons or
entities with whom MPIC relates, as well as insider dealing.
(a) Conflict of Interest
3. Be loyal to MPIC. As such, all business decisions and actions must be based on the best interest of MPIC and must not be motivated by
personal considerations and other relationships, which may interfere with the exercise of independent judgment.
4. Advance MPICs legitimate interests when the opportunity arises. Avoid competing with MPIC on a business opportunity or acquiring
an interest adverse to that of MPICs. Refrain from taking advantage of Company property, information or position, or opportunities
arising from these, for personal gain, to compete with MPIC, or act against the best interest of MPIC. Directors, officers and employees
who intend to make use of Company property or services in a manner not solely for the benefit of MPIC should obtain prior approval
from appropriate approving authorities as designated in applicable policies of MPIC.
57
(b) Conduct of
Business and Fair
Dealings
(c) Receipt of gifts from
third parties
(d) Compliance with

Laws & Regulations
5. Refrain from the direct or indirect, grant or arrangements of loans to any director or officer, including loans granted or arranged by
MPICs subsidiaries and affiliates, unless such grant or arrangement is allowed by all applicable laws and regulations.
1. Avoid taking unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of
material facts, or any unfair dealing practice.
2. Deal fairly with MPICs customers, service providers, suppliers, competitors and employees.
1. Engage in honest conduct and comply with all applicable laws, rules and regulations, including prohibitions on insider trading, both in
letter and spirit. Demands brought on by prevailing business conditions or perceived pressures are not excuses for violating any law,
rules or regulations.
2. Personally adhere to the standards and restrictions imposed by those laws, rules and regulations.
3. Avoid the direct or indirect commission of bribery and corruption of representatives of governments or regulators to facilitate any
transaction or gain any perceived or actual favor or advantage, excluding permissible additional payments for routine governmental
actions allowed by all applicable laws and regulations.
1. Maintain and safeguard the confidentiality of information entrusted by MPIC, its subsidiaries, affiliates, customers, business partners,
or such other parties with whom MPIC relates, except when disclosure is authorized or legally mandated. Confidential information
includes any nonpublic information that might be of use to competitors, or harmful to MPIC, its subsidiaries, affiliates, customers,
business partners, or such other parties with whom MPIC relates, if disclosed.
(e) Respect for Trade

Secrets/Use of Nonpublic Information
(f) Use of Company

Funds, Assets and
Information
(g) Employment &
Labor Laws &
Policies
(h) Disciplinary action
2. Follow Company policy and applicable laws regarding business records retention. Ensure that records are not altered, concealed,
destroyed or falsified to impede, obstruct or influence any investigation by, or proceeding before any official Company committee or
body, governmental, regulatory or judicial body having jurisdiction.
3. Avoid trading any of MPICs securities or those of its subsidiaries and affiliates using price sensitive information that is not normally
available publicly, and obtained by reason of position, contact within, or other relationship with MPIC.
1. Use Company property and resources, including Company time, supplies and software, efficiently, responsibly and only for legitimate
business purposes.
2. Protect the assets of MPIC from loss, damage, misuse or theft.
1. The Corporate Governance Office is responsible for applying the Code to specific situations in which questions or concerns may arise,
58
and has the authority to interpret and decide on such issues arising from the implementation of the Code.
2. There shall be no waiver of any of the provisions of this Code in favor of any directors, officer, or employee, except when expressly
granted by the Board of Directors or the Governance and Nomination Committee in the case of waivers for directors and officers or by
the Corporate Governance Office in the case of waivers for employees. Any such waiver for any director or executive officer or any
material amendment to the Code must be promptly disclosed to the shareholders of MPIC.
3. Disciplinary actions against violators include measures such as dismissal and/or the filing of appropriate civil and criminal actions. For
purposes of this Code, violators are defined as a)persons who commit prohibited acts or who fail to implement prescribed acts when
there is an obvious opportunity to do so; b) employees who knowingly abet such acts of commission or omission or who fail to report
such acts that violate the Code; and c) persons of authority who fail to impose the necessary disciplinary measures against violators.
4. Retaliation or discrimination, whether direct or indirect and in any form, against any director, officer, or employee who reports,
honestly and in good faith, any violation or perceived violation of this Code shall not be tolerated.
1. Any director, officer or employee is encouraged to contact the Corporate Governance Office when in doubt about the best course of
action in a particular situation relating to a subject matter of the Code.
(i) Whistle Blower
(j) Conflict Resolution
2.
2. Any director, officer or employee who is aware of any existing or potential violation of the Code is required to notify the Corporate
Governance Office promptly. The Corporate Governance Office shall take all action it considers appropriate to investigate any
violations reported to it. If a violation has occurred, MPIC shall take such disciplinary or preventive action as it deems appropriate.
1. The Corporate Governance Office is responsible for applying the Code to specific situations in which questions or concerns may arise,
and has the authority to interpret and decide on such issues arising from the implementation of the Code.
2. There shall be no waiver of any of the provisions of this Code in favor of any directors, officer, or employee, except when expressly
granted by the Board of Directors or the Governance and Nomination Committee in the case of waivers for directors and officers or by
the Corporate Governance Office in the case of waivers for employees. Any such waiver for any director or executive officer or any
material amendment to the Code must be promptly disclosed to the shareholders of MPIC.
DISSEMINATION OF CODE
Has the code of ethics or conduct been disseminated to all directors, senior management and employees?
Yes, the Corporations Code of Business Conduct and Ethics are made available to all directors, senior management and employees. It is also published in the company
website for ease of access and reference.
3.
COMPLIANCE WITH CODE

Discuss how the company implements and monitors compliance with the code of ethics or conduct.
59
Directors, officers, and employees of the Corporation commit to comply with both the letter and spirit of the Code of Business Conduct and Ethics and MPIC endeavors to
obtain the same commitment from its business partners. The Corporations Corporate Governance Office is responsible for monitoring compliance and implementing the
Code to specific situations in which questions or concerns may arise, and has the authority to interpret and decide on such issues arising from the implementation of the
Code. The Corporation also established a whistleblowing policy, to be used as a communication or reporting channel on observed non-compliance in the Revised Manual of
Corporate Governance, Code of Business Conduct and Ethics, and other existing Corporate Governance policies and procedures. This policy is further discussed in item H.
Role of Stakeholders.
4.
RELATED PARTY TRANSACTIONS

a.
Policies and Procedures

Describe the companys policies and procedures for the review, approval or ratification, monitoring and recording of related party transactions between and among
the company and its parent, joint ventures, subsidiaries, associates, affiliates, substantial stockholders, officers and directors, including their spouses, children and
dependent siblings and parents and of interlocking director relationships of members of the Board.
The Corporation discloses in its financial statements transaction with related parties during the year. As disclosed in the Corporations 2014 Audited Financial
Statements, related party transactions pertain to enterprises and individuals that directly, or indirectly through one or more intermediaries, control or are controlled by
or under common control with the Corporation, including holding companies, subsidiaries and fellow subsidiaries. Associates and individuals owning, directly or
indirectly, an interest in the voting power of the Corporation that gives them significant influence over the enterprise, key management personnel, including directors a
officers of the Corporation 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.
Related Party Transactions
(1) Parent Company
(2) Joint Ventures
(3) Subsidiaries
(4) Entities Under Common
Control
(5) Substantial Stockholders
(6) Officers including
spouse/children/siblings/parents
(7) Directors including
Policies and Procedures

All transactions with Corporation goes through the same approval process as any normal business transaction with third party
and is done at arms length basis. These are disclosed in the Audited Financial Statements of the Corporation.
As provided in the Corporations Code of Business Conduct and Ethics, officers including spouse/children/siblings/parents are
mandated to avoid any actual or apparent conflict of interest between the officers private interest and interest of the
Corporation. They are also mandated to disclose to the Corporate Governance Office any actual or apparent conflict of interest,
and any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest.
As provided in the Corporations Revised Manual of Corporate Governance, a director should not use his position to profit or
60
spouse/children/siblings/parents
(8) Interlocking director

relationship of Board of Directors
gain some benefit or advantage for himself and/or his related interests. He should avoid situations that may compromise his
impartiality. If an actual or potential conflict of interest may arise on the part of a director, he should fully and immediately
disclose it and should not participate in the decision-making process. A director who has a continuing material conflict of interest
should seriously consider resigning from his position.
A conflict of interest shall be considered material if the directors personal or business interest is antagonistic to that of the
corporation, or stands to acquire or gain financial advantage at the expense of the Corporation.
As provided in the Corporations Revised Manual of Corporate Governance, a director should not use his position to profit or
gain some benefit or advantage for himself and/or his related interests. He should avoid situations that may compromise his
impartiality. If an actual or potential conflict of interest may arise on the part of a director, he should fully and immediately
disclose it and should not participate in the decision-making process. A director who has a continuing material conflict of interest
should seriously consider resigning from his position.
A conflict of interest shall be considered material if the directors personal or business interest is antagonistic to that of the
corporation, or stands to acquire or gain financial advantage at the expense of the Corporation.
b.
Conflict of Interest
(i) Directors/Officers and 5% or more Shareholders
Identify any actual or probable conflict of interest to which directors/officers/5% or more shareholders may be involved.
There is no actual or potential conflict of interest to which directors/ officers/ shareholders owning 5% or more are involved.
Name of Director/s
Name of Officer/s
Name of Significant Shareholders
Details of Conflict of Interest (Actual or Probable)

None
None
None
(ii) Mechanism
Describe the mechanism laid down to detect, determine and resolve any possible conflict of interest between the company and/or its group and their directors,
officers and significant shareholders.
Directors/Officers/Significant Shareholders
The Corporations Code of Business Conduct and Ethics states the following provisions related to Conflict of Interest :
Company
D. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
61
1.
Avoid any actual or apparent conflicts of interest between your private interest, including the private interest of a member
of your family, and the interests of MPIC, unless you have obtained prior approval by the appropriate approving authorities
as designated in applicable policies of MPIC. Any actual or apparent conflict of interest, and any material transaction or
relationship that could reasonably be expected to give rise to a conflict of interest, should be disclosed to the Corporate
Governance Office.
2.
Avoid activities and interests that could significantly affect the objective or effective performance of duties and
responsibilities in MPIC, including business interests or unauthorized employment outside MPIC, the receipt from and giving
of gifts to persons or entities with whom MPIC relates, as well as insider dealing. \
3.
Be loyal to MPIC. As such, all business decisions and actions must be based on the best interest of MPIC and must not be
motivated by personal considerations and other relationships, which may interfere with the exercise of independent
judgment.
4.
Advance MPICs legitimate interests when the opportunity arises. Avoid competing with MPIC on a business opportunity or
acquiring an interest adverse to that of MPICs. Refrain from taking advantage of Company property, information or position,
or opportunities arising from these, for personal gain, to compete with MPIC, or act against the best interest of MPIC.
Directors, officers and employees who intend to make use of Company property or services in a manner not solely for the
benefit of MPIC should obtain prior approval from appropriate approving authorities as designated in applicable policies of
MPIC.
5.
Refrain from the direct or indirect, grant or arrangements of loans to any director or officer, including loans granted or
arranged by MPICs subsidiaries and affiliates, unless such grant or arrangement is allowed by all applicable laws and
regulations.
The Corporation, as a Parent Company, has a Code of Business Conduct and Ethics stating the following provisions related to
Conflict of Interest :
D. CONFLICTS OF INTEREST AND CORPORATE OPPORTUNITIES
1.
Avoid any actual or apparent conflicts of interest between your private interest, including the private interest of a member
of your family, and the interests of MPIC, unless you have obtained prior approval by the appropriate approving authorities
as designated in applicable policies of MPIC. Any actual or apparent conflict of interest, and any material transaction or
relationship that could reasonably be expected to give rise to a conflict of interest, should be disclosed to the Corporate
Governance Office.
2.
Avoid activities and interests that could significantly affect the objective or effective performance of duties and
responsibilities in MPIC, including business interests or unauthorized employment outside MPIC, the receipt from and giving
of gifts to persons or entities with whom MPIC relates, as well as insider dealing. \
Group
62
3.
Be loyal to MPIC. As such, all business decisions and actions must be based on the best interest of MPIC and must not be
motivated by personal considerations and other relationships, which may interfere with the exercise of independent
judgment.
4.
Advance MPICs legitimate interests when the opportunity arises. Avoid competing with MPIC on a business opportunity or
acquiring an interest adverse to that of MPICs. Refrain from taking advantage of Company property, information or position,
or opportunities arising from these, for personal gain, to compete with MPIC, or act against the best interest of MPIC.
Directors, officers and employees who intend to make use of Company property or services in a manner not solely for the
benefit of MPIC should obtain prior approval from appropriate approving authorities as designated in applicable policies of
MPIC.
Refrain from the direct or indirect, grant or arrangements of loans to any director or officer, including loans granted or arranged
by MPICs subsidiaries and affiliates, unless such grant or arrangement is allowed by all applicable laws and regulations.
5.
FAMILY, COMMERCIAL AND CONTRACTUAL RELATIONS

4
(a) Indicate, if applicable, any relation of a family, commercial, contractual or business nature that exists between the holders of significant equity (5% or more), to the
extent that they are known to the company:
The Corporation has not had any transaction during the last two (2) years in which any Director or Executive Officer or any of their immediate family members, or
relations of commercial, contractual or business nature, had a direct or indirect interest.
Names of Related Significant Shareholders
None
Type of Relationship
None
Brief Description of the Relationship

None
(b) Indicate, if applicable, any relation of a commercial, contractual or business nature that exists between the holders of significant equity (5% or more) and the
company:
The Corporation has not had any transaction during the last two (2) years in which any Director or Executive Officer or any relations of commercial, contractual or
business nature, had a direct or indirect interest.
Names of Related Significant Shareholders

None
4
Type of Relationship
None
Brief Description
None
Family relationship up to the fourth civil degree either by consanguinity or affinity.

63
(c) Indicate any shareholder agreements that may impact on the control, ownership and strategic direction of the company:
Name of Shareholders
None
6.
% of Capital Stock affected (Parties)

None
Brief Description of the Transaction

None
ALTERNATIVE DISPUTE RESOLUTION

Describe the alternative dispute resolution system adopted by the company for the last three (3) years in amicably settling conflicts or differences between the
corporation and its stockholders, and the corporation and third parties, including regulatory authorities.
Corporation &
Stockholders
Corporation & Third
Parties
Corporation &
Regulatory
Authorities
Alternative Dispute Resolution System

The Corporation does not have a formal dispute resolution system set-up to resolve disputes between the Corporation and its Stockholders.
However, it maintains good relationships with its stockholders and attends to the resolution of their concerns and issues, if theres any. Such
opportunity for stockholders to raise their concerns is during the Annual Stockholders Meeting. If such a situation arise, the Corporation may
adopt the Rules of the Philippine Dispute Resolution Center Inc.
The Corporation does not have a formal dispute resolution system set-up to resolve disputes between the Corporation and Third Parties.
However, it maintains good relationships with third parties and resolve concerns and issues amicably. If such a situation arise, the
Corporation may adopt the Rules of the Philippine Dispute Resolution Center Inc.
The Corporation does not have a formal dispute resolution system set-up to resolve disputes between the Corporation and Regulatory
Authorities. However, the Corporation proactively and amicably engages the SEC, PSE and other agencies in resolving issues affecting the
Company and the concerned agencies.
C.
BOARD MEETINGS & ATTENDANCE
1.
SCHEDULE OF MEETINGS
Are Board of Directors meetings scheduled before or at the beginning of the year?
Yes, the schedule of regular board meetings is set at the beginning of the year.
64
2.
DETAILS OF ATTENDANCE OF DIRECTORS

Attendance of Directors
Board
Chairman
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
3.
Name
Jose Ma. K. Lim
David J. Nicol
Ray C. Espinosa
Robert C. Nicholson
Antonio A. Picazo
Edward A. Tortorici
Victorico P. Vargas
Washington Z. SyCip
Edward S. Go
Lydia B. Echauz
Date of
Election
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
30 May 2014
No. of
Meetings Held
during the
year
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
No. of
Meetings
Attended
8
10
10
9
7
6
9
9
9
7
10
9
8
10
10
80%
100%
100%
90%
70%
60%
90%
90%
90%
70%
100%
90%
80%
100%
100%
SEPARATE MEETINGS OF NON-EXECUTIVE DIRECTORS

(a) Do non-executive directors have a separate meeting during the year without the presence of any executive? If yes, how many times?
The Board of Directors agrees that non-executive directors can meet from time to time as they deem necessary.
(b) Is the minimum quorum requirement for Board decisions set at two-thirds of board members? Please explain.
The Corporations By-Laws state that a majority of the number of directors as fixed in the Corporations Articles of Incorporation shall constitute a quorum for the transaction
of corporate business in every decision of at least a majority of the directors present at a meeting at which there is a quorum shall be valid as a corporate act, except for the
election of officers which shall be valid as a corporate act, except for the elections of officers which shall require the vote of a majority of all the members of the Board. This is
in compliance with Section 25 of the Philippine Corporation Code.
The Corporation aims to achieve a 100% attendance in each Board meeting as the directors had confirmed their availability on the scheduled Board meeting dates as agreed
upon at the start of the year. However, due to certain reasons, it can be observed that the average attendance per meeting is at 90%, which is more that 2/3 of the board
members.
65
4.
ACCESS TO INFORMATION
5
(a) How many days in advance are board papers for board of directors meetings provided to the board?
In practice, the Corporation provides its directors the agenda and materials for board and board committee meetings days in advance of the scheduled board or board
committee meeting to provide them with ample time in evaluating and understanding the issues and concerns that will be raised in the meeting.
(b) Do board members have independent access to Management and the Corporate Secretary?
The members of the Board have independent access to Management and the Corporate Secretary. The Revised Manual of Corporate Governance Article (4) Adequate
and Timely Information states the provision below:
To enable the members of the Board to properly fulfill their duties and responsibilities, Management should provide them with complete, adequate and timely
information about the matters to be taken in their meetings.
Reliance on information volunteered by Management would not be sufficient in all circumstances and further inquiries may have to be made by a member of
the Board to enable him to properly perform his duties and responsibilities. Hence, the members should be given independent access to Management and the
Corporate Secretary.
(c) State the policy of the role of the company secretary. Does such role include assisting the Chairman in preparing the board agenda, facilitating training of directors,
keeping directors updated regarding any relevant statutory and regulatory changes, etc?
According to the Corporations By-Laws, the Corporate Secretary shall be the custodian of and shall maintain the corporate books and record and shall be the recorder of
the Corporations formal actions and transactions.
The Corporate secretary shall have the following specific roles and duties: (a) to record or see the proper recording of the minutes and transactions of all meetings of the
directors and the stockholders and to maintain minute books of such meetings in the form and manner required by the law; (b) to keep or cause to be kept record books
showing the details required by law with respect to the stock certificates if the Corporation, including ledgers and transfer books showing all shares of the Corporation
subscribed, issued and transferred; (c) to keep the corporate seal and affix it in all papers and documents requiring seal, and to attest by his signature all corporate
documents requiring the same; (d) to attend to the giving and serving of all notices of the Corporation required by law or the By-Laws to be given; (e) to certify to such
corporate acts, countersign corporate documents or certificates, and make reports or statements as may be required of him by law or by government rules and
regulations; (f) to act as the inspector at the election of directors and, as such, to determine the number of shares of stocks outstanding and entitled to vote, the shares
of stocks represented at the meeting, the existence of a quorum, the validity and effect of proxies, and to receive votes, ballots, or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are
proper to conduct the election or vote. The Secretary may assign the exercise or performance of any of the forgoing duties, powers and functions to any other person or
5
Board papers consist of complete and adequate information about the matters to be taken in the board meeting. Information includes the background or explanation on matters brought before the Board, disclosures,
budgets, forecasts and internal financial documents.
66
persons, subject always to his supervision and control; and (g) to perform such duties as are incident to his office or as may be assigned by the Board of Directors or the
President.
The Revised Manual of Corporate Governance on the other hand states the following roles, duties and qualifications of the Corporate Secretary: (a) be responsible for
the safekeeping and preservation of integrity of the minutes of the meetings of the Board and its committees, as well as the other official records of the corporation; (b)
be loyal to the mission, vision and objectives of the corporation; (c) work fairly and objectively with the Board, Management and stockholders; (d) have appropriate
administrative and interpersonal skills; (e) if he is not at the same time the corporate legal counsel, be aware of the laws, rules and regulations necessary in the
performance of his duties and responsibilities; (f) have a working knowledge of the operations of the corporation; (g) inform the members of the Board, in accordance
with the By-Laws, of the agenda of their meetings and ensure that the members have before them accurate information that will enable them to arrive at intelligent
decisions on matters that require their approval; (h) attend all Board meetings, except when justifiable causes, such as illness, death in the immediate family and serious
accidents, prevent him from doing so; (i) ensure that all Board procedures, rules and regulations are strictly followed by the members; and (j) if he is the Compliance
Officer, perform all duties and responsibilities of the said officer as provided for in the Code.
In practice, the facilitation of the trainings for the directors, specifically on Corporate Governance matters, is done as a function of the Compliance Officer. The
Corporations group of companies conducts various corporate governance trainings and seminars, through third party facilitators, to equip its directors and officers on
the relevant corporate governance best practices.
(d) Is the company secretary trained in legal, accountancy or company secretarial practices? Please explain should the answer be in the negative.
The Corporate Secretary, Mr. Antonio A. Picazo, is a well trained Legal and corporate secretarial practitioner. Mr. Picazo is currently the Managing 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. Mr. Picazo obtained his Bachelor of Laws degree from the University of the Philippines and passed the 1964 Philippine Bar
Examinations with the 5th highest rating. In 1967, he obtained a Master of Laws degree, Major in Taxation from the University of Pennsylvania.
(e) Committee Procedures
Disclose whether there is a procedure that Directors can avail of to enable them to get information necessary to be able to prepare in advance for the meetings of
different committees:
Yes
Committee
Executive
No
Details of the procedures

The Revised Manual of Corporate Governance Article (4) Adequate and Timely Information states the provision below:
To enable the members of the Board to properly fulfill their duties and responsibilities, Management should provide them with complete,
adequate and timely information about the matters to be taken in their meetings.
Reliance on information volunteered by Management would not be sufficient in all circumstances and further inquiries may have to be made by
a member of the Board to enable him to properly perform his duties and responsibilities. Hence, the members should be given independence
67
access to Management and the Corporate Secretary.

The information may include the background or explanation of matters brought before the Board, disclosures, budgets, forecasts and internal
financial documents.
The members, either individually or as a Board, in the furtherance of their duties and responsibilities, should have access to independent
professional advice at the corporations expense.
Audit and Risk

Management
a member of the Board to enable him to properly perform his duties and responsibilities. Hence, the members should be given independent
Nomination
Compensation
68
Governance
5.
EXTERNAL ADVICE
Indicate whether or not a procedure exists whereby directors can receive external advice and, if so, provide details:
Procedures
The procedure stating
that the directors can
receive external advice is
stated in the Revised
Manual of Corporate
Governance Article (4)
Adequate and Timely
Details
To enable the members of the Board to properly fulfill their duties and responsibilities, Management should provide them with
complete, adequate and timely information about the matters to be taken in their meetings.
Reliance on information volunteered by Management would not be sufficient in all circumstances and further inquiries may have to be
made by a member of the Board to enable him to properly perform his duties and responsibilities. Hence, the members should be given
69
Information.
independent access to Management and the Corporate Secretary.

The information may include the background or explanation of matters brought before the Board, disclosures, budgets, forecasts and
internal financial documents.
The members, either individually or as a Board, in the furtherance of their duties and responsibilities, should have access to
independent professional advice at the corporations expense.
6.
CHANGE/S IN EXISTING POLICIES

Indicate, if applicable, any change/s introduced by the Board of Directors (during its most recent term) on existing policies that may have an effect on the business of
the company and the reason/s for the change:
Existing Policies
Changes
Reason
--
--
--
D. REMUNERATION MATTERS
1.
REMUNERATION PROCESS
Disclose the process used for determining the remuneration of the CEO and the four (4) most highly compensated management officers:
The Corporations executive officers are covered by standard employment contracts and employees retirement plan and can be terminated upon appropriate notice. The
following are the procedures followed by the Corporation:
Process
(1) Fixed remuneration
(2) Variable remuneration
CEO
Remuneration of the Corporations CEO is positioned in the top
quartile of Industry figures based on the market data obtained
from Tower Watsons, a world-leader in Human Resource
th
consultancy. The fixed remuneration also includes a 13 month
pay as required by Law.
The Corporations Long Term Incentive Plan (LTIP) is aimed at
providing a competitive level of financial incentives for eligible
employees to encourage them to achieve performance targets
consistently. The amount of LTIP is fixed upon achievement of the
target Core Income and is not affected by changes in future
Top 4 Highest Paid Management Officers

Remuneration of the Corporations top executives is positioned in the
top quartile of Industry figures based on the market data obtained
from Tower Watsons, a world-leader in Human Resource consultancy.
th
The fixed remuneration also includes a 13 month pay as required by
Law.
The Corporations Long Term Incentive Plan (LTIP) is aimed at
providing a competitive level of financial incentives for eligible
employees to encourage them to achieve performance targets
consistently. The amount of LTIP is fixed upon achievement of the
target Core Income and is not affected by changes in future salaries of
70
(3) Per diem allowance

(4) Bonus
(5) Stock Options and
other financial
instruments
2.
salaries of the employees covered. The LTIP is composed of a cash

pay-out and an ESOP. The ESOP is 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 Corporation does not provide per diem allowance to CEO for
attending Regular and Special Board, and Board Committee
meetings.
The CEO receives variable bonuses depending on the performance
of the Corporation for the year.
the employees covered. The LTIP is composed of a cash pay-out and

an ESOP. The ESOP is for eligible executives to receive remuneration
in the form of share-based payment transactions, whereby executives
render services in exchange for the share option.
Stock options are included in the Corporations Long Term

Incentive Plan (LTIP).
Stock options are included in the Corporations Long Term Incentive

Plan (LTIP).
The Corporation does not provide per diem allowance to its four
highly compensated officers for attending Regular and Special Board,
and Board Committee meetings.
The Corporations executives receive variable bonuses depending on
the performance of the Corporation for the year.
REMUNERATION POLICY AND STRUCTURE FOR DIRECTORS

(a) Remuneration Policy and Structure for Executive and Non-Executive Directors
Disclose the companys policy on remuneration and the structure of its compensation package. Explain how the compensation of Executive and Non-Executive Directors
is calculated.
Except as aggregately disclosed in the section below none of the Directors and Executive Officers is covered by a special compensatory plan or arrangement, nor do any of
them hold any outstanding warrants or options in respect of the Corporation or its shares.
The Corporations By Laws provide that, additionally, an amount equivalent to 1 percent (1%) of net profit after tax shall be allocated and distributed amongst the directors of
the Corporation who are not officers thereof or of any of its subsidiaries or affiliates, in such manner as the Board may deem proper. There are no other special
arrangements pursuant to which any director was compensated.
Executive
Directors
Remuneration Policy
Remuneration of the Companys top executives is
positioned in the top quartile of Industry figures
based on the market data obtained from Tower
Watsons, a world-leader in Human Resource
consultancy.
Structure of Compensation Packages

The Company provides its executives with 13 months
guaranteed basic pay, a variable bonus, and a Long
Term Incentive Plan (LTIP).
How Compensation is Calculated

The compensation of the Companys
executives is computed based on Market/
Industry Practice.
71
Non-Executive
Directors
Non-Executive directors do not receive any

remuneration aside from the diem allowance for
each attendance in Board and Board Committee
meetings.
Non-executive Directors are entitled to a per diem

allowance of Php50,000 for each attendance in MPICs
Regular Board meetings; Php30,000 for Special Board
meetings; and Php30,000 for Board Committee
Meetings.
As per the Companys By-Laws, the

amount of per diem allowance may be
fixed by the Board of Directors or by
resolution of the stockholders.
(b) Do stockholders have the opportunity to approve the decision on total remuneration (fees, allowances, benefits-in-kind and other emoluments) of board of
directors? Provide details for the last three (3) years.
The Corporations By-Laws, which was approved by the stockholders, states that: Each director of the Corporation shall receive per diem allowance for his attendance at
each meeting of the Board, in such amount as may be fixed by the Board or by resolution of the stockholders. Additionally, an amount equivalent to 1 percent (1%) of net
profit after tax shall be allocated and distributed amongst the directors of the Company who are not officers thereof or of any of its subsidiaries or affiliates, in such manner
as the Board may deem proper.
3.
Remuneration Scheme
Date of
Stockholders Approval
AGGREGATE REMUNERATION
Complete the following table on the aggregate remuneration accrued during the most recent year:
The annual remuneration of the directors amounted to Php 3.8 million, Php 7.0 million and Php 8.2 million in 2014, 2013 and 2012, respectively.
Non-executive directors are entitled to a per diem allowance of Php 50,000 for each attendance in the Companys Board meetings; and Php 30,000 for each attendance in
Special Board and Board Committee meetings. The Companys By-Laws provide that an amount equivalent to 1.0% of net profit after tax of the Company shall be allocated
and distributed among the directors of the Company who are not officers of the Company or its subsidiaries and affiliates, in such manner as the Board may deem proper. No
accruals were made with respect to this scheme for the years ended December 31, 2014, 2013 and 2012 in the absence of resolution from the Board. There are no other
special arrangements pursuant to which any director will be compensated.
The aggregate compensation for 2014 of the Chairman and the four most highly compensated management officers, including the CEO and the CFO, is shown below (in Php).
Process
(1) Fixed remuneration
(2) Variable remuneration
(3) Per diem allowance
Chairman
Top 4 Highest Paid Management Officers

Php 97,864,529
Pay-out for LTIP Cycle 2012-2015 is in 2016
The Corporation does not provide per diem allowance to executive directors.
72
(4) Bonuses
(5) Stock Options and other financial Instruments
(6) Others (specify)
Php 107,715,641
6.25 million options exercised in 2014.
--
* The aggregated number of options presented includes those awarded to the directors and officers of the Company.
(a)
(b)
(c)
(d)
(e)
(f)
1)
2)
3)
(d)
(e)
(f)
(g)
(h)
4.
Remuneration Item
Executive Directors
Fixed Remuneration
Variable Remuneration
Per diem Allowance
Bonuses
Stock Options and/or other financial instruments
Others (Specify)
Total
(Please see above table)

Other Benefits
Executive Directors
Advances
Credit granted
Pension Plan/s Contributions
Pension Plans, Obligations incurred
Life Insurance Premium
Hospitalization Plan
Car Plan
Others (Specify)
Total

Non-Executive Directors (other

than independent directors)
Non-Executive Director (other
than independent directors)
Independent Directors
Independent Directors
STOCK RIGHTS, OPTIONS AND WARRANTS

(a) Board of Directors
Complete the following table, on the members of the companys Board of Directors who own or are entitled to stock rights, options or warrants over the companys
shares:
Except as disclosed in Item 2 above, none of the aforementioned Directors are covered by a special compensatory plan or arrangement, nor do any of them hold any
outstanding warrants or options in respect of the Corporation or its shares.
73
Directors Name
Number of Direct Option/

Rights/Warrants
Number of Indirect Option/

Rights/Warrants
Number of Equivalent Shares
Total % from Capital Stock
None
None
None
None
None
(b) Amendments of Incentive Programs

Indicate any amendments and discontinuation of any incentive programs introduced, including the criteria used in the creation of the program. Disclose whether
these are subject to approval during the Annual Stockholders Meeting:
The Corporation has done no amendments and discontinuation of any incentive programs, such as the Long-Term Incentive Plan, within year 2014.
The Corporations LTIP is aimed at providing a competitive level of financial incentives for eligible employees to encourage them to achieve performance targets
consistent with Corporations long-term business plans; recognizing and rewarding the contribution of eligible employees to the overall profitability and performance of
the Corporation; and attracting and retaining talented employees to ensure the sustained growth and success of the Corporation.
Incentive Program
None
5.
Amendments
None
Date of Stockholders Approval

None
REMUNERATION OF MANAGEMENT
Identify the five (5) members of management who are not at the same time executive directors and indicate the total remuneration received during the financial year:
The aggregate remuneration received by the top five (5) members of management and other officers of the Corporation in 2014 is shown in the table below.
Name of Officer/Position
Jose Ma. K. Lim
David J. Nicol
All Other Directors and Officers as a group excluding the abovenamed officers
Total Remuneration
Php 205,580,170
Php 165,718,478
74
E.
BOARD COMMITTEES
1.
NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES

Provide details on the number of members of each committee, its functions, key responsibilities and the power/authority delegated to it by the Board:
Committee
Executive
Director
(ED)
No. of Members
NonIndependent
executive
Director
Director
(ID)
(NED)
Committee Charter
Functions
Key Responsibilities
Power
Corporations By-Laws
Article III, Section 10, Executive Committee
Executive
None*
None*
None*
An executive Committee is hereby created which may be organized from time to time upon the determination of the
Board of Directors. The Committee shall be composed of not less than three (3) members, which shall include the
President. The Board shall have the power at anytime to remove and replace the members of, and fill vacancies, in the
Executive Committee.
The Executive Committee, when the Board is not in session, shall have and may exercise the powers of the Board in the
management of the business and affairs of the Corporation, except with respect to: (1) approval of any action for which
stockholders approval is also required; (2) the filing of vacancies in the Board; (3) the amendment or repeal of these
By-Laws or the adoption of new By-Laws; (4) the amendment or repeal of any resolution of the Board which by it
express terms is not so amenable or repealable; (5) a distribution of dividends to the stockholders; (6) such other
matters as may be specifically excluded or limited to the Board.
Section 1. Basis and Purpose
The Revised Manual on Corporate Governance (the Governance Manual) of Metro Pacific Investments Corporation
(the Corporation) provides that its Board shall constitute, among others, an Audit Committee to assist it in good
corporate governance.
Audit and Risk

Management
The purpose of the Audit and Risk Management Committee (the Committee") is to assist the Board of Directors in
fulfilling its oversight responsibilities over the following:
a.
b.
c.
d.
e.
the Corporation's financial statements and reporting system;

the Corporation's compliance with legal and regulatory requirements;
the external auditor's qualifications, independence, and performance;
the performance of the Corporation's internal audit function and internal auditors;
risk management policy and execution; and
75
f.
the business practices and ethical standards of the Corporation.
Section 2. Structure and Membership

2.1 Composition. The members of the Committee shall be appointed by the Board of Directors. The Committee shall
be composed of at least three (3) Board members (the Members), preferably with accounting and finance
background. The Chairman of the Committee shall be an independent director and one member shall have
related audit experience as defined by the Securities and Exchange Commission (SEC). An independent director
is one who is independent of management and who, apart from his fees and shareholdings, is free from any
business or other relationship which could materially interfere with the exercise of his independent judgment.
The Board may appoint one or more persons to serve as advisor(s) (Adviser) to the Committee. Advisors shall
have the right to attend and speak at any meeting of the Committee but shall have no right to vote on any action
of the Committee.
In addition to the qualifications required for election as director of the Corporation provided under the
Corporation's By-Laws and Governance Manual, the Members of the Committee shall preferably have
accounting and finance backgrounds, one of whom shall be an independent director and another shall have
audit experience.
The Members shall be disqualified for any of the grounds for disqualification of a director provided under the
Corporation's Governance Manual, the Corporation Code of the Philippines, Securities Regulation Code and its
Implementing Rules and Regulations, and other relevant laws, rules and regulations of the Securities and
Exchange Commission.
The Chairman or any member or advisor of the Committee may be removed and replaced only by the Board.
2.2 Appointment. The Chairman and members of the Committee shall be appointed by, and removed from office,
only by the Board. In case of vacancy in the Committee, the Board shall appoint a new Committee member from
among the directors.
2.3 Committee Secretary. The Committee shall appoint a Committee Secretary who shall prepare the minutes of the
meetings and keep the records of the Committee.
Section 3. Meetings and Procedures
3.1 Meetings, Quorum and Voting. The Committee shall meet at least once every quarter or more frequently as
circumstances require. During these meetings, the Committee may meet privately with senior management, the
external auditors, or as a Committee to discuss any matters that need to be discussed.
76
The time and place of the meetings and procedures at such meetings shall be determined by the Committee. A
majority of the members of the Committee shall constitute a quorum provided an Independent Director is
present (unless he has been duly notified but deliberately and without justifiable cause fails to attend the
meeting).
3.2 Meeting through Teleconference, Video Conference or Similar Means. Members and Advisors may participate in
any meetings of the Committee through teleconference, video conference or other similar means, provided that
all persons participating in the meeting can hear each other.
3.3 Notices. Notices of the meetings of the Committee shall be sent to the Members and Advisors by personal
delivery, mail, facsimile, electronic mail or other similar means at least two (2) days prior to the meeting and
specifying the place, date and time of the meeting, as well as the matters to be discussed during the meeting.
For this purpose, the Committee Secretary shall obtain the addresses, facsimile numbers and electronic mail
addresses of each Member and Advisor where notices of meetings may be sent.
3.4 Remuneration. No fees or other remuneration shall be payable to the members and advisors of the Committee
for services provided or attendance to Committee meetings, except fees or remuneration authorized and
approved by the Board. No fees or compensation shall be paid directly or indirectly to any member of the
committee as consultant or legal or financial Advisor or to such member's firm for such consulting or advisory
services even if such member is not the actual service provider.
Section 4. Functions and Responsibilities
The Committee's specific duties and responsibilities are as follows:
4.1 On External Auditors:
a)
Review and evaluate the qualifications, performance and independence of the external auditors and the lead
partner.
b) Select and appoint the external auditors and remove or replace the external auditors as it may deem
necessary.
c) Discuss with the external auditor before the audit commences the nature and scope of the audit.
d) Review and approve the fees charged by the external auditor for audit and non-audit services.
e) Evaluate and determine non-audit work by external auditor and keep under review the non-audit fees paid to
the external auditor in relation to their significance to the auditor.
f) Ensure that the external auditor or the lead, engagement, or handling partner having primary responsibility
for the audit or review of the Corporation is rotated at least once every five (5) years.
77
4.2 On Financial Statements:

a)
Review and discuss with management and the external auditor the Corporation's quarterly, half-year, and
annual financial statements before submission to the Board, focusing particularly on the following:
Critical accounting policies and practices to be used.
Major financial reporting issues and judgments made.
Significant adjustments resulting from the audit.
Unusual or complex transactions.
Going concern assumption.
Compliance with accounting standards.
Compliance with tax, legal, and stock exchange requirements.
b) Review interim financial reports, with management and the external auditors, before filing with regulators and
consider whether these are complete and consistent with the information known to the Committee.
c) Evaluate relationship that senior management, financial management, external auditors, and internal auditors
have to ensure accurate and timely financial reporting.
d) Resolve any disagreement between management and the external auditors regarding financial reporting.
e) Review the management representation letter to the external auditor.
4.3 On Internal Audit Function:
a) Review the appointment and replacement of the internal auditor.
b) Review and approve the Internal Audit Charter and annual audit plan.
c) Review the significant issues raised in internal audit reports to management and management's responses and
ensure appropriate corrective actions are undertaken.
d) Review the effectiveness of the internal audit function, its budget and staffing, and compliance with the
Standards for the Professional Practice of Internal Auditing.
e) Ensure the Internal Auditor is given full and unrestricted access to all company records, properties and
personnel relevant to the internal audit activity.
f) Establish direct functional reporting of the internal auditor to the Audit Committee to allow it to effectively
fulfill its responsibilities.
g) Require the internal auditor to render to the Committee an annual report on the activities and performance of
the internal audit organization relative to the audit plan approved by the Committee, including significant risk
exposures and control issues, corporate governance issues, and other matters requested by the Committee.
4.4 On Internal Controls:
a)
Appoint and designate an Internal auditor

78
b) Review with the Corporation's management and the Internal auditors findings on the adequacy and
effectiveness of internal controls and their recommendations for improving the internal control environment,
including information technology security and controls.
c) Review the adequacy of the Corporation's system of internal control over financial reporting including the
reliability of its financial reporting systems.
4.5 On Legal, Regulatory, and Ethical Standards Compliance:
a)
Monitor compliance and adherence by the Corporation to all Board policies as well as applicable laws, rules
and regulations covering the conduct of its operations and business activities.
b) Review reports and findings of any examinations by regulatory agencies and ensure appropriate and timely
corrective action by management.
c) Review and oversee related party transactions and other potential conflicts of interest situations where
appropriate considering that the Corporation is a public service firm subject to regulatory scrutiny and public
perception.
d) Evaluate and monitor compliance with Code of Ethics for management.
e) Review Whistle Blowing Policy.
4.6 On Risk Management:
a)
b)
c)
d)
Appoint or designate a Chief Risk Officer.

Discuss with management policies with respect to risk assessment and risk management.
Inquire on major risk exposures and the steps management has taken to monitor and control such exposures.
Review Business Continuity Plan.
4.7 On Reporting
Report regularly to the Board of Directors about committee activities, issues, and any related recommendations.
Section 5. Powers of the Committee
The Committee has authority to conduct or authorize investigations into any matters within its scope of responsibility.
It is empowered to:
a)
Retain external legal counsel, accountants, or other advisors to advise the Committee or assist in the conduct
of an investigation.
b) Seek information it requires from employees - all of whom are directed to cooperate with the Committee's
requests - or external parties.
c) Appoint or replace the external auditors and pre-approve all auditing and non-auditing services (including the
79
fees and terms thereof) to be provided by independent auditors.

d) Meet with Company Officers, external auditors or outside counsel, as necessary.
e) Obtain appropriate funding and resources necessary to carry out its duties and responsibilities.
The Nomination Committee, which may be composed of at least three (3) members and one of whom should be an
independent director, to review and evaluate the qualifications of all persons nominated to the Board and other
appointments that require Board approval, and to assess the effectiveness of the Boards processes and procedures in
the election or replacement of director.
Corporation By-Laws
Article III, Section 3, Election and Term
Nomination
1**
2
A nomination committee is hereby created which may be organized from time to time upon determination of the
Board of Directors. The nomination committee shall be composed of at least three (3) members, one of whom shall be
an independent director. The nomination committee shall have the following functions: (A) formulate screening
policies to enable the committee to effectively review the qualification of the nominees for independent directors; and
(B) conduct nominations for independent directors prior to the stockholders meeting in accordance with the
procedures set forth in Rule 38 of the Amended Implementing Rules and Regulations of the Securities Regulation Code,
as the same may be amended from time to time.
The Compensation or Remuneration Committee, which may be composed of at least three (3) members and one of
whom should be an independent director, to establish a formal and transparent procedure for developing a policy on
remuneration of directors and officers to ensure that their compensation is consistent with the corporation's culture,
strategy and the business environment in which it operates.
Corporation By-Laws
Article III, Section 11, Compensation and Remuneration Committee
Compensation
A compensation and remuneration committee is hereby created which may be organized from time to time upon
determination of the Board of Directors. The compensation and remuneration committee shall be composed of at least
three (3) members, one of whom shall be an independent director. The compensation and remuneration committee
shall have the following functions: (A) establish a formal and transparent procedure for developing policy on executive
remuneration and for fixing the remuneration packages of corporate officers and directors, and provide oversight over
remuneration of senior management and other key personnel, ensuring that compensation is consistent with the
Corporations culture, strategy and control environment; (B) designate the amount of remuneration of directors and
officers, which shall be in a sufficient level to attract and retain directors and officers, who are needed to run the
Corporation successfully; (C) establish a formal and transparent procedure for developing policy on executive
remuneration and for transparent procedure for developing a policy on executive remuneration and for fixing
remuneration packages of individual directors, if any, and officers; (D) develop a form on full business interest
disclosure as part of the pre-employment requirements for all incoming officers, which among others, compel all
officers to declare under the penalty of perjury, all their existing business interest or shareholding that may directly of
80
Governance
indirectly conflict in their performance of duties once hired; (E) disallow any director to decide his or her own
remuneration; (F) provide in the Corporations annual reports, information and proxy statement, a clear, concise, and
understandable disclosure of compensation of its executive officers for the previous fiscal year and the ensuing year;
and (G) review of the human resources development or personnel handbook, if any, to strengthen provisions on
conflict of interest, salaries and benefit policies, promotion and career advancement directives and compliance of
personnel concerned with all statutory requirements that must be periodically met in their respective posts, or in the
absence of such human resources development or personnel handbook, cause the development of such, covering the
same parameters of governance as stated above.
Corporate Governance Committee ensures overall governance framework is robust and compares favorably with best
in class practices. The Committee is tasked to develop and oversee the implementation of the Corporations Revised
Manual of Corporate Governance. The Committee has the power to review, endorse to the Board recommendations of
the Compliance officer in relation to violations of provisions and requirements of the Revised Code of Corporate
Governance and other corporate governance rules applicable to the Company, including the Companys Manual of
Corporate Governance and the Code of Business Conduct and Ethics. It is responsible for recommending to the Board
the development of corporate governance principles, structure, best practices and rules for adoption by the Company,
and assists the Board in the implementation thereof. Finally, it has the responsibility of facilitating the assessment of
the Board processes, procedures and performance in line with Corporate Governance practices and metrics.
* The Board finds that there is no need to organize an Executive Committee because all corporate agenda and items for decision are discussed and managed by the Board.
** One (1) executive director is a non-voting member of the Committee.
2.
COMMITTEE MEMBERS
(a)
Executive Committee
The Corporations By-Laws, Article 3, Section 10, Executive Committee states that An executive Committee is hereby created which may be organized from time to time
upon the determination of the Board of Directors. The Committee shall be composed of not less than three (3) members, which shall include the President. The Board shall
have the power at anytime to remove and replace the members of, and fill vacancies, in the Executive Committee. To date, the Board finds that there is no need to organize
an Executive Committee because all corporate agenda and items for decision are discussed and managed by the Board.
Office
Name
Date of
Appointment
Chairman
Member (ED)
Member (NED)
Member (ID)
Member
None
None
None
None
None
None
None
None
None
None
No. of
Meetings
Held
No. of
Meetings
Attended
Length of
Service in
the
Committee
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
81
(b) Audit and Risk Management Committee
Office
Chairman
Member (NED)
Member (ID)
Name
Edward S. Go (ID)
Lydia B. Echauz
Date of
Appointment
May 30, 2014

May 30, 2014
May 30, 2014
No. of
Meetings
Held
No. of
Meetings
Attended
Length of
Service in
the
Committee*
5
5
5
5
5
5
100
100
100
6
4
4
*Number of non-consecutive years as Committee Member since 2008.
i. Disclose the profile or qualifications of the Audit Committee members.

As stated in the Boards Audit and Risk Management Committee Charter, the members of the Committee shall be appointed by the Board of Directors. The Committee
shall be composed of at least three (3) Board members, preferably with accounting and finance background. The Chairman of the committee shall be an independent
director and one member shall have related audit experience as defined by the Securities and Exchange Commission (SEC). An independent director is one who is
independent of management and who, apart from his fees and shareholdings, is free from any form of business or other relationship which could materially interfere
with the exercise of his independent judgment.
In addition to the qualifications required for election as director of the Corporation provided under the Corporation's By-Laws and Governance Manual, the Members of
the Committee shall preferably have accounting and finance backgrounds, one of whom shall be an independent director and another shall have audit experience.
The members shall be disqualified for any of the grounds for disqualification of a director provided under the Corporation's Governance Manual, the Corporation Code of
the Philippines, Securities Regulation Code and its Implementing Rules and Regulations, and other relevant laws, rules and regulations of the Securities and Exchange
Commission.
Below are the profiles of the members of the Audit and Risk Management Committee:
Edward S. Go (Independent Director), Committee Chairman
Edward S. Go currently serves as Chairman of the Board of Hyundai Asia Resources, Inc. and of ASA Philippines Foundation. He is an Independent Director of Metro
Pacific Investments Corporation, PLDT Communications and Energy Ventures, Inc. (PCEV) and Filipino Fund Inc. He is also Chairman of the PLDT Beneficial Trust Fund and
member of the Board of ABC Development Corporation, Mediaquest Holdings, Inc., Mediascape Inc., AB Capital Investment Corporation and Vicsal Investment
Corporation. He 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 Committees of MPIC and PCEV. He
obtained his Bachelor of Arts Degree, magna cum laude, and underwent postgraduate studies at the Ateneo de Manila University, where he currently serves as Chairman
of the Board of Trustees.
Lydia Balatbat-Echauz (Independent Director), Committee Member
82
Lydia Echauz is recently 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 Trustees of a few
organizations, 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 also most distinguished alumna of ADMU, DLSU, and St. Theresas College.
Amado R. Santiago III, Committee Member
Amado R. Santiago III is the Managing Partner of the Santiago & Santiago Law Offices and is engaged in the general practice of law. He specializes in corporate litigation,
which includes corporate rehabilitation proceedings under the Securities and Exchange Commission Rules on Corporate Recovery, Interim Rules of Procedure on
Corporate Rehabilitation and the Rules of Procedure on Corporate Rehabilitation, as well as taxation law. He acts as director, corporate secretary, and/or corporate
counsel of various corporate clients. He graduated from the Ateneo de Manila School of Law in 1992 and passed the Philippines Bar Examinations given in the same year.
He received his degree of Bachelor of Science in Legal Management in 1988 from the Ateneo de Manila University.
ii. Describe the Audit Committees responsibility relative to the external auditor.
The Audit and Risk Management Committee's specific duties and responsibilities in relation to the External Auditors are as follows:
a. Review and evaluate the qualifications, performance and independence of the external auditor and the lead partner;
b. Select and appoint the external auditors and remove or replace the external auditors as it may deem necessary;
c. Discuss with the external auditor before the audit commences the nature and scope of the audit;
d. Review and approve the fees charged by the external auditor for audit and non-audit services;
e. Evaluate and determine non-audit work by external auditor and keep under review the non-audit fees paid to the external auditor in relation to their significance to
the auditor; and
f. Ensure that the external auditor or the lead, engagement, or handling partner having primary responsibility for the audit or review of the Corporation is rotated at
least once every five (5) years.
(c) Nomination Committee
Office
Chairman
Member (ED)
Member (ID)
Member
Name
Edward S. Go (ID)
Robert C. Nicholson
Lydia B. Echauz
Jose Ma. K. Lim
(ED / Non-Voting)
No. of
Meetings
Held
No. of
Meetings
Attended
Length of
Service in
the
Committee*
May 30, 2014

May 30, 2014
May 30, 2014
1
1
1
1
1
1
100
100
100
6
3
4
May 30, 2014
100
Date of
Appointment
83
(d) Compensation Committee
Office
Chairman
Member (NED)
Member (ID)
Date of
Appointment
Name
Lydia B. Echauz (ID)

Edward S. Go
May 30, 2014

May 30, 2014
May 30, 2014
No. of
Meetings
Held
No. of
Meetings
Attended
Length of
Service in
the
Committee*
1
1
1
1
1
1
100
100
100
4
4
6
(e) Governance Committee

Provide the same information on all other committees constituted by the Board of Directors:
Date of
Appointment
Office
Name
Chairman
Member (NED)
Member (ID)
Artemio V. Panganiban (ID)

Edward S. Go
May 30, 2014

May 30, 2014
May 30, 2014
No. of
Meetings
Held
No. of
Meetings
Attended
Length of
Service in
the
Committee*
2
2
2
2
2
2
100
100
100
6
3
4
3.
CHANGES IN COMMITTEE MEMBERS

Indicate any changes in committee membership that occurred during the year and the reason for the changes:
There were no changes in the committee memberships in the past year after the appointment of the members during last year's Organization Meeting.
Name of Committee
Executive
Audit
Nomination
Compensation
Governance
Name
Reason
None
None
None
None
None
None
None
None
None
None
84
4.
WORK DONE AND ISSUES ADDRESSED

Describe the work done by each committee and the significant issues addressed during the recent years.
Name of Committee
Executive
Audit
Nomination
Compensation
Work Done
Not Applicable
The Audit and Risk Management Committee accomplished the following:
Reviewed and approved all audit and review services provided by the external auditor to
MPIC, and the related fees for such services;
Discussed with the external auditor the matters required to be discussed by the prevailing
applicable Auditing Standard, and the committee has received written disclosures and the
letter from the external auditor as required by the prevailing applicable Independence
Standards (Statement as to Independence) and have discussed with external auditor its
independence from the MPIC Group and MPIC Groups management;
Approved the creation of the Internal Audit Office and the appointment of the Internal
Auditor;
Together with Management and with the Internal Auditor, conducted a review of the
effectiveness of the Company's internal control systems;In the performance of its
oversight responsibilities, the Committee have reviewed and discussed the audited
financial statements of MPIC Group with the MPIC Groups management, which has the
primary responsibility for the financial statements, and with the external auditor, the
MPIC Groups independent auditor, who is responsible for expressing an opinion on the
conformity of the MPIC Groups audited financial statements with Philippine Financial
Reporting Standards (PFRS);
Approved and endorsed to the Board, which subsequently approved, the Whistle Blower
Policy;
The Nomination Committee is responsible for vetting and recommending members for
nomination to the Board of Directors, including membership in the various Board
Committees. In 2011, the committee recommended Victorico P. Vargas and Washington Sycip
for nomination to the Board of Directors. During the same year, the committee recommended
the appointment of Alberto G. Romulo and Alfred A. Xerez-Burgos as Board Advisers.
As a result of the nomination and election of Washington Sycip to the Board of Directors, we
have increased the number of independent directors to four from three in the prior year.
The Compensation Committee directly oversees compensation and benefits packages of
senior executives of the company. Periodic meetings are conducted by the committee to
review current and proposed compensation structure and benefits package of senior
executives. It is the role of the committee to ensure that the senior executives are fairly
Issues Addressed
Not Applicable
All audit and review services provided by

the external auditor and related fees;
Amendment of the Audit and Risk
Management Charter;
Matters required to be discussed on
applicable Auditing Standard;
Creation of the Internal Audit Office and the
appointment of the Internal Auditor;
Review of the audited financial statements
of MPIC Group as of and for the year ended
December 31, 2012; and
The Companys Whistle Blower Policy.
Nomination and screening of nominees to

the Board of Directors.
Compensation and incentive framework.

85
compensated as well as to ensure the correctness and the appropriateness of all

compensation and benefits provided to its senior executives.
The Governance Committee ensures overall governance framework is robust and compares
favorably with best in class practices. The committee proposed the Revised Manual on
Corporate Governance to the Board of Directors, which was adopted by the Board on the
same date, on 3 March 2011. The Revised Manual was formulated to address gaps in the
process used to implement our Corporate Governance framework.
The Governance Committee supported the Corporation in joining various Corporate
Governance groups, through the Corporate Governance Officer, the Institute of Corporate
Directors (ICD) and the Ethics and Compliance Officers Association (ECOA). These institutions
regularly meet to discuss current best practices and conduct seminars on developments in
Corporate Governance. In addition, the committee supported the Corporations employees in
attending various seminars on governance throughout the year in order to expand their
knowledge of past misdeeds and potential pitfalls in order to better prepare for any
eventuality.
Governance
Through these efforts, the Corporation received the following awards:

1. Finance Asia (April 2014) 10th Best Managed Companies in the
Philippines, 6th Best in Corporate Governance and 3rd Best in Investor Relations
2. IR Magazine (December 2013) - 2nd Place for Grand Prix for Best Overall Investor
Relations Small or Mid-cap; 2nd Place for Best Investor Relations by a Philippine
Company; 2nd Place for Best Investor Relations by a CFO; 3rd Place for Best Investor
Relations for Diversified Industrials / Conglomerates
3. The Asset (November 2013) Gold Award for Excellence in Management and
Corporate Governance
4. Institutional Investor (July 2013) - All Asia Executive Team: Conglomerates Sector 1st
place for Best CFO
5. Corporate Governance Asia (December 2012) Asias Best CEO; Asias Best CFO; and
Best Investor Relations Website
6. Institutional Investor (June 2012) All Asia Executive Team; Conglomerates Sector
1st place for Best CFO and IR Professional; 2nd place for Best Investor Relations
7. Asia Money (January 2012) - #1 for Investor Relations in the Philippines and #2 for
disclosure and transparency in the Philippines
Companys compliance to the regulatory

requirements on Corporate Governance.
Continuous support, membership, and
participation to various CG groups.
86
8.
COMMITTEE PROGRAM
Provide a list of programs that each committee plans to undertake to address relevant issues in the improvement or enforcement of effective governance for the coming
year.
Name of Committee
Executive
Audit
Planned Programs
Issues to be Addressed
Not Applicable
Review and approval of all audit and review
services provided by the external auditor to
MPIC, and the related fees for such services;
Discussion with the external auditor the
matters required to be discussed by the
prevailing applicable Auditing Standard,
Reviewed the audited financial statements of
MPIC Group
Nomination
Vetting and recommending members for

nomination to the Board of Directors, including
membership in the various Board Committees.
Compensation
Governance
Oversee compensation and bonus of senior

executives and overall compensation
framework for all employees.
Ensure bonus targets are set aggressively and
management is motivated for the long term.
Development of related Corporate Governance
Policies and Board Committee Charters.
Continuous review and monitoring of the
Corporations Corporate Governance
Scorecard.
Oversee compliance to regulatory
requirements on Corporate Governance.
Not Applicable
All audit and review services provided by the external auditor and related fees;
Matters required to be discussed on applicable Auditing Standard; and
Review of the audited financial statements of MPIC Group as of and for the year.
Internal udit plan for the year normally covering the following:
o Preparation and approval of internal audit manual
o Includes review of policies and procedures, validation/test for compliance and
critical risks identification
o Business planning and consolidation process
o Identification of coordination activities with Internal Auditors of various
subsidiaries and affiliates
Promulgate the guidelines or criteria to govern the conduct of the nomination for
directors;
Pre-screen the qualifications and prepare a final list of all candidates and put in
place screening policies and parameters to enable it to effectively review the
qualifications of the nominees for directors;
Prepare a Final List of Candidates which shall contain all the information about all
the nominees for directors; and
Recommend members for nomination to the Board, including membership in the
various Board Committees.
Oversee compensation and bonus of senior executives and overall compensation

framework for all employees.
Development of supporting Corporate Governance Policies.

Development/Review of Board Committee Charters.
Assessment of the Corporations Corporate Governance Scorecard.
Compliance to regulatory requirements on Corporate Governance such as (1) the
Annual Corporate Governance Report (ACGR); (2) PSE Guidebook Compliance; (3)
ASEAN Corporate Governance Scorecard; (4) the Certificate of Compliance to SECs
Revised Manual of Corporate Governance; and SEC/PSE Regulator Disclosures.
87
F.
RISK MANAGEMENT SYSTEM
1.
STATEMENT ON EFFECTIVENESS OF RISK MANAGEMENT SYSTEM

Disclose the following:
(a) Overall risk management philosophy of the company;
As an investment and management company, Metro Pacific Investments Corporation (MPIC) undertakes risk management at a number of distinct levels:
1. On entering new investments
2. On- going management of the financial stability of the holding company itself; and
3. Within the operating company investments.
(b) A statement that the directors have reviewed the effectiveness of the risk management system and commenting on the adequacy thereof;
As disclosed in the Corporations Annual Report, the Board reviews the Risk profile of the Company as well as its portfolio investments. The Corporation made the process
more robust by incorporating the review process under the aegis of the renamed Audit and Risk Management Committee. In addition, the Corporation has bolstered its
internal audit function with the ratification of an Internal Audit Charter that institutionalizes the guidelines for the internal audit function.
The Boards Audit and Risk Management Committee has established the policies and procedures surrounding risk management and is overseeing its successful
implementation via oversight of the Chief Risk Officer. The risks reviewed are those associated with entering new investments; ongoing management of the financial stability
of the holding company itself; and those within the operating company investments.
(c) Period covered by the review;
The period covered by the review is year 2014.
(d) How often the risk management system is reviewed and the directors criteria for assessing its effectiveness; and
The risk management system is reviewed annually.
(e) Where no review was conducted during the year, an explanation why not.
Not Applicable.
88
2.
RISK POLICY
(a) Company
Give a general description of the companys risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along
with the objective behind the policy for each kind of risk:
The Corporations Risk Management Policy contains the following provisions:
Risk Exposure
On Entering
New
Investments
On Ongoing
Management of
the Financial
Stability of the
Holding
Company
Risk
Management
within the
Operating
Companies
Risk Management Policy

Objective
MPIC has taken steps to increase its presence in Southeast Asia through equity investments in Thailand's DMT and Vietnam's CII B&R,
while remaining committed to its core busienss in the Philippines. MPICs geographic focus remains to be predominantly the Philippines
within which its management team has extensive experience.
Prior to making a new investment, any business to be acquired is subject to an extensive due diligence including financial, operational,
regulatory and risk management. 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 - to varying degrees - a partnership approach with MPIC taking a controlling position and key operating
partners providing operational and technological input and 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 will 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 cashflow of
the target business and the overall financing position of MPIC itself.
MPIC does not guarantee the borrowings of its investee companies and there are no cross default provisions from one investee company
to another. Financial stability of the holding company 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.
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 the MPIC Audit and Risk Committee, together with MPICs designated Chief Risk Officer, and each of the respective
operating companies board of directors.
89
Regulatory
The majority of our 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 rail. Each of these businesses has concession and / 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
Risks arising from these types of businesses include the potential for differences with regulators involving interpretation of the relevant
concessions 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.
Competition and Market
Competitive and market-driven demand risks are most pronounced in Meralco, MPTC and the Healthcare group.
o
Meralco carries a degree of market risk and its returns in the short term may be impacted by consumers who elect to self-generate
and disconnect from the distribution grid. MPIC is 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 will take on risks associated with buying and
selling power on its own account instead of on a pass through basis. Meralco has long prepared for this and has an experienced
management team already in place to lead this new business. Meralco is now also invested in power generation with attendant
demand volume and price risks and fuel source price and supply risks. The primary mitigants are contracting to match demand and
supply side volumes where possible and employing highly experienced power market professionals to manage any open positions
by trading in the market.
At MPTC, MPIC sets tariff on new road projects based on traffic projections agreed with the regulator. Rising fuel prices, alternative
means of transport and existing or prospective alternative routes are all factors that can affect the number of vehicles that use our
roads.
MPIC 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, even with the prior factors included in the
assessment, 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. MPIC mitigate this risk by
ensuring MPIC knows our target market and scale our improvements to their ability to pay. The pace of medical innovation is
accelerating requiring increased management of the risks that costly equipment may become out of date before its cost is fully
90
recovered and traditional healthcare delivery models may be disrupted.

The water company 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. We have worked to moderate our reliance on Angat by developing the Putatan Water Treatment Plant and are
working on other alternative water sources in partnership with our regulator. However, our regulator does not now wish us to invest
further in alternative water sources and this means the logical way to mitigate our supply side risk is now largely prohibited to us.
Financial
MPICs investee companies financial risks are primarily: interest rate risk, foreign currency risk, liquidity risk, credit risk and equity price
risk. The Board of Directors of each 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
Maynilad has some foreign currency borrowing but there is a mechanism in place wherein it can recover currency fluctuations as
approved by its Regulator.
Asian Hospital Inc. (AHI) has foreign currency risk arising from its cash and cash equivalents; receivables from international
insurance companies; and dollar loans. AHI is unable to take on any derivative transaction to hedge these exposures since its
loan covenants do not allow it. AHI regularly reviews and manages its ability to generate dollar-based revenue from its foreign
patients to mitigate this risk.
Liquidity Risk
Each business monitors its cash position using a cash forecasting system wherein all expected collections, check disbursements
and other payments are determined to arrive at the projected cash position to cover its obligations.
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.
91
Equity Price Risk

Our 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 PSE on a volume weighted 30 trading day average calculation.
Meralcos share price would have to decline by 54.35% from its price as at 31st December 2014 before Beacon Electric would be
required to top-up collateral with cash or pay-down debt.
(b) Group
Give a general description of the Groups risk management policy, setting out and assessing the risk/s covered by the system (ranked according to priority), along
with the objective behind the policy for each kind of risk:
As an investment and management holding Company, the Groups Risk Management Policy contains the following provisions:
Risk Exposure
Risk
Management
within the
Operating
Companies
Risk Management Policy

Objective
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 the MPIC Audit and Risk Committee, together with MPICs designated Chief Risk Officer, and each of the respective
operating companies board of directors.
Regulatory
The majority of our 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 rail. Each of these businesses has concession and / 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
Risks arising from these types of businesses include the potential for differences with regulators involving interpretation of the relevant
concessions 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.
Competition and Market
Competitive and market-driven demand risks are most pronounced in Meralco, MPTC and the Healthcare group.
o
Meralco carries a degree of market risk and its returns in the short term may be impacted by consumers who elect to self-generate
92
and disconnect from the distribution grid. MPIC is 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 will take on risks associated with buying and
selling power on its own account instead of on a pass through basis. Meralco has long prepared for this and has an experienced
management team already in place to lead this new business. Meralco is now also invested in power generation with attendant
demand volume and price risks and fuel source price and supply risks. The primary mitigants are contracting to match demand and
supply side volumes where possible and employing highly experienced power market professionals to manage any open positions
by trading in the market.
o
At MPTC, MPIC sets tariff on new road projects based on traffic projections agreed with the regulator. Rising fuel prices, alternative
means of transport and existing or prospective alternative routes are all factors that can affect the number of vehicles that use our
roads.
MPIC 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, even with the prior factors included in the
assessment, 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. MPIC mitigate this risk by
ensuring MPIC knows our target market and scale our improvements to their ability to pay. The pace of medical innovation is
accelerating requiring 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.
The water company 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. We have worked to moderate our reliance on Angat by developing the Putatan Water Treatment Plant and are
working on other alternative water sources in partnership with our regulator. However, our regulator does not now wish us to invest
further in alternative water sources and this means the logical way to mitigate our supply side risk is now largely prohibited to us.
Financial
MPICs investee companies financial risks are primarily: interest rate risk, foreign currency risk, liquidity risk, credit risk and equity price
risk. The Board of Directors of each 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.
93
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
Maynilad has some foreign currency borrowing but there is a mechanism in place wherein it can recover currency fluctuations as
approved by its Regulator.
Asian Hospital Inc. (AHI) has foreign currency risk arising from its cash and cash equivalents; receivables from international
insurance companies; and dollar loans. AHI is unable to take on any derivative transaction to hedge these exposures since its
loan covenants do not allow it. AHI regularly reviews and manages its ability to generate dollar-based revenue from its foreign
patients to mitigate this risk.
Liquidity Risk
Each business monitors its cash position using a cash forecasting system wherein all expected collections, check disbursements
and other payments are determined to arrive at the projected cash position to cover its obligations.
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

Our 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 PSE on a volume weighted 30 trading day average calculation.
Meralcos share price would have to decline by 54.35% from its price as at 31st December 2014 before Beacon Electric would be
required to top-up collateral with cash or pay-down debt.
(c) Minority Shareholders

Indicate the principal risk of the exercise of controlling shareholders voting power.
Risk to Minority Shareholders
Since the inception of the Company, there have been no disputes or disagreements with minority shareholders. No single shareholder was aggrieved and
they are given proper opportunities to raise their concerns to the Corporation during the Annual Stockholders Meeting. The Corporation gives due diligence
in addressing the said concerns of the shareholders. To date, there have been no objections raised in the items discussed during the Annual Stockholders
Meeting.
94
3.
CONTROL SYSTEM SET UP

(f) Company
Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the company:
As disclosed in the Corporations Financial Statements, the following are the Corporations control system set-up to assess, manage and control the main issues faced by
the Corporation:
Risk Exposure
Credit Risk
Liquidity Risk
Risk Assessment
Risk Management and Control
(Monitoring and Measurement Process)
(Structures, Procedures, Actions Taken)
Credit risk is the risk that the Corporation will incur a loss
arising from customers, clients or counterparties that fail to
discharge their contracted obligations.
Liquidity risk is the risk that the Corporation will encounter
difficulty in meeting obligations associated with financial
liabilities. The Corporations objective is to maintain a
balance between continuity of funding and flexibility
through the use of bank loans and facilities.
The Corporation manages and controls credit risk by setting limits on the
amount of risk that the Corporation is willing to accept for individual
counterparties and by monitoring exposures in relation to such limits.
The Corporation 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 Corporation 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 Corporation also has online facilities with its depository banks
wherein bank balances are monitored daily to determine the
Corporations actual cash balances at any time.
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, 2014 and 2013, the Corporation is
subject to fair value and cash flow interest rate risks. Fixed
rate financial instruments measured at fair value are subject
The Corporations liquidity and funding management process include the

following:
Monitoring liquidity ratios against internal and regulatory

requirements.
The Corporation generally mitigates risk of changes in market interest
rates by constantly monitoring fluctuations of interest rates and
maintaining a mix of fixed and floating interest-bearing loans.
95
to fair value interest rate risk while floating rate financial

Foreign Currency
Risk
Capital
Management
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, 2014 and 2012, the Corporations
foreign currency risk results primarily from movements of
the Philippine Peso against US Dollar, Euro, Japanese Yen
and Thailand Baht.
Capital includes preferred shares and equity attributable to
the equity holders of the Corporation. The primary objective
of the Corporations capital management policies is to
ensure that the Corporation maintains a strong statement
of financial position and healthy capital ratios in order to
support its business and maximize shareholder value. The
Corporation ensures that it is compliant with all debt
covenants not only at the consolidated level but also at the
level of the Corporation and each of its subsidiaries.
The Corporations exposure to foreign currency risk is minimal as nearly

all of its transactions are denominated in Philippine Peso.
The Corporation manages its capital structure and adjust to it in light of

changes in economic conditions. To maintain or adjust the capital
structure, the Corporation 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 recent years. The Corporation
monitors capital on the basis of debt-to-equity ratio. Debt-to-equity ratio
is calculated as long-term debts over equity.
Detailed descriptions of the financial exposures of these risks are available in the Note 35 of the 2013 Financial Statements.
(g) Group
Briefly describe the control systems set up to assess, manage and control the main issue/s faced by the Company:
As disclosed in the Corporations Financial Statements, the following are the Corporations control system set-up to assess, manage and control the main issues faced by
the Group:
Risk Exposure
Credit Risk
Liquidity Risk
Risk Assessment
Risk Management and Control
(Monitoring and Measurement Process)
(Structures, Procedures, Actions Taken)
Credit risk is the risk that the Corporation will incur a loss
arising from customers, clients or counterparties that fail to
discharge their contracted obligations.
Liquidity risk is the risk that the Corporation will encounter
difficulty in meeting obligations associated with financial
liabilities. The Corporations objective is to maintain a
balance between continuity of funding and flexibility
The Corporation manages and controls credit risk by setting limits on the
amount of risk that the Corporation is willing to accept for individual
counterparties and by monitoring exposures in relation to such limits.
The Corporation 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
96
through the use of bank loans and facilities.
due. The Corporation 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 Corporation also has online facilities with its depository banks
wherein bank balances are monitored daily to determine the
Corporations actual cash balances at any time.
Interest Rate Risk
Foreign Currency
Risk
Capital
Management
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, 2014 and 2013, the Corporation 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
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, 2014 and 2013, the Corporations
foreign currency risk results primarily from movements of
the Philippine Peso against US Dollar, Euro, Japanese Yen
and Thailand Baht.
Capital includes preferred shares and equity attributable to

the equity holders of the Corporation. The primary objective
The Corporations liquidity and funding management process include the

following:
Monitoring liquidity ratios against internal and regulatory

requirements.
The Corporation generally mitigates risk of changes in market interest
rates by constantly monitoring fluctuations of interest rates and
maintaining a mix of fixed and floating interest-bearing loans.
The Groups exposure to foreign currency risk is minimal as nearly all of

its transactions are denominated in Philippine Peso.
Maynilad has some foreign currency borrowing but there is a mechanism
in place wherein it can recover currency fluctuations as approved by its
Regulator.
Asian Hospital Inc. (AHI) has foreign currency risk arising from its cash
and cash equivalents; receivables from international insurance
companies; and dollar loans. AHI is unable to take on any derivative
transaction to hedge these exposures since its loan covenants do not
allow it. AHI regularly reviews and manages its ability to generate dollarbased revenue from its foreign patients to mitigate this risk.
The Group manages its capital structure and adjust to it in light of
changes in economic conditions. To maintain or adjust the capital
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of the Corporations capital management policies is to

ensure that the Corporation maintains a strong statement
of financial position and healthy capital ratios in order to
support its business and maximize shareholder value. The
Corporation ensures that it is compliant with all debt
covenants not only at the consolidated level but also at the
level of the Corporation and each of its subsidiaries.
structure, the Corporation 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 recent years. The Group
monitors capital on the basis of debt-to-equity ratio. Debt-to-equity ratio
is calculated as long-term debts over equity.
Detailed descriptions of the financial exposures of these risks are available in the Note 35 of the 2014 Audited Financial Statements.
(h) Committee
Identify the committee or any other body of corporate governance in charge of laying down and supervising these control mechanisms, and give details of its
functions:
Committee/Unit
Internal Audit
Risk Management Office
Corporate Governance Office
Control Mechanism
Provision of independent and objective assurance
and consulting services based in risk-based audit
plans.
Provision of risk management policies and
procedures including the identification, assessment
and monitoring of the existence of risks and its
impact to the Corporation
Provision of corporate governance policies and
procedures for the guidance of the directors, officers,
and employees of the Corporation in executing their
responsibilities and functions.
Details of its Functions

Review and evaluation of the effectiveness of risk management, control,
and, governance processes.
Responsible for the identification, assessment and monitoring of the
existence of risks and its impact to the Corporation
Craft and Implement the Corporate Governance Policies of the
Corporation, and monitor the compliance of the directors, officers and
employees to these policies.
Monitor the compliance of the Corporation to the Corporate Governance
Scorecard and regulatory requirements on Corporate Governance.
G. INTERNAL AUDIT AND CONTROL

1.
STATEMENT ON EFFECTIVENESS OF INTERNAL CONTROL SYSTEM

Disclose the following information pertaining to the internal control system of the company:
i.
Explain how the internal control system is defined for the company;
98
The Companys internal control is a process effected by the Companys Board of Directors, Management and other personnel, designed to provide adequate and
effective controls to achieve its objectives in the following categories:
i.
ii.
iii.
iv.
v.
ii.
Compliance to Corporate Governance practices;

Set-up of operations and information systems (including the reliability and integrity of financial and operational information);
Effectiveness and efficiency of operations;
Protection of assets; and
Compliance to applicable laws and regulations.
A statement that the directors have reviewed the effectiveness of the internal control system and whether they consider them effective and adequate;
The Companys Management is responsible for establishing and maintaining adequate internal controls. The Audit and Risk Management Committee of the Board of
Directors conducts regular meetings and assists the Board in fulfilling its oversight responsibilities for the Companys system of internal controls.
iii.
Period covered by the review;

The period covered by the review is the year of 2014.
iv.
How often internal controls are reviewed and the directors criteria for assessing the effectiveness of the internal control system; and
The Companys internal controls are reviewed annually as shown in the Statement of Managements Responsibility in the Corporations Annual Report which states that:
The Management of Metro Pacific Investments Corporation and Subsidiaries (the Company) is responsible for the preparation and fair presentation of the consolidated
financial statements as of and for the three recent years , including the additional components attached therein, in accordance with Philippine Financial Reporting
Standards. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are
reasonable in the circumstances.
v.
2.
Where no review was conducted during the year, an explanation why not.
A review was conducted in 2014
.
INTERNAL AUDIT
a.
ROLE, SCOPE AND INTERNAL AUDIT FUNCTION

Give a general description of the role, scope of internal audit work and other details of the internal audit function.
The following are the roles of the Internal Audit as defined in the Internal Audit Charter of the Corporation.
99
b.
Role
Scope
To determine whether
MPICs structure of risk
management, control and
governance processes, as
designed and represented
by Management, is
adequate and functioning
effectively.
The mission of Internal Audit, as defined in

its charter, is to provide an independent
and objective assurance and consulting
services designed to add value and improve
MPICs operations. It was also established
to help MPIC accomplish its objectives by
bringing a systematic and disciplined
approach to evaluate and improve the
effectiveness of risk management, control
and governance processes.
Indicate whether In-house or

Outsource Internal Audit
Function
Outsource
Name of Chief Internal

Auditor/Auditing Firm
Michael C, Gallego,
Partner-in-charge,
Punongbayan and
Araullo
Reporting process
Functionally to the Audit
and Risk Management
Committee;
Administratively to the
President and CEO.
APPOINTMENT/REMOVAL OF INTERNAL AUDITOR

Do the appointment and/or removal of the Internal Auditor or the accounting /auditing firm or corporation to which the internal audit function is outsourced require
the approval of the audit committee?
Part of the duties and responsibilities of the Audit and Risk Management Committee, as stated in Section 4.3 of the Committee Charter, is the review of the
appointment and replacement of the Internal Auditor.
c.
REPORTING RELATIONSHIP WITH THE AUDIT COMMITTEE

Discuss the internal auditors reporting relationship with the audit committee. Does the internal auditor have direct and unfettered access to the board of directors
and the audit committee and to all records, properties and personnel?
The Internal Auditor functionally reports to the Audit and Risk Management Committee. Regular meetings are conducted with the ARMC to surface issues warranting the
attention of the Committee. The ARMC regularly reports to the Board of Directors of MPIC.
The Internal Audit Charter authorizes the Internal Auditor to:
i.
ii.
iii.
iv.
Unrestricted access to all functions, records, property, and personnel;

Full and free access to the ARMC;
Allocate resources, set frequencies, select subjects, determine scopes of work, and apply the techniques required to accomplish its audit objectives; and
Obtain the necessary assistance of personnel in the units of the organization where they perform audits, as well as other specialized services from within or
outside the organization.
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d.
RESIGNATION, RE-ASSIGNMENT AND REASONS

Disclose any resignation/s or re-assignment of the internal audit staff (including those employed by the third-party auditing firm) and the reason/s for them.
No resignation/s or re-assignment of the internal audit staff in 2014.
e.
Name of Audit Staff
Reason
none
none
PROGRESS AGAINST PLANS, ISSUES, FINDINGS AND EXAMINATION TRENDS

State the internal audits progress against plans, significant issues, significant findings and examination trends.
Progress Against Plans
6
Issues
7
Findings
Examination Trends
Review of internal operations policies and procedures (Status: On-going)

Internal Audit Manual (Status: Completed)
There are no significant issues based on the results of the reviews.
There are no significant findings based on the results of the reviews.
Policies and procedures require updating to include automated processes.
The relationship among progress, plans, issues and findings should be viewed as an internal control review cycle which involves the following step-by-step activities:
1)
Preparation of an audit plan inclusive of a timeline and milestones;
2)
Conduct of examination based on the plan;
3)
Evaluation of the progress in the implementation of the plan;
4)
Documentation of issues and findings as a result of the examination;
5)
Determination of the pervasive issues and findings (examination trends) based on single year result and/or year-to-year results;
6)
Conduct of the foregoing procedures on a regular basis.
f.
AUDIT CONTROL POLICIES AND PROCEDURES

Disclose all internal audit controls, policies and procedures that have been established by the company and the result of an assessment as to whether the established
controls, policies and procedures have been implemented under the column Implementation.
The Internal Audit Manual, which contains the Audit Control Policies and Procedures, was completed and approved by the ARMC and is now being implemented by the
Company. The said Manual covers the following:
6
7
Issues are compliance matters that arise from adopting different interpretations.
Findings are those with concrete basis under the companys policies and rules.
101
g.
Policies & Procedures
Implementation
Audit Planning and Risk Assessment Methodology

Audit Reporting Guidelines
Audit Field Work and Working Paper Guidelines
Audit Follow-Up Guidelines
Quality Assurance and Improvement Program
Implemented
Implemented
Implemented
Implemented
Implemented
MECHANISM AND SAFEGUARDS

i. State the mechanism established by the company to safeguard the independence of the auditors, financial analysts, investment banks and rating agencies
(example, restrictions on trading in the companys shares and imposition of internal approval procedures for these transactions, limitation on the non-audit
services that an external auditor may provide to the company):
Auditors
(Internal and External)
The Internal Audit Code of Ethics is
embodied in the Internal Audit Manual
which is based on the International
Standards for Professional Practice of
Internal Auditing. The Internal Auditor is
expected to abide by it and to uphold its
principles.
The appointment of the Internal Auditor
underwent a rigorous scrutiny by the ARMC
and the Board of Directors to ensure her
independence and professional
qualifications for the position.
The internal auditor follows the
Corporations Coe of Business Conduct
which states that:
Code of Business Conduct and Ethics
Part C. Confidentiality of Information and
Proper Use of Property
2.
Financial Analysts
Investment Banks
Rating Agencies
Financial Analysts are considered

public entities and therefore the PSE
Disclosure Rules to protect public
interest is being followed.
Investment Banks are considered

Rating Agencies are considered

Information received by investors,

analysts and media, during briefings
are information which were
disclosed publicly through the PSE
and the Corporations website.

are information which were disclosed
publicly through the PSE and the
Corporations website.

are information which were
disclosed publicly through the PSE
and the Corporations website.
The Corporation adheres to the

objectives of the PSE to provide a
fair, orderly, efficient, and
transparent market for the trading of
securities and to determine the
suitability of securities for listing for
the protection of the public interest
at all times.

objectives of the PSE to provide a fair,
orderly, efficient, and transparent
market for the trading of securities
and to determine the suitability of
securities for listing for the protection
of the public interest at all times.

objectives of the PSE to provide a
fair, orderly, efficient, and
transparent market for the trading of
securities and to determine the
suitability of securities for listing for
the protection of the public interest
at all times.
Maintain and safeguard the

102
confidentiality of information
entrusted by MPIC, its subsidiaries,
affiliates, customers, business partners,
or such other parties with whom MPIC
relates, except when disclosure is
authorized or legally mandated.
Confidential information includes any
non-public information that might be
of use to competitors, or harmful to
MPIC, its subsidiaries, affiliates,
customers, business partners, or such
other parties with whom MPIC relates,
if disclosed.
Avoid trading any of MPICs securities or
those of its subsidiaries and affiliates using
price sensitive information that is not
normally available publicly, and obtained by
reason of position, contact within, or other
relationship with MPIC.
ii. State the officers (preferably the Chairman and the CEO) who will have to attest to the companys full compliance with the SEC Code of Corporate Governance.
Such confirmation must state that all directors, officers and employees of the company have been given proper instruction on their respective duties as mandated
by the Code and that internal mechanisms are in place to ensure that compliance.
The Companys Compliance Officer, as witnessed and countersigned by the President and CEO, attested that, in 2013, the Company fully complied with the SEC Code of
Corporate Governance and its own Revised Manual of Corporate Governance.
H. ROLE OF STAKEHOLDERS
1.
Disclose the companys policy and activities relative to the following:
Customers'
welfare
Policy
Part B. Competition and Fair Dealing
1.
Avoid taking unfair advantage of anyone through manipulation,
Activities
The Corporations customers are investors and analyst. The Company
provides timely and accurate information to its customers through
investors/analysts/media briefing.
They are encouraged to attend:
103
concealment, abuse of privileged information, misrepresentation of

material facts, or any unfair dealing practice.
2.
Deal fairly with MPICs customers, service providers, suppliers,

competitors and employees.
In communicating with our investors, we try to be as clear as possible about
our strategy, growth catalysts and potential risks. We work towards providing
investors and analysts the information they need to build as complete a
picture of our business and prospects as possible through this website, our
Annual Report, quarterly presentation of results and investor presentations.
Attendance in IR Conferences
Quarterly Financial Results Briefing
Annual Stockholders Meeting
The challenge rests in determining the level of disclosure - sufficient to show

where we want to go but not enough to allow competitors to anticipate and
block our steps to get there.
Ours is a complex story - we are looking to add to four business lines which on
their own have varying degrees of ownership, government oversight and
public interest. It takes time and sometimes multiple meetings to tell the
story, get it understood and acted upon - either through a research report or
an actual investment.
That is why we have an active travel schedule. We are cognizant of our own
story's complexity and take that into account when determining how much
time we spend on the road talking to investors. It is also why we are always
available to analysts and sales people of stockbrokers. They expand our reach
and make us more efficient - a well conveyed message to a research analyst
can be re-told multiple times to investors that we may otherwise not have
access to.
Supplier/cont
ractor
selection
practice
Our goal for is to have the stock price reflect the future we see for our
company.
Part B.2 Competition and Fair Dealing

Part B.2 Competition and Fair Dealing
Deal fairly with MPICs customers, service providers, suppliers, competitors

and employees.
Deal fairly with MPICs customers, service providers, suppliers, competitors

and employees.
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Corporations Statement on the

ROLE OF BUSINESS PARTNERS
As an investment and management company, some of the primary tools used
by the organization to achieve its goals are funding and financial oversight of
its investee companies. It is of vital importance that funding be provided by
stable financial institutions that can support their commitments. As such,
included among the company's business partners are financial institutions
that either extend credit or arrange financing for companies within its sphere
of influence. MPIC needs to ensure that the financial statements of each and
every company are accurate and reliable. Given that, a strong and
independent auditing firm is critical to providing us with an accurate picture
of the state of our investments.
To continually be at the forefront as the leading infrastructure investment
firm in the Philippines, we seek out and adopt best practices and technologies
that are applicable to our businesses. We form joint-ventures for this
purpose. We view their roles as providing significant technical and/or
financial support in each venture we partner with them.
MPIC select materials and services that consider the environmental, social,
and economic impact in evaluating total cost. It is building relationships with
suppliers who operate with the highest ethical and financial standards and
comply with all relevant laws and regulations. MPIC communicates its
expectations to its suppliers of its commitment to sustainability, assesses its
suppliers and monitors their improvement and compliance with the
sustainability goals.
To consistently uphold the values central to MPIC's corporate governance

policies, financial discipline and accountability as well as integrity and
transparency are expected from all suppliers and business partners.
MPIC's suppliers and contractors play an essential role in achieving its
sustainability goals. MPIC select materials and services that consider the
environmental, social, and economic impact in evaluating total cost. It is
building relationships with suppliers who operate with the highest ethical and
financial standards and comply with all relevant laws and regulations. MPIC
communicates its expectations to its suppliers of its commitment to
sustainability, assesses its suppliers and monitors their improvement and
compliance with the sustainability goals.
The E's of MPI Foundation's Strategic Thrust : Excellent Education,
Environmental Awareness and Economic Empowerment
Environment
ally friendly
value-chain
MPI Foundation's (MPIF) strategic program has evolved throughout its five
years of existence and is now geared towards three fronts of Social
Infrastructure: Education, Environment and Economic Empowerment. In line
with Metro Pacific Investments Corporation's (MPIC) commitment to nation-
The Company, its Foundation, and its portfolio companies have the following
activities in keeping its value chain environment-friendly.
The Company engages itself to environmental awareness campaigns such as
SHORE IT UP.
105
building, MPI Foundation seeks to complement MPIC's efforts on the hard

front of infrastructure development.
MPIF is committed to implementing all its program - especially to benefit
communities, organizations, families and individuals in the areas in which
MPIC portfolio companies operate. As MPIC continues to grow and expand,
so will MPIF's involvement and participation in noteworthy and
transformative corporate social responsibility initiatives continue to evolve.
MPIC's portfolio companies, most of which are in regulated industries, are
constantly confronted with various environmental issues. The Company, it
Foundation, and its portfolio companies established its own environment
protection policies and programs to address related key environmental
concerns.
The Shore It Up! campaign is an effort towards sustainable development,

preservation and conservation of our marine resources. As a yearly program
of the Foundation, it also aims to help reduce destructive floods caused by
environmental neglect by both businesses and communities.
MAYNILAD
ENVIRONMENT AND HEALTH AWARENESS
Maynilads primary thrusts were in the areas of education and environment,
using what it came to call as Daloy Dunong as its main vehicle, even as it
empowered customers by making its business services more accessible
through Maynilad sa Kommunidad.
Water Warriors The Daloy Dunong program also encourages students to
become Water Warriors for their respective communitiesadvocates who
promote the importance of clean and safe water to health and the
environment.
Global Handwashing Day Since its soft launch in 15 October 2012 to
coincide with the 5th Global Handwashing Day, Maynilads Daloy Dunong
program has benefited over 10,000 students from 40 public schools in 2012.
METRO PACIFIC TOLLWAYS CORPORATION
Community
interaction
Metro Pacific Investments Corporation (MPIC) through its Foundation

remains committed to upholding its 3-pronged approach in the areas of
Education, Empowerment and the Environment. The Company provides
targeted programs in order to create greater impact and make a difference in
the lives of chosen beneficiaries. Such programs include:
Quality Education through Mano Amiga
Empowering People through Manpower for Infrastructure
Cooperative
Environmental Awareness through Shore It Up
ENVIRONMENT CLEAN-UPS AND GREENING

Tullahan River Clean-up Drive A program that aims at Cleaning It Up,
Keeping It Clean the 1-kilometer stretch of the Tullahan River in Quezon
City, Valenzuela City and Caloocan City.
Greening the NLEX Belt MPTC has began to plant ornamental, shade, and
fruit trees along the entire stretch of NLEX and SCTEX, thus turning it into a
long green belt.
Metro Pacific Foundation has the following programs and initiatives:
QUALITY EDUCATION THROUGH MANO AMIGA
Mano Amiga is a school that provides children from low-income families
access to quality education, holistic formation, and other necessary support
for them to have a better life. It follows the Kindergarten to 12th Grade
model and uses the Integral Formation Program which focuses on the
harmonious development of all dimensions of the human person:
intellectual, character, spiritual and apostolic formation.
106
Special Outreach Activities

EMPOWERING PEOPLE THROUGH MANPOWER FOR INFRASTRUCTURE
COOPERATIVE
In February 2012, MPIC launched the ManPower for Infrastructure
Cooperative Development (MPIC) project - a sustainable Livelihood and
Enterprise Development program for 25 urban poor households of Ana
Maria Heights, Barangay Calamansian, Caloocan City. In cooperation with
the Philippine Business for Social Progress of which MPIC is a member
company, the community-based cooperative project embarks on raising the
quality of labor skills of its members for possible employment within MPICs
business portfolio.
ENVIRONMENTAL AWARENESS THROUGH SHORE IT UP
The Shore It Up! campaign is an effort towards sustainable development,
preservation and conservation of our marine resources. As a yearly program
of the Foundation, it also aims to help reduce destructive floods caused by
environmental neglect by both businesses and communities.
SPECIAL OUTREACH ACTIVITIES:
FAITH, HOPE AND LOVE
Started in 2004, the Faith, Hope & Love Kids Ranch Inc. was established by
the Lamar family to give abandoned, abused, neglected and orphaned
children a second chance at life. Currently, the facility has about 40 children
under its care and is registered with the Department of Social Welfare and
Development.
TULONG KAPATID: ALIGNING PROGRAMS AND WORKING TOGETHER TO
IMPROVE LIVES AND BENEFIT COMMUNITIES
The CSR Council composed of foundations and CSR departments in the MVP
Group of companies formed Tulong Kapatid (Brotherly Help) to collaborate
in common activities relating to environmental programs, tree planting,
coastal clean-ups, blood banks, medical missions and disaster preparedness
and responsiveness. Recent efforts of Tulong Kapatid provided coordination
for medical assistance and service restoration in telecommunications,
electricity and water.
107
Prompted by one text message and organized in 24 hours, the Tulong

Kapatid MVP Telethon in December 2012 raised over 100 million for
victims of typhoon Pablo in just six hours.
Part A.3 Compliance
Avoid the direct or indirect commission of bribery and corruption of
representatives of governments or regulators to facilitate any transaction or
gain any perceived or actual favor or advantage, excluding permissible
additional payments for routine governmental actions allowed by all
applicable laws and regulations.
MPICs Whistleblowing Policy
Anticorruption
programmes
and
procedures
This Policy is intended to assist individual employees (permanent or

temporary employees) to disclose information relevant to suspected
misconduct, malpractice or irregularity through a confidential reporting
channel. It is not designed to further any personal disputes, question financial
or business decisions taken by the Corporation nor should it be used to
reconsider any staff matters which have been addressed under the grievance
procedure already in place.
The Company established a Whistleblowing Policy is to increase the

awareness of maintaining internal corporate justice and regard it as a kind of
internal control mechanism. It provides the employees of the Company with
reporting channels and guidance on whistleblowing. Continuous monitoring
of the implementation of the Companys Whistleblowing policy is assured
through the Corporate Governance Committee of the Board.
Whistleblowing matters may include but are not confined to:
Safeguarding
creditors'
1. Malpractice, impropriety or fraud relating to internal controls, accounting,

auditing and financial matters;
2. Violation of the rules and regulations of the Corporation or the Code of
Business Conduct and Ethics of the Corporation
3. Improper conduct or unethical behavior likely to prejudice the standing of
the Corporation
4. Breach of legal or regulatory requirements
5. Criminal offences, breach of civil law and miscarriage of justice
6. Endangerment of the health and safety of an individual
7. Damage caused to the environment
8. Deliberate concealment of any of the above.
The primary objective of the Corporations capital management policies is to
ensure that the Corporation maintains a strong statement of financial
The primary objective of the Corporations capital management policies is to

ensure that the Corporation maintains a strong statement of financial
108
rights
2.
position and healthy capital ratios in order to support its business and
maximize shareholder value. The Corporation 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. The Corporation complies
with these debt covenants as part of maintaining a strong credit rating with
its creditors.
position and healthy capital ratios in order to support its business and
maximize shareholder value. The Corporation 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. The Corporation
complies with these debt covenants as part of maintaining a strong credit
rating with its creditors.
Does the company have a separate corporate responsibility (CR) report/section or sustainability report/section?
The Company has a separate Corporate Responsibility Report (CSR) section in its Annual Report (printed and downloadable) and can also be viewed in its website.
3.
Performance-Enhancing Mechanisms For Employee Participation

(a) What are the companys policy for its employees safety, health, and welfare?
The following are the Corporations policies covering its employees safety, health and welfare:
Training and Development Program
MPIC offers its employees many opportunities to further their career not only within the company, but within the group of companies. Our cross posting opportunity
spans across several industries, such as Health Care, Utilities (Water, Electricity & Communications), Road and other Infrastructure Industries all throughout the
archipelago including possible assignment in our Hong Kong Office.
We want to attract and retain the best talent within and outside of our industry over the long term. MPIC firmly believes that it has an obligation to offer its employees
ample training and development opportunities. We maximize our resources where we share training courses and facilities across MPIC Group of Companies including
that of our sister company PLDT. It is through this that our employee can avail of a wide array of training and development programs.
Benefits and Incentives
It is our belief that employees drive our success and our future, it is in these that we create a core welfare program which express our respect for human rights,
character and individuality. We have an aggressive rewards and compensation program that is centered towards distinct performance recognition and market
competitiveness.
In our further response to the welfare of our employees, we likewise acknowledge the need to care for employee's family members, where most of our benefit programs
and company activities cover and/or consider the welfare of members of the family. As an employee, we promise that you will have access to a wide range of rewards
and compensation, such as:
Competitive Compensation
Performance Based Rewards
109
Exclusive Medical Coverage

Communication Allowance
Travel Subsidy & Allowance
Gym Memberships
Personal Loans
Savings Programs
Participative Pension Scheme
(b) Show data relating to health, safety and welfare of its employees.
Part of the Corporations benefit is the exclusive medical coverage for its employees. Every year, employees are required to have their annual physical examinations in
order to monitor their health and wellness. The following are the employee engagement on the various health programs facilitated by the Corporation in 2013:
64% of the employees has undergone the required annual physical examination;
74% of employees availed the Flu vaccination;
57% of employees enrolled in sponsored gym classes; and
No employee was hospitalized due to work-related safety/health concerns.
(c) State the companys training and development programmes for its employees. Show the data.
The Corporation conducted training programs that are open for all its employees in 2014. The various training programs are summarized in the following categories:
1. 2014 MPIC Business Communication Series (28 participants)
a. Fundamentals of Verbal Business Communication (July 1-2 and August 8)
b. Essentials of Verbal Business Communication (October 14-15)
c. Advanced Business Communication (November 27-28)
2. Leadership Communication Series (11 participants)
a. Effective Feedback (October 15)
b. Influencing Skills program (November 26)
3. Accounting for Non-Accountants (8 participants; August 1 and November 19)
(d) State the companys reward/compensation policy that accounts for the performance of the company beyond short-term financial measures
The Corporation has established a Long Term Incentive Plan (LTIP) aimed at providing a competitive level of financial incentives for eligible employees to encourage them
to achieve performance targets consistent. The amount of LTIP is fixed upon achievement of the target Core Income and is not affected by changes in future salaries of
the employees covered.
(e) What are the companys procedures for handling complaints by employees concerning illegal (including corruption) and unethical behaviour? Explain how employees
are protected from retaliation.
110
The Corporation established a Whistleblowing Policy which is intended to assist individual employees (permanent or temporary employees) to disclose information
relevant to suspected misconduct, malpractice or irregularity through a confidential reporting channel. It is not designed to further any personal disputes, question
financial or business decisions taken by the Corporation nor should it be used to reconsider any staff matters which have been addressed under the grievance procedure
already in place.
Whistleblowing matters may include but are not confined to:
1.
2.
3.
4.
5.
6.
7.
8.
Malpractice, impropriety or fraud relating to internal controls, accounting, auditing and financial matters;
Violation of the rules and regulations of the Corporation or the Code of Business Conduct and Ethics of the Corporation
Improper conduct or unethical behavior likely to prejudice the standing of the Corporation
Breach of legal or regulatory requirements
Criminal offences, breach of civil law and miscarriage of justice
Endangerment of the health and safety of an individual
Damage caused to the environment
Deliberate concealment of any of the above
Reporting and Investigation Procedures

1.
Reporting Channel for the Corporation

Employee who has a legitimate malpractice concern can raise the matter directly with the officer of the Corporate Governance Committee. The officer will review
the complaint and decide how the investigation should proceed. Depending on the circumstances, the Corporate Governance Committee may consider nominating
an appropriate investigating officer or set up a special committee to investigate the matter independently.
2.
Reporting Format and Supporting Documentation

Disclosures can be made in writing or by using the standard form (Whistleblower Report Form) attached to this Policy. While the Corporation does not expect the
employee to have absolute proof or evidence of the misconducts, malpractices or irregularities reported, the report should show reasons for the concerns and full
disclosure of any relevant details and supporting documentation.
The disclosure should be sent to the Chairman of the Corporate Governance Committee at 10/F MGO Building Legaspi cor Dela Rosa Streets Makati City, 0721
Philippines in a sealed envelope clearly marked Strictly Private and Confidential to be opened by Addressee Only to ensure confidentiality, or through sending
emails to corporategovernance@mpic.com.ph. Employees should ensure all the attachments to the emails should have passwords in order to ensure confidentiality.
Employees are required to put their name to any disclosures they make. Anonymous complaints are usually not considered.
The Company will hold it a serious disciplinary offence for any person who seeks to prevent a communication of malpractice concerned reaching to the designated
person, or to impede any investigation which he or anyone on his behalf may make.
3.
Investigation Procedure
The format and length of an investigation will vary depending upon the nature and particular circumstances of each complaint made. The matters raised may:
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i. be investigated internally;
ii. be referred to the External Auditor; and/or
iii. form the subject of an independent inquiry
The Chairman of the Corporate Governance Committee or the person designated to investigate the complaint will write to the complainant whenever reasonably
practicable of the concern being received:
i. acknowledging that the concern has been received;
ii. advising whether or not the matter is to be investigated further and if so what the nature of the investigation will be;
iii. giving an estimate of how long the investigation will take to provide a final response telling the complainant whether any initial inquiries have been made, and
whether further investigation will take place, and if not, why not.
False Reports
If an employee makes a false report maliciously, with an ulterior motive, or for personal gain, the Corporation reserves the right to take appropriate actions against the
employee to recover any loss or damage as a result of the false report. In particular, the employee may face disciplinary action, including dismissal, where appropriate.
Anonymous Reports
As the Corporation takes reporting of misconducts, malpractices, and irregularities seriously and wants to conduct warranted investigations of both potential and actual
violations, it is preferred that these reports are not made anonymously. However, it is recognized that for any number of reasons, employees may not feel comfortable
reporting potential violations directly to the Chairman of the Corporate Governance Committee. In these cases, anonymous reports may be submitted to the HR
Department.
Protection and Confidentiality

It is the Corporation's policy to make every effort treating all disclosures in a confidential and sensitive manner after employee reports concern about any of the above
matters. The identity of the individual employee making genuine and appropriate allegation under this Policy are assured of fair treatment. In addition, employees are
also assured of protection against unfair dismissal, victimization or unwarranted disciplinary action, even if the concerns raised turned out to be unsubstantiated.
The Corporation reserves the right to take appropriate actions against anyone who initiates or threatens to initiate retaliation against those who have raised concerns
under this Policy. In particular, employees who initiate or threaten retaliation will be subject to disciplinary actions, which may include summary dismissal.
Management will support all employees and encourage them to raise concerns without fear of reprisals.
I.
DISCLOSURE AND TRANSPARENCY
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1.
Ownership Structure
Security ownership of Record and Beneficial Owners of at least 5% of the total issued and outstanding capital stock as at February 28, 2015:
Shareholder
PCD Nominee Corporation (Foreign)
PCD Nominee Corporation (Filipino)
Number of Shares
14,522,948,170
9,431,034,166
3,868,205,726
Percent
52.13%
33.85%
13.88%
Beneficial Owner
Public ownership
Public ownership
Below is a list of directors and officers holding shares in the Corporation as at February 28, 2015:
Name of Senior Management

Jose Ma. K. Lim
David J. Nicol
Ray C. Espinosa
Robert C. Nicholson
Antonio A. Picazo
Edward A. Tortorici
Victorico P. Vargas
Washington Z. SyCip
Edward S. Go
Lydia B. Echauz
TOTAL
Number of
Direct shares
1
11,000,001
7,250,001
1
5,862,001
1
10,000,001
1,001
2,500,001
10,729,596
4,500,001
1
500,000
30,000
250,001
52,622,608
Number of
Indirect shares /
Through (name
of record owner)
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
% of Capital
Stock
0.00%
0.04%
0.03%
0.00%
0.02%
0.00%
0.04%
0.00%
0.01%
0.04%
0.00%
0.00%
0.00%
0.00%
0.00%
0.20%
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2.
Annual Report
Key risks
Corporate objectives
Financial performance indicators
Non-financial performance indicators
Dividend policy
Details of whistle-blowing policy
Biographical details (at least age, qualifications, date of first appointment, relevant
experience, and any other directorships of listed companies) of
directors/commissioners
Training and/or continuing education programme attended by each
director/commissioner
Number of board of directors/commissioners meetings held during the year
Attendance details of each director/commissioner in respect of meetings held
Details of remuneration of the CEO and each member of the board of
directors/commissioners
Yes
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Should the Annual Report not disclose any of the above, please indicate the reason for the non-disclosure.
The Annual Report discloses the Board approval of the Companys Whistleblowing policy. The complete full detailed policy is posted in the Company website. For the
trainings and seminars attended, the breakdown of the trainings per director was not included in the Annual Report but there was a mention that the directors and
officers of the Company attended different Corporate Governance Trainings and Seminars conducted by third-party entities.
3.
External Auditors fee

The table below shows the aggregate Audit Fees for 2014.
Name of auditor
SGV & Company
4.
Audit Fee
23,140,875.00
Non-audit Fee
--
Medium of Communication
List down the mode/s of communication that the company is using for disseminating information.
The Companys modes of communication are the following:
i.
Corporate Website (http://www.mpic.com.ph)
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ii.
iii.
iv.
5.
Annual Report (Printed and Downloadable)

SEC/ PSE Disclosures
a. SEC Form 17-A (Annual Report)
b. Corporate Disclosures: SEC Form 17-C and Clarifications
c. SEC Form 17-Q (Quarterly Financial Report)
d. Public Ownership Report
e. Report on number of shareholders and foreign ownership report
f. Shareholders list: Top 100, Top 20 and Shareholders Masterlist
g. 20-IS (Preliminary and Definitive Information Statement)
Analysts/ Investors Briefing (close to 300 meetings were conducted)
Release of Audited Financial Report

Date of release of audited financial report:
The table below shows the summary of the release of the audited annual and interim financial statements for 2014 and 2013. The indicated release date is the date the 17Q
and 17A were filed with the Securities and Exchange Commissions.
Financial Report
st
1 Quarter
nd
2 Quarter
rd
3 Quarter
Annual Financial Report
6.
Release Date
2013 Reports
2014 Reports
May 15, 2013
May 14, 2014
August 14, 2013
August 13, 2014
November 13, 2013
November 13, 2014
April 15, 2014
April 15, 2015
Company Website
Does the company have a website disclosing up-to-date information about the following?
The Company provides information to its stakeholders through its website address http://www.mpic.com.ph
Business operations
Financial statements/reports (current and prior years)
Materials provided in briefings to analysts and media
Shareholding structure
Group corporate structure
Downloadable annual report
Yes
Yes
Yes
Yes
Yes
Yes
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Notice of AGM and/or EGM

Company's constitution (company's by-laws, memorandum and articles of association)
Yes
Yes
Should any of the foregoing information be not disclosed, please indicate the reason thereto.
None.
7.
Disclosure of RPT
RPT*
Relationship
Nature
TMC provides services as operator to the North Luzon Expressway (NLE) under
the Operations & Maintenance (O&M). The O&M contains the terms and
conditions for the operation and maintenance by TMC of Phase I of the NLE and
subsequently of Segment 7, and sets forth the scope of its services.
Smart Communications provides wireless communication services to MPIC and its
subsidiaries.
Advertising agreements between MNTC and Digitel related to various advertising
mediums along NLEX
Value (In millions PhP)
PLDT provides landline services to MPIC and its subsidiaries.
Php 46
PLDT provides services for various administrative assistance extended to the

Company. It also includes rentals from lease of office space.
Php 15
Non-controlling
shareholder in
Maynilad Water
Holding
Company, Inc.
Maynilad entered into certain construction contracts with D.M. Consunji, Inc. in
relation to the provision of engineering, procurement and construction services
to Maynilad.
Php 583
Associate
Meralco provides electricity to MPIC and certain subsidiaries offices within its
franchise area. The rates charged by Meralco are the same as those with
unrelated parties. Meralco is the sole provider of electricity for the Corporation
since it is located within Meralcos franchise area.
Php 1,006
Traffic Management
Corporation (TMC)
Associate
Smart Communications
Other related
party
PLDT
D.M. Consunji Inc.

(Meralco)
Other related
party
Php 1,711
Php 33
Php 58
* Full details of the Companys Related Party Transactions are available in the Note 21 of the 2014 Audited Financial Statements.
When RPTs are involved, what processes are in place to address them in the manner that will safeguard the interest of th e company and in particular of its minority
shareholders and other stakeholders?
Transactions with TMC. The Operation & Maintenance (O&M) of the NLEX and Segment 7 is undertaken by TMC pursuant to the O&M Agreement between MNTC and
TMC. This agreement was signed on July 6, 2001 and shall be effective for the entire concession period. In exchange for performing its duties, TMC receives an O&M fee
based on a base fee plus a variable fee. The base fee is a fixed annual amount, payable in twelve (12) monthly installments and is escalated on a quarterly basis. The
variable fee is the amount assessed and paid by MNTC to TMC for the cost of performing its services over and above the agreed base traffic volume assumption. TMCs
116
services have been expanded to include the O&M of the NLEX Mindanao Avenue link as well as the Balagtas Interchange and the Bocaue Northbound Exit.
Transactions with PLDT and SMART. The Companys primary telecommunications carriers are PLDT (an associate of FPC) for its wireline and SMART (PLDTs subsidiary)
for its wireless services. Such services are covered by standard service contracts between the telecommunications carriers and each entity within the Company.
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.
J.
RIGHTS OF STOCKHOLDERS
1.
Right to participate effectively in and vote in Annual/Special Stockholders Meetings

(a) Quorum
Give details on the quorum required to convene the Annual/Special Stockholders Meeting as set forth in its By-laws.
The Corporations By-Laws, Article II. Section 5. Quorum states that to have a quorum, the
holders of the Majority of the outstanding capital stock should be present in the Annual
Stockholders Meeting.
Quorum Required
(b) System Used to Approve Corporate Acts
Explain the system used to approve corporate acts.
System Used
Voting in person or proxy.
Description
Stockholders were given an opportunity to vote in person or proxy as stated in the Corporations By-Laws,
Article II. Section 5. Quorum.
(c) Stockholders Rights

List any Stockholders Rights concerning Annual/Special Stockholders Meeting that differ from those laid down in the Corporation Code.
Stockholders Rights under
Stockholders Rights not in
The Corporation Code
The Corporation Code
None
None
(d) Dividends
117
Declaration Date
March 19, 2014
August 12, 2014
November 6, 2014
February 26, 2015
Record Date
April 8, 2014
August 29, 2014
December 2, 2014
March 25, 2015
Payment Date
April 30, 2014
September 24, 2014
December 18, 2014
April 17, 2015
(e) Stockholders Participation

1.
State, if any, the measures adopted to promote stockholder participation in the Annual/Special Stockholders Meeting, including the procedure on how stockholders
and other parties interested may communicate directly with the Chairman of the Board, individual directors or board committees. Include in the discussion the steps
the Board has taken to solicit and understand the views of the stockholders as well as procedures for putting forward proposals at stockholders meetings.
Measures Adopted
During the 2014 Annual Stockholders Meeting, the Companys stockholders
were given the opportunity to ask questions or raise their concerns, given
the following conditions
1.
2.
2.
Communication Procedure
At the start of the 2014 Annual Stockholders Meeting, the Chairman reads
the rules to be observed by the Stockholders in raising their questions and
concerns during the meeting.
Only shareholders of the Company are entitled to ask questions; and

Before posing questions, the stockholder must state his/her name for
the record.
State the company policy of asking shareholders to actively participate in corporate decisions regarding:
a. Amendments to the company's constitution
b. Authorization of additional shares
c. Transfer of all or substantially all assets, which in effect results in the sale of the company
Shareholders are encouraged to actively participate in the annual meetings to discuss and approve items a-c.
3.
Does the company observe a minimum of 21 business days for giving out of notices to the AGM where items to be resolved by shareholders are taken up?
As stated in the Corporations By-Laws, which was based on the Philippine Corporation Code, the notices for regular or special meetings of stockholders may be sent
by the Corporate Secretary by personal delivery or by mail at least fifteen (15) days prior to the date of the meeting to each stockholder of record.
a.
Date of sending out notices:

The Notices for the 2014 Annual Stockholders Meeting was sent to the Stockholders on May 5, 2014, 26 days prior to the May 30, 2014 Annual Stockholders
118
Meeting .
b. Date of the Annual/Special Stockholders Meeting:
The 2014 Annual Stockholders Meeting was held on May 30, 2014.
4.
State, if any, questions and answers during the Annual/Special Stockholders Meeting.
The Company encourages the stockholders to raise their questions or concerns during the Annual Stockholders Meeting.
5.
Result of Annual/Special Stockholders Meetings Resolutions

Result of the Annual Stockholders Meeting on May 30, 2014
Resolution
Approval of the Presidents Report and the Annual Report
for the year 2013
Adoption of the Audited Financial Statements for the year
st
ended 31 December 2013 contained in the Annual Report
Ratification of all acts of the Board of Directors and
Management for the year 2013
Appointment of the external auditor of the Company for
the year 2014
6.
Approving
100% of SH in
attendance
100% of SH in
attendance
100% of SH in
attendance
100% of SH in
attendance
Dissenting
Abstaining
Date of publishing of the result of the votes taken during the most recent AGM for all resolutions:
The results of the AGM and the Special Stockholders Meeting were disclosed on the same day of the meeting.
(f) Modifications
State, if any, the modifications made in the Annual/Special Stockholders Meeting regulations during the most recent year and the reason for such modification:
Modifications
None
Reason for Modification

None
(g) Stockholders Attendance

119
(i) Details of Attendance in the Annual/Special Stockholders Meeting Held:
Type of Meeting
Annual
Names of Board members / Officers

present
Atty. Amado R. Santiago III;
Atty. Ray C. Espinosa;
Ms. Lydia B. Echauz;
Chief Justice Artemio V. Panganiban;
Mr. Washington Z. SyCip;
Atty. Antonio A. Picazo;
Mr. Augusto P. Palisoc, Jr.;
Mr. Ramoncito S. Fernandez;
Mr. Victorico P. Vargas;
Mr. David J. Nicol;
Mr. Jose Ma. K. Lim;
Date of Meeting
Voting
Procedure (by
poll, show of
hands, etc.)
% of SH
Attending
in Person
% of SH in
Proxy
Total % of SH
attendance
30 May 2014
Votes were
counted thru
Proxies.
0.09%
69.69%
69.78%
(ii) Does the company appoint an independent party (inspectors) to count and/or validate the votes at the ASM/SSMs?
SGV and Co., external auditor, was appointed by the Corporation as the independent party (inspectors) to count and/or validate the votes and proxies at the AGM
and SSM.
(iii) Do the companys common shares carry one vote for one share? If not, disclose and give reasons for any divergence to this standard. Where the company has
more than one class of shares, describe the voting rights attached to each class of shares.
The Corporations Common Shares carry one vote for one share. Holders of common and Class A Preferred shares of stock of the Company are entitled to vote on all
matters to be voted upon by the stockholders. Stockholders entitled to vote are also entitled to cumulative voting in the election of directors. Section 24 of the
Corporation Code provides, in part, that: .in stock corporations, every stockholder entitled to vote shall have the right to vote in person or by proxy the number of
shares of stock standing, at the time fixed in the by-laws, in his own name on the stock books of the corporation, or where the by-laws are silent, at the time of the
election; and said stockholder may vote such number of shares for as many persons as there are directors to be elected, or he may cumulate said shares and give
one candidate as many votes as the number of directors to be elected multiplied by the number of his shares shall equal, or he may distribute them on the same
principle among as many candidates as he shall see fit.
(h) Proxy Voting Policies

State the policies followed by the company regarding proxy voting in the Annual/Special Stockholders Meeting.
Companys Policies
120
The following are the requirements for the execution and acceptance of proxies:
Execution and
acceptance of
proxies
a.
The proxy form must be completed, signed and dated by the stockholder or his duly authorized representative, and received at the
principal office and mailing address of the Company on or before the scheduled meeting where such proxy will be utilized.
b.
If the shares of stock are owned by two or more joint owners, the proxy form must be signed by all of the joint owners.
c.
If the shares of stock are owned in an "and/or" capacity, the proxy form must be signed by either one of the owners.
d.
If the shares of stock are owned by a corporation, association, partnership or unincorporated entity, the proxy form must be
accompanied by a certification, signed by a duly authorized officer, partner or representative of such corporation, association,
partnership or unincorporated entity, to the effect that the person signing the proxy form has been authorized by the governing body
or has the power pursuant to the By-Laws, constitutive documents or duly approved policies of such corporation, association,
partnership or unincorporated entity, for such purpose.
e.
A proxy form given by a broker or dealer in respect of shares of stock carried by such broker or dealer for the account of a customer
must be supported by a sworn certification that the same is given with the express prior authorization of such customer.
f.
Notary
Submission of
Proxy
If any customer of a broker or dealer who is the beneficial owner of shares of stock executes a sub-proxy, the broker or dealer shall
certify that the signature on the sub-proxy is the true and genuine signature of its customer.
For the convenience of every shareholder and to facilitate the use of proxy voting, NO NOTARIZATION of the pertinent document is
required for the validity of Proxy Appointment.
The Corporation follows the SRC Rule 20 (11)(b) Proxy
Where the corporation receives more than one (1) proxy from the same stockholder and they are all undated, the postmark dates shall be
considered. If the proxies are mailed on the same date, the one bearing the latest time of day of postmark is counted. If the proxies are not
mailed, then the time of their actual presentation is considered. That which is presented last will be recognized.
Several Proxies
Where a proxy is given to two (2) or more persons in the alternative in one instrument, the proxy designated as an alternate can only act
as proxy in the event of non-attendance of the other designated person.
Where the same stockholder gives two (2) or more proxies, the latest one given is to be deemed to revoke all former proxies.
If the stockholder intends to designate several proxies, the number of shares of stock to be represented by each proxy shall be specifically
indicated in the proxy form. If some of the proxy forms do not indicate the number of shares, the total shareholdings of the stockholder
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shall be tallied and the balance thereof, if any, shall be allotted to the holder of the proxy form without the number of shares. If all are in
blank, the stocks shall be distributed equally among the proxies. The number of persons to be designated as proxies may be limited by the
By-laws.
The following are the requirements for the validity of a proxy:
Validity of Proxy
Proxies
executed
abroad
Invalidated
Proxy
Validation of
Proxy
Violation of
Proxy
a.
b.
If the shares of stock are owned by two or more joint owners, the proxy form must be signed by all of the joint owners.
c.
If the shares of stock are owned in an "and/or" capacity, the proxy form must be signed by either one of the owners.
d.
If the shares of stock are owned by a corporation, association, partnership or unincorporated entity, the proxy form must be
accompanied by a certification, signed by a duly authorized officer, partner or representative of such corporation, association,
partnership or unincorporated entity, to the effect that the person signing the proxy form has been authorized by the governing body
or has the power pursuant to the By-Laws, constitutive documents or duly approved policies of such corporation, association,
partnership or unincorporated entity, for such purpose.
e.
A proxy form given by a broker or dealer in respect of shares of stock carried by such broker or dealer for the account of a customer
must be supported by a sworn certification that the same is given with the express prior authorization of such customer.
f.
If any customer of a broker or dealer who is the beneficial owner of shares of stock executes a sub-proxy, the broker or dealer shall
certify that the signature on the sub-proxy is the true and genuine signature of its customer.
Proxies executed abroad shall be duly authenticated by the Philippines Embassy or Consular Office.
Proxies invalidated by the Special Committee of Inspectors shall not be included for quorum and voting purposes.
The Board shall schedule the validation of proxies. The scheduled is indicated in the Notice of Meeting and Information Statement.
If the instruction of the stockholder as to manner is not followed, then the proxy vote shall not be honored.
122
(i) Sending of Notices

State the companys policies and procedure on the sending of notices of Annual/Special Stockholders Meeting.
Policies
Procedure
The Companys By-Laws states that Notices for regular or special meetings of
stockholders may be sent by the Secretary by personal delivery or by mail at
least fifteen (15) days prior to the date of the meeting to each stockholder of
record at his last known post office address or by publication in newspaper of
general circulation.
Notices of AGM are sent through courier service, disclosed to SEC and PSE,
published in newspaper of general circulation, and posted on the Company
website.
(j) Definitive Information Statements and Management Report

Number of Stockholders entitled to receive Definitive Information
Statements and Management Report and Other Materials
Date of Actual Distribution of Definitive Information Statement and
Management Report and Other Materials held by market participants/certain
beneficial owners
Date of Actual Distribution of Definitive Information Statement and
Management Report and Other Materials held by stockholders
State whether CD format or hard copies were distributed
If yes, indicate whether requesting stockholders were provided hard copies
For the 2014 AGM, there were 1,354 Stockholders entitled to receive DIS and
other materials. For the 2015 AGM, the number of Stockholders shall be
determined based on the latest Stock Transfer Service, Inc. (STSI) report on
the number of Stockholders of the Company.
For the 2014 AGM, DIS were distributed on May 5, 2014, 26 days before the
actual AGM.
For the 2014 AGM, DIS were distributed on May 5, 2014, 26 days before the
actual AGM.
For the 2014 AGM, Hard copies of the Definitive Information Statements and
Management Report and Other Materials were distributed to the
Stockholders.
For the 2014 AGM, Hard Copies of the Definitive Information Statements and
Management Report and Other Materials were distributed to the
Stockholders.
(k) Does the Notice of Annual/Special Stockholders Meeting include the following:
Each resolution to be taken up deals with only one item.
Profiles of directors (at least age, qualification, date of first appointment, experience, and directorships in other listed
companies) nominated for election/re-election.
The auditors to be appointed or re-appointed.
An explanation of the dividend policy, if any dividend is to be declared.
The amount payable for final dividends.
Yes
Yes
Yes
Yes
Yes
123
Documents required for proxy vote.
Yes
Should any of the foregoing information be not disclosed, please indicate the reason thereto.
none
2.
Treatment of Minority Stockholders
(a) State the companys policies with respect to the treatment of minority stockholders.
Policies
Implementation
The Corporations Revised Manual of Corporate Governance Article 6 - Stockholders Rights and Protection of Minority Stockholders Interests states the
following with respect to the treatment of minority stockholders:
A) The Board shall respect the rights of the stockholders as provided for in the Corporation Code, namely:
(i) Right to vote on all matters that requires their consent or approval;
(ii) Pre-emptive right to all stock issuances of the corporation;
(iii) Right to inspect corporate books and records;
(iv) Right to information;
(v) Right to dividends; and
(vi) Appraisai right.
B) The Board should be transparent and fair in the conduct of the annual and special stockholders meetings of the corporation. The stockholders should be
encouraged to personally attend such meetings. If they cannot attend, they should be apprised ahead of time of their right to appoint a proxy. Subject to the
requirements of the bylaws, the exercise of that right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the
stockholders favor.
It is the duty of the Board to promote the rights of the stockholders, remove impediments to the exercise of those rights and provide an adequate avenue for
them to seek timely redress for breach of their rights.
The Board should take the appropriate steps to remove excessive or unnecessary costs and other administrative impediments to the stockholders meaningful
participation in meetings, whether in person or by proxy. Accurate and timely information should be made available to the stockholders to enable them to
make a sound judgment on all matters brought to their attention for consideration or approval.
Although all stockholders should be treated equally or without discrimination, the Board should give minority stockholders the right to propose the holding of
meetings and the items for discussion in the agenda that relate directly to the business of the corporation.
124
(b) Do minority stockholders have a right to nominate candidates for board of directors?
Yes, the minority stockholders have a right to nominate candidates for board of directors, as specifically stated in the Companys Revised Manual of Corporate Governance.
K. INVESTORS RELATIONS PROGRAM
1.
Discuss the companys external and internal communications policies and how frequently they are reviewed. Disclose who reviews and approves major company
announcements. Identify the committee with this responsibility, if it has been assigned to a committee.
The Corporations Public Relations (PR) and Corporate Communications office is tasked in crafting, disseminating and managing the information, both internal and external,
about the Corporation, its directors, officers, and employees. The said office handles media events and releases for various stakeholders which include the shareholders,
various government regulatory agencies and the general public. The Corporation uses different channels of external communication such as press releases, newspaper prints,
TV, radio and electronic media (such as the internet and social media sites) and the Corporations website. Information is released using these media as events occur.
The Corporation provides internal communication and messaging using the corporate email services. The directors, officers and employees are made aware of updates and
notices sent by PR and Corporate Communications, the Human Resources and other involved offices.
The Head of Public Relations and Corporate Communications Office, reviews and approves the release of the aforementioned information. In the execution of such function,
she coordinates with concerned groups including the Board, the Chairman, the President and CEO and other Key Officers to get approval for the disclosure of the information
relevant to their offices or functions.
The Investor Relations Office, on the other hand, prepares the materials for the analysts and investors briefing. This is done in coordination with the Chief Finance Officer
and the Corporations Finance Office.
As a listed Corporation, MPIC is expected to report to the SEC and PSE any material event or pertinent information relating to the company or its subsidiaries. For official
disclosures and releases, the Corporation has designated corporate information officers these being the head of Public Relations and Corporate Communications Office,
head of Legal and the Legal Counsel. The said officers are the only authorized disclosure officers of MPIC to the PSE/SEC.
2.
Describe the companys investor relations program including its communications strategy to promote effective communication with its stockholders, other stakeholders
and the public in general. Disclose the contact details (e.g. telephone, fax and email) of the officer responsible for investor relations.
Details
(1) Objectives
(2) Principles
To provide clear, relevant, accurate and timely information about the Corporation, its strategies, and business drivers to current and potential
investors, equity analysts, shareholders and the general public.
Excellence to ensure that the information is relevant and communicated in a professional, clear and orderly manner
Integrity to ensure that the acts of the company with regard to investor relations are performed within the rules and regulations of its
governing bodies (Corporation, SEC, PSE, Philippine government); and that the information communicated is accurate, relevant and timely.
125
(3) Modes of
Communications
(4) Investors
Relations Officer
3.
Quarterly Results Briefing (Investors/Analysts and Media)

Annual Stockholders Meeting
Investor Relations Meetings
Regular Company Disclosures
Conferences and road shows
Responses to calls and emails
Corporate website Announcements and Postings
Corporations Investor Relations Team:
Mr. Jose Ma. K. Lim, President and Chief Executive Officer
Mr. David J. Nicol, Chief Finance Officer
Mr. Albert W. F. Pulido, Vice President and Investor Relations Head
Contact Details:
a.
Email : investorrelations@mpic.com.ph
b.
Tel No.: (632) 888-0888
c.
Fax: (632) 888-0813
What are the companys rules and procedures governing the acquisition of corporate control in the capital markets, and extraordinary transactions such as mergers, and
sales of substantial portions of corporate assets?
The Corporation receives various investment and acquisition proposals through different forms and medium. These proposals are elevated to the Board who may direct the
proper officers to conduct the necessary evaluation. The evaluation results are presented to the Board for approval. Should the viability of such acquisition require further
evaluation and analysis, the Board normally creates a committee to review the transaction. All the processes are done in accordance with the Corporation Code and the
Securities and Regulations Code.
4.
Name of the independent party the board of directors of the company appointed to evaluate the fairness of the transaction price.
Independent directors who are present at both at the Audit and Risk Management Committee and the Board provide the oversight as to the fairness of the transaction
pricing.
126
L.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Discuss any initiative undertaken or proposed to be undertaken by the company.
CSR activities are implemented through Metro Pacific Investments Foundation, Inc., MPIC's CSR arm.
Initiative
Empowering People Through

Manpower For Infrastructure
Cooperative
Beneficiary
In February 2012, MPIC launched the ManPower for Infrastructure Cooperative Development (MPIC) project -- a sustainable
Livelihood and Enterprise Development program for 25 urban poor households of Ana Maria Heights, Barangay Calamansian,
Caloocan City. In cooperation with the Philippine Business for Social Progress of which MPIC is a member company, the
community-based cooperative project embarks on raising the quality of labor skills of its members for possible employment
within MPICs business portfolio.
As part of the cooperative governance and pre-membership education seminars, the group familiarized themselves with their
organizational structure and roles of each officer and formed committees to oversee education, election, ethics, membership,
and mediation and policy formulation.
The cooperative, composed of members of the Ana Maria Heights HOA, aims to provide services in the areas of carpentry,
masonry, plumbing, welding and electrical installations and infrastructure painting via construction contracts or sub-contracts
thru referred or endorsed affiliates and subsidiaries of the Metro Pacific Investments Corporation (MPIC). The engagement with
PBSP ended in 2014 and MPIC continues to monitor the progress of the group so as to extend assistance when needed.
The Shore It Up! campaign is an effort towards sustainable development, preservation and conservation of our marine
resources. As a yearly program of the Foundation, it also aims to help reduce destructive floods caused by environmental
neglect by both businesses and communities.
Environmental Awareness Through

Shore It Up
Shore It Up which adopts the relevant slogan: Rescue, Restore, Revive continued to undertake a coastal/underwater cleanup and environmental protection campaign after its successful start in 2009. On its 6th year, the environmental awareness
program of the MVP group spearheaded by the Metro Pacific Foundation known as Shore it Up (SIU), recently concluded a
livelihood program in the coastal community of Pamilacan, Bohol, thereby realizing the nationwide goal of the multi-awarded
program.
Other activities such as mangrove planting and coastal cleaning were simultaneously implemented in Pangasinan, Luzon, and
Siargao in Mindanao on the same weekend last June of this year. As part of SIUs sustainable environmental contribution to
these areas, the Mangrove Propagation and Information Center, launched 2014 in Siargao, will serve as a structure to increase
the regions knowledge and appreciation of the benefits of mangroves.
127
Excellent Education: The MPIF

Annual Excellence Fund for Mano
Amiga
Tulong Kapatid: Aligning

Programs And Working Together To
Improve Lives And Benefit
Communities
Recognized for its sincere commitment to engage various communities in environmental awareness, Shore it Up received
awards from Corporate Governance Asia, Finance Asia and the Public Relations Society of the Philippines.
The MPIF Annual Excellence Fund is MPIFs education program whose beneficiary is Mano Amiga Academy, a private school in
Taguig City that provides international school-quality education to children from underprivileged families. In 2011, the
Foundation sought to make a more significant impact on the children of Mano Amiga and manifested a deeper commitment to
them by expanding the Foundations pool of scholars through an endowment fund that would ensure 30 students getting the
full benefit of education. The 30 students receive excellent primary and secondary education through a scholarship that covers
per-pupil operational expenses of the School, as well as miscellaneous fees and expenses on student enrichment activities. In
addition, the grant from MPIF also supports the teachers benefits and training opportunities. MPIF provided a significant
donation that enabled Mano Amiga Academy to acquire a property in Paranaque for the Schools eventual relocation.
The CSR Council composed of foundations and CSR departments in the MVP Group of companies formed Tulong Kapatid
(Brotherly Help) to collaborate in common activities relating to environmental programs, tree planting, coastal clean-ups, blood
banks, medical missions and disaster preparedness and responsiveness. Recent efforts of Tulong Kapatid provided coordination
for medical assistance and service restoration in telecommunications, electricity and water, soup kitchen drives and assistance
in home and infrastructure rehabilitation.
M. BOARD, DIRECTOR, COMMITTEE AND CEO APPRAISAL

Disclose the process followed and criteria used in assessing the annual performance of the board and its committees, individual director, and the CEO/President.
Process
Board of Directors
Board Committees
Individual Directors
CEO/President
Annually, the Board conducts a Performance-Self Assessment* in order to

measure the performance of the Board.
The Board conducts a Board Committee Performance Assessment in order to
measure the performance of each Board Committee against their functions.
The Board conducts a Performance-Self Assessment in order to measure their
performance as Individual members of the Board.
The Board conducts a CEO/President Performance Assessment in order to
measure the performance of the CEO/President as against his expected
deliverables for the year.
Criteria
Board Responsibilities
Board Processes
Board Responsibilities
Board Processes
Individual Board Member Expectations
Management Relationship
* The questionnaire for the Board/ Directors/President/CEO Assessment is available at the Corporations Website.
128
N. INTERNAL BREACHES AND SANCTIONS

Discuss the internal policies on sanctions imposed for any violation or breach of the corporate governance manual involving directors, officers, management and employees
Violations
Sanctions
The following are the stated sanctions in the Companys Revised Manual of Corporate Governance, Article 11 Administrative Sanctions:
Violation to the
Companys Revised
Manual of Corporate
Governance
To avoid non-compliance and to strictly observe the provisions of this Manual, the Board of Directors may impose appropriate sanctions, penalty
or corrective measures, after due notice and hearing, on the erring directors, officers and employees.
Sanction or penalty may include censure, suspension and removal from office depending on the gravity of the offense, the resulting damage, as
well as the frequency of the violation.
The commission of a grave violation of this Manual by any member of the Board of the Corporation shall be sufficient cause for removal from
directorship.
Described below are the types of disciplinary action stated in the Companys Employee Handbook:
1.
Violation to the
Companys Employee
Handbook
2.
3.
4.
Oral Reprimand an oral admonition or counsel given to erring employee for an infraction of a rule, and warning him that a repetition of
the offense shall be dealt with more severely.
Written Reprimand a written admonition issued to an employee upon repetition of an offense in which an oral reprimand was previously
given; or commission of a more serious offense which requires a stronger disciplinary measure so that the repetition of the same offense
subjects the employee to a suspension penalty.
Suspension Cessation of reporting for work by the employee without pay. Such advice shall be made in writing with a warning to the
employee that a repetition of the same offense means dismissal from the Company. Suspension shall range from a minimum of 1 to 90
days.
Dismissal Termination of the employee for cause after due process.
Note:
All the above answers are based on available Corporation records as of December 31, 2014 and reports of Corporation executives and personnel, not necessarily on the
personal knowledge of the affiants.
129

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COVER SHEET

Principal Office (No./Street/Barangay/City/Town/Province)

Department requiring the report

Secondary License Type, If Applicable

Companys Telephone Number/s

Last Friday of May

CONTACT PERSON INFORMATION

Mr. David J. Nicol

Contact Persons Address

10/F MGO Building, Legaspi corner Dela Rosa Streets

12. Check whether the registrant:

SEC FORM 17-A

December 31, 2014

PART I BUSINESS AND GENERAL INFORMATION

Non-recurring income (charges)

Segment Income (Loss)

(B.1) Water Utilities

MWHCI. MCNK is 90.0% owned by Marubeni Corporation, a company incorporated in Japan

Costs and effects of compliance with environmental laws

(B.2) Toll Operations

Dependence on Licenses and Government Approval

Subic-Clark-Tarlac Expressway (SCTEX) Concession Agreement. On February 9, 2015,

Effect of Existing or Probable Governmental Regulations on the Business

(B.3) Power Distribution

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

(D) Registrants Major risks

Item 2. Description of Properties

Item 3. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security Holders

PART II OPERATIONAL AND FINANCIAL INFORMATION

PCD Nominee Corporation (Non-Filipino)

PCD Nominee Corporation (Filipino)

Albert F. Del Rosario and/or Margaret

Albert F. Del Rosario

Victorico Paredes Vargas

Lucio W. Yan and/or Clara Y. Yan

Amado R. Santiago III

Baby Lea M. Wong

First Life Financial Co., Inc.

Marjorie Ann Lim Lee

Metro Pacific Holdings, Inc.

(4) Recent Sales of Unregistered or exempt Securities

Adoption of New Standards and Interpretations

2014 versus 2013

method investees at an aggregate of P

15% increase in contribution from Maynilad from P

19% increase in contribution from Toll Roads segment from P

30% increase in contribution from Beacon Electric/Meralco from P

A 20% decrease in contribution from Healthcare group from P

II - Operating Segments of the Group

Maynilad Water Services, Inc.

Non-domestic (commercial and industrial)

Key Performance Indicators

Total revenues for the year rose 9% to P

Metro Pacific Tollways Corporation

Key Performance Indicators

Net Toll Revenues

Key Performance Indicators

Key Performance Indicators

MPIC Consolidated Statement of Financial Position

Investments and advances (Increase) Increase substantially relates to the acquisition of

Liabilities and Equity

(in Php millions)